Visakhapatnam Urban Development Authority Vs. Patnana Seetharamanjaneyulu and anr. - Court Judgment

K.C. Bhanu, J.

1. These appeals are directed against a common order dated 31.7.2002 made by a learned Single Judge of this Court in W.P. 14619 of 2000 and batch affirming the award dated 4.12.1998 made by the Industrial Tribunal-cum-Labour Court, Visakhapatnam in I.D.No. 357 of 1995 and Batch filed under Section 2A(2) of the Industrial Disputes Act (hereinafter referred to as 'the Act'). For better appreciation of the facts, the parties are referred to as arrayed before the Industrial Tribunal.

2. The brief facts that are necessary for the disposal of the present appeals may be delineated as follows:

3. The workmen claimed to have joined the services of the Management as NMRs in the Engineering Department of Visakhapatnam Urban Development Authority (for short, 'VUDA'). The Management retrenched their services by orally refusing to allow them to work. The Management terminated the services of the workmen without complying with the provisions of Section 25F of the Act. Therefore, the petitioners claimed reinstatement with fall backwages and continuity of service. The case of the Management is that the workmen never worked in the establishment of the Management, that even the works of, the Engineering Section were seasonal in nature, that those works were meant to be entrusted to the contractors and the contractors in turn engaged the workmen and executed the works and, therefore, the Management did not directly engage any labour in connection with the works in the Engineering Section of VUDA. It is also the contention of the Management that its activities do not come within the meaning of 'Industry' and, therefore, the Industrial Disputes filed by the workmen were not maintainable.

4. To substantiate the case of the workmen, one witness was examined in each case and four documents were marked. On behalf of the Management, one witness was examined and one document was marked in each case. The Industrial Tribunal-cum-Labour Court, after appreciation of the evidence on record, came to the conclusion that the workmen had worked for more than 240 days preceding the date of retrenchment and therefore the retrenchment was invalid in law and the Engineering Department of VUDA is an Industry-within the meaning of Section 2(j) of the Act. Aggrieved by the same, the Management preferred a batch of writ petitions before this Court. A learned Single Judge of this Court, after an elaborate consideration, by a common order dated 31.7.2002 affirmed the order of the Industrial Tribunal. Aggrieved by the same, the unsuccessful Management preferred these appeals before this Court.

5. We have heard the learned Counsel appearing on behalf of the parties at length.

6. The learned Counsel appearing for the appellants Smt. Sumalini Reddy contended that the activity which is sovereign in nature cannot be delegated by the Government to a private person or Enterprise and the essential functions are primary and inalienable, which only the State or its instrumentality can exercise; that the main functions of VUDA are to carryout the civic survey and to prepare a Master Plan for the Development Areas and Zonal Development Plan for each zone and, therefore, VUDA is not an 'Industry' within the meaning of Section 2(j) of the Act and as such the insistence to follow the procedure under Section 25F of the Act was without any basis. Therefore, she prays to allow the appeals.

7. On the other hand, the learned Counsel appearing for the workmen Mr. M. Pratap Reddy contended that once it was found that the VUDA was not discharging the sovereign functions, it was under obligation to follow the procedure prescribed under the Act, more particularly Section 25F of the ID Act; that the workmen did work under the Management as NMR employees and, therefore, except by following the procedure under Section 25F of the Act the workmen cannot be retrenched and the nature of work entrusted to the workmen squarely falls within the meaning of Section 2J of the Act. Thus contending, he prays to dismiss the appeals.

8. The main objection of the Management is that adjudication of the dispute under Section 2A(2) of the Act is beyond the jurisdiction of the Industrial Tribunal-cum-Labour Court inasmuch as the appellant-VUDA is not an Industry within the meaning of Section 2(J) of the Act and consequently the workmen are not workmen under the Industrial Disputes Act.

9. To resolve the controversy in dispute, it is necessary to refer to the definition of 'Industry' occurring in Section 2(J) of the Act, which is as follows:

'any business, trade undertaking, manufacturer or calling of employers and includes any calling service, employment, handicraft, or industrial occupation or avocation of workmen.'

10. The above definition is in two parts. The first part says that it means any business, trade undertaking, manufacturer or calling of employers and then goes to say that it includes any calling service, employment, handicraft or industrial occupation or avocation of workmen, therefore, Industry is to be found when the employers are carrying on any business, trade undertaking, manufacture or calling of employers; if they are not, there is no Industry as such.

11. It is possible to exclude some activities from Section 2(J) of the Act without any difficulty. The activities of the Government which can be properly described as regal or sovereign activities are outside the scope of Section 2(J) of the Act. These are the functions which a constitutional Government can and must undertake and the governance of which no private citizen can undertake. This position is not in dispute.

12. To resolve the dispute in controversy, it is pertinent to refer to a decision of a Larger Bench of this Court reported in National Remote Sensing Agency, Balanagar, Hyderabad v. Additional Industrial Tribunal-cum-Additional Labour Court, Hyderabad and Ors., : (2002)IIILLJ741AP (LB), for which one of us (B. Sudershan Reddy, J) was a member. Speaking for the Larger Bench after an elaborate consideration of the case law, the learned Judge observed as follows:

'It is thus clear that even the research institutes although run without profit motive are the industries, (i) Professions, (ii) Clubs, (iii) Educational Institutions, Co-operatives, (iv) research institutes, (v) charitable projects and (vi) other kindred adventures cannot be exempted from the scope of Section 2(J) of the Act, provided they fulfil the triple test, viz., (i) systematic activity, (ii) organized by co-operation between employer and employee (the direct and substantial element is chimerical) and (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 Prasad or food)'.

13. With regard to the crucial test as to the nature of activity, it is observed:

'Thus the crucial test is the nature of the activity and that activity is determining factor and that does not change according to who undertakes it. The fact that some kinds of activities are, or can only be, undertaken by the State does not furnish any answer to the question as to whether those activities carried on by the State or its establishment is an industrial activity. Every activity carried on by the State or its instrumentalities in defence related matters cannot be equated to that of discharge of sovereign function. Even a Government company manufacturing arms and ammunition exclusively for the purposes of defence may amount to an industrial activity, even though these activities are, ought to be and can only be undertaken by the State in the discharge of its constitutional obligations or functions. The crucial test is the nature of the activity'.

14. In a decision reported in City of Nagpur Corporation v. N.H. Majumdar, AIR 1960 SC 671, it was held:

'The result of the discussion may be summarized that: (1) The definition of 'industry' in the Act is very comprehensive. It is in two parts: one part defines it from the standpoint of the employer and the other from the standpoint of the employee. If an activity falls under either part of the definition, it will be an industry within the meaning of the Act. (2) The history of industrial disputes and the legislation recognizes the basic concept that the activity shall be an organized one and not that, which pertains to private or personal employment. (3) The regal functions described as primary and inalienable functions of State through statutorily delegated to a corporation are necessarily excluded from the purview of the definition. Such regal functions shall be confined to legislative power, administration of law and judicial power. (4) If a service rendered by an individual or a private person would be an industry, it would equally be an industry in the hands of a corporation. (5) If a service rendered by a corporation is an industry, the employees in the departments connected with that service, whether financial, administrative or executive, would be entitled to the benefits of the Act. (6) If a department of a municipality discharges many functions, some pertaining to industry as defined in the Act and other non-industrial activities, the predominant functions of the department shall be the criterion for the purposes of the Act'.

15. In Nagpur Corporation (supra) itself the Apex Court observed, 'the regal functions shall be confined to legislative power, administration of law and judicial power'.

16. In N. Nagendra Rao and Co. v. State of A.P., AIR 1999 SC 2663, the Supreme Court observed 'barring functions such as administration of justice, maintenance of law and order and repression of crime etc., which are among the primary and inalienable functions of a constitutional Government alone could be characterized as sovereign functions'.

17. Therefore, in view of the above decisions of the Larger Bench of this Court and the Supreme Court, it has to be seen whether VUDA is exercising any regal functions and whether the activity of the Engineering Department of VUDA falls within the meaning of Section 2(J) of the Act.

18. The Andhra Pradesh Urban Areas (Development) Act, 1975 was enacted for the development of urban areas in the State of Andhra Pradesh according to plan and for matters ancillary thereto. The Government of A.P., have constituted the Urban Development Authorities for major towns and cities of the State. In Pradesh Urban Areas (Development) Act, 1957, namely, the requirement of preparing master plan, enforcing zonal regulation and integrated planning and control encompassing conservation of nature, natural resources and man made heritage must be extended to many other areas of the State even though all such areas may not have a large urban population or may not be in the vicinity of large cities. The Visakhapatnam Urban Development Authority is one such authority constituted in the year 1978. It, as a body to regulate and enforce the orderly growth of Visakhapatnam and its surrounding Municipal towns, namely, Anakapalli, Gajuwaka, Bheemili and Vizianagaram including 287 Rural settlements, was constituted in the year 1978 with an area of 1721 Kilometers and, as a part of the specified objectives, prepared a master plan for the entire Visakhapatnam Metropolitan region and got it approved by the Government of A.P. The Zonal Development Plans of Visakhapatnam City, Gajuwaka, Anakapalli, Vizianagaram and Bheemili have been prepared out of which plans for Anakapalli, Vizianagaram and Bheemili have been sanctioned. In the peripheral area, Zonal Development Plans of Madhurawada and Rushikonda have been sanctioned.

19. The basic objectives of VUDA are to prepare Master Plan, Zonal Development Plans for orderly growth of the city and to regulate and enforce the development. Some of the projects inter alia undertaken by VUDA are urban infrastructure development, tourism development, transportation scheme, housing projects, sites and services programmes, parks and recreational, sports, cultural and community development projects, avenue plantation, greenbelt development, afforestation of hills.

20. Section 5 of the A.P. Urban Areas (Development) Act, 1975 provides objects and powers of the Urban Development Authorities constituted under sub-sections of Section 13 of the Act. It reads as follows:

'Section 5. Object and powers of the Authority:- The object of the Authority shall be to promote and secure the development of all or any of the areas comprised in the development area concerned according to plan and for that purpose, the Authority shall have the power to acquire, by way of purchase or otherwise, hold, manage plan, develop and mortgage or otherwise dispose of land and other property, to carry out by or on its behalf building, engineering, mining and other operations, to execute works in connection with supply of water and electricity, disposal of sewerage and control of pollution, other services and amenities and generally to do anything necessary or expedient for purposes incidental thereof.

(2) The Authority may, for the purpose of efficient performance of its functions, constitute as many committees as it thinks fit, in such manner as may be prescribed, and provide by regulations made in this behalf for rules of procedure at the meeting of the Committees and allowances to members thereto'.

21. In achieving its objects, certain specified posts are to be sanctioned by the Government and appointments to such posts shall be made by the Government and at the same time the authority has got power in relation to creation of posts, appointment of officers and other employees.

22. For the aforesaid reasons, without any qualm we hold that none of the activities of VUDA could be construed to be sovereign in nature and that it falls within the ambit of 'Industry'.

23. From the nature of objects, powers and functions of VUDA, we have no hesitation in holding that VUDA carries on a systematic activity with co-operation between itself and its employees to promote and secure the development of Visakhapatnam and its surrounding Municipal towns.

24. It was pleaded in the writ petitions that certain works relating to Engineering Section of workmen are merely seasonal and those works are carried out by entrusting to contractors and therefore there is no contract of employer and employee between the appellants and the respondents and that the respondents are employed from day to day on daily wages.

25. This Court in exercise of its certiorari jurisdiction will not convert itself into a Court of appeal and indulge in re-appreciation or evaluation of evidence unless error of law or fact is manifest and apparent on the face of the proceedings and grave injustice or gross failure of justice has occasioned thereby. No such aspects are brought to our notice by the learned Counsel for the appellants. However, brief facts required to be mentioned to know whether the Tribunal committed any manifest error apparent on the face of the proceedings, are as follows:

26. The Tribunal observed that MW-1 did not give any details of works carried on by VUDA or answer the description of Industry with regard to employment of workmen. The Tribunal found that Ex. Ml clearly indicated that the workmen did work under the Management as NMR employees. The Management did not produce any evidence to show that they were paying certain amounts for execution of works directly to the contractor engaged but not to the workmen directly. It is not in dispute that the Industrial Tribunal cannot dispose of any lis between the workmen and the Management solely basing on the pleadings. Lis has to be adjudicated with reference to the evidence adduced by the parties. It is a roundabout way of saying that no one shall be entitled to give evidence of any fact without first showing that he is legally entitled to do so. When in order to render some evidence admissible it is necessary to prove some fact, the burden of proving that fact is on the person who wants to give that evidence. As the VUDA wishes the Court to believe that the respondents are not its employees, the onus of proving that fact is on VUDA. Therefore, it is for the Management to adduce satisfactory evidence in respect of certain pleas taken by it. But, the Management failed to adduce any evidence on the mooted questions.

27. From the material available on record, we do not think that these facts found can take out the VUDA outside the purview of the definition of 'Industry' within the meaning of Section 2(J) of the Act.

28. For the aforesaid reasons, we do not find any merit in these appeals. Accordingly all the appeals shall stand dismissed, but under the circumstances, without costs.