What Is The Doctrine Of Clog On Redemption?

When a mortgage takes place, the mortgagor has the right to get back his property when he pays back the mortgage amount. This is
known as the right of redemption and arises out of equity. Anything which obstructs the right of the mortgagor to redeem his property is
void, and such obstruction constitutes a clog on the right to redemption. This is also known as the doctrine of a clog on redemption.

In the case of a mortgage, two categories of interest are generated. The first interest which is created is the interest of the creditor on
the property. This interest is limited and temporary. The second category is the residuary interest which can be determined by deducting
the interest of the creditor or the mortgagee, and this interest stays with the mortgagor. This division of the interest gives the right of
redemption to the mortgagor when the loan is repaid. This right of the mortgagor is known as the equitable right to redeem. The right of
redemption to the mortgagor is provided under Section 60[1] of the Transfer of Property Act, 1882. The contract of mortgage comes to
an end when the mortgagor repays the amount of the loan and exercises his right to redeem the property. The right provided under the
Act is a statutory right and to enforce it statutory provisions has to be followed.

In the judicial pronouncement of Stanley v Wilde[2] (an English case), it was held by the Court that a mortgage means transferring the
interest in an immovable property to a third party as security for the loan that the party has advanced. The security is redeemable by
the transferor when he pays back the loan or discharges his obligation. If any act is done, or any provision is there which obstructs the
right of redemption on payment of the debt or performance of the obligation, then it acts as a fetter or clog on the equity of redemption
and will be held as void. This doctrine also follows the principle of “once a mortgage, always a mortgage.” This means that there cannot
be any covenant that modifies the character of the mortgage and would bar the mortgagor to redeem his property on payment of the
loan. The doctrine of a clog on redemption is based on the principle of justice, equity, and good conscience. The Court recognizes the
fact that the party who forwards the loan is in a dominant position than the person who takes the loan. The law also recognizes the fact
that the dominant party may insert a clause in the agreement which can act as a barrier to the right of redemption. Such barrier in
exercising the right is struck down by the Courts as invalid so that the mortgagor can exercise his right of redemption. In the case of  U.
Nilan v. Kannayyan through Lrs,[3] The Court held that hardship of one person should not act as an opportunity for some other person.
If a person is taking a loan by giving his property as security, the opposite party cannot exploit him, and the Court seeks to protect the
victim.

There are a few situations where it was held by the Court that the condition or covenant acts as a clog on redemption.

Long Term Mortgages

Every long term mortgage agreement cannot be said to be a clog on the right of redemption of the mortgagor. But if a mortgage is for
say 100 years, it’ll go beyond the life of the mortgagor and seem like a clog on the right to redemption, at least superficially. The Court
also of the same opinion, but has made the stand clear by saying that only by the virtue of a long mortgage period, the mortgage
wouldn’t be considered as a clog. There should be a condition which gives an undue advantage to the opposite party for the mortgage to
be considered as a clog.[4]

In the judicial pronounce of Vadilal Chhaganlal v. Gokaldas Mansukh,[5] there was a condition in the mortgage deed that the period for
the mortgage will be for 99 years, and also the mortgagee will have the authority to construct any structure on the property. A
subsequent condition that there would be no limitation on the cost of the construction was imposed. The Court was of the opinion that it
would be impossible for the mortgagor to repay the loan amount along with the expenses of the construction, and such a condition
amounted to a clog. In the case of RamkhilawanAshwasi v Mullo,[6] There was a condition that the mortgage money will be paid after 80
years and only of Baisakh. The Court opined that such a condition was a clog.

Condition of sale of property

If a condition is stated in the agreement of mortgage that, if the property is not redeemed within a fixed period, it’ll be considered as a
sale is a clog. This was held by the Court in the cases of Rocky Flora v. Parvarthy Ammal[7] and Hajee Fatma Bee v. Prohlad Singh.
[8] But in the case where there is a separate agreement between the mortgagor and the mortgagee and a sale deed is executed in the
favor of the mortgagee independently, then such sale would be valid. In the judicial pronouncement of Meherban Khan v. Mekhna,
[9] Property was mortgaged. The conditions of the mortgage were that even on payment of the debt, the mortgagor would be able to
redeem the property only till a limited interest. It was further stipulated that in case the mortgagor is unable to pay back the loan, the
property will be considered sold to the mortgagee permanently. The Court reached the decision that these conditions acted as a clog.
Also, when the amount of the loan has been repaid in full, the mortgagor has the right to get back his property without any impediment.
In the judicial pronouncement of Kuddi Lal v. Aisha Begam, the Court allowed the mortgagor to redeem the property by paying through
her pocket and not by transferring the property. The Court said that such alienation of the property would act as a clog.

Penalty in case of default

In case the mortgagor has defaulted on any grounds, then the mortgagee can impose a penalty on the mortgagor. But the penalty
should be fair and reasonable. In some situations, penalty imposed by the mortgagee can be unreasonable.

1. In the case of default, the mortgagee charges compound interest, instead of charging simple interest even when the original
interest rate is extremely high.[10]
2. In case there is any default on the part of the mortgagor, the mortgagee charges the interest by taking in consideration the
date when the mortgage agreement was made and not from the date of default. For instance, the mortgage agreement
was made on 1st of the month. The mortgagor defaults of 10 th of the month. The mortgagee, instead of charging interest
from the 10th, charges the interest from the 1 st of the month itself.[11]
Having only a high rate of interest does not mean that the condition will act as a clog. There should be some undue influence of the
dominant party over the weaker party to constitute the stipulated condition as a clog on the right to redemption.

1
 

Subsequent agreement to postpone redemption

Any subsequent agreement which acts as an obstruction to the mortgagor by creating any personal obligation will be considered as a
clog on the right to redemption. This is because, until and unless there is a charge on the transferred property, the mortgagor is not
liable for any sum personally except the mortgage amount. In the judicial pronouncement of  Sheo Shankar v. Parma,[12] The mortgagor
transferred some property to the mortgagee. Subsequently, the mortgagor needed more money. So through a simple mortgage, the
mortgagor took another loan from the mortgagee. A condition was inserted in the simple mortgage agreement by the mortgagee that
until and unless the amount of simple mortgage was repaid the property cannot be redeemed by the mortgagor. The Court opined that
this condition was a clog.

Collateral benefit to the mortgagee

A mortgagee may avail some collateral benefit during the period of the mortgage, in which case it’ll be held valid. The mortgagee can
also avail some benefits after the mortgage gets over, but in some cases, it may be considered as void and a clog.

In the case of Noakes & Co. v. Rice there was a condition in the mortgage deed that the mortgagor will sell all the beer brewed on his
land to the mortgagee. The Court held that such a condition was valid during the existence of the mortgage, but after the property has
been redeemed, such condition would not be valid. The property should be returned to the mortgagor without any tie.

This proposition of the law is also backed by the Indian Courts. In the case of  Bhimrao Nagojirao Patankar v. Sakharam Sabajikathak,
[13] The Court held that where a condition in the mortgage deed allowed the mortgagee to remain in the possession of the property
through permanent tenancy will be considered as a clog. The Court was of the view that the collateral benefit went beyond the period of
redemption and hence invalid.

Footnotes:

[1]https://indiankanoon.org/doc/102524/

[2](1899) 2 Ch 474

[3] AIR 1999 SC 3750.

[4]Valdas and Ors. v. BaiJivi and Ors, AIR 1973 Guj 93

[5]AIR 1953 Bom 408.

[6]AIR 1957 MP 200.

[7]AIR 1957 Ker 175

[8]AIR 1985 MP 1.

[9] AIR 1930 PC 142

[10]Rama Krishnayya v. VenkataSomayajulu, AIR 1934 Mad 31.

[11]SundarKoer v. S Krishnen, ILR 34 Cal 150.

[12] ILR 26 All 559.

[13]Bhimrao Nagojirao Patankar v. Sakharam Sabaji Kantak, AIR 1922 Bom 277.

2
What are the essentials of a valid gift under the provisions of Transfer of Property
Act, 1882?

There are the following five essentials of a valid gift:

1. Transfer of ownership
2. Existing property
3. Transfer without consideration
4. Voluntary transfer with free consent
5. Acceptance of the gift

Transfer of ownership
The transferor, i.e., the donor must divest himself of absolute interest in the property and vest it in the transferee, i.e., the donee.
Transfer of absolute interests implies the transfer of all the rights and liabilities in respect of the property. To be able to effect such a
transfer, the donor must have the right to ownership of the said property. Nothing less than ownership may be transferred by way of
gift. However, like other transfers, the gift may also be made subject to certain conditions.

Existing property
The property, which is the subject matter of the gift may be of any kind, movable, immovable, tangible, or intangible, but it must be in
existence at the time of making a gift, and it must be transferable within the meaning of Section 5 of the Transfer of Property Act.

Gift of any kind of future property is deemed void. And the gift of spes successionis (expectation of succession) or mere chance of
inheriting property or mere right to sue, is also void.

Transfer without consideration

A gift must be gratuitous, i.e., the ownership in the property must be transferred without any consideration. Even a negligible property
or a very small sum of money given by the transferee in consideration for the transfer of a very big property would make the transaction
either a sale or an exchange. Consideration, for the purpose of this section, shall have the same meaning as given in Section 2(d) of
the Indian Contract Act. The consideration is pecuniary in nature, i.e., in monetary terms. Mutual love and affection is not pecuniary
consideration and thus, property transferred in consideration of love and affection is a transfer without consideration and hence a gift. A
transfer of property made in consideration for the ‘services’ rendered by the donee is a gift. But, a property transferred in consideration
of donee undertaking the liability of the donor is not gratuitous, therefore, it is not a gift because liabilities evolve pecuniary obligations.

Voluntary transfer with free consent

The donor must make the gift voluntarily, i.e., in the exercise of his own free will and his consent as is a free consent. Free consent is
when the donor has the complete freedom to make the gift without any force, fraud coercion, and undue influence. Donor’s will in
executing the deed of the gift must be free and independent. Voluntary act on a donor’s part also means that he/she has executed the
gift deed in full knowledge of the circumstances and nature of the transaction. The burden of proving that the gift was made voluntarily
with the free consent of the donor lies on the donee.

Acceptance of gift
The donee must accept the gift. Property cannot be given to a person, even in gift, against his/her consent. The donee may refuse the
gift as in cases of non-beneficial property or onerous gift. Onerous gifts are such where the burden or liability exceeds the actual market
value of the subject matter. Thus, acceptance of the gift is necessary. Such acceptance may be either express or implied. Implied
acceptance may be inferred from the conduct of the donee and the surrounding circumstances. When the donee takes possession of the
property or of the title deeds, there is acceptance of the gift. Where the property is on lease, acceptance may be inferred upon the
acceptance of the right to collect rents. However, when the property is jointly enjoyed by the donor and donee, mere possession cannot
be treated as evidence of acceptance. When the gift is not onerous, even minimal  evidence is sufficient to prove that the gift has been
accepted by donee. Mere silence of the donee is indicative of the acceptance provided it can be established that the donee had
knowledge of the gift being made in his favour.

Where the deed of gift categorically stated that the property had been handed over to the donee and he had accepted the same and the
document is registered, a presumption arises that the executants are aware of what was stated in the deed and also of its correctness.
When such presumption is coupled with the recital in the deed that the donee had been put in possession of the property, the onus of
disproving the presumption would be on the donor and not the donee.

Where the donee is incompetent to contract, e.g., minor or insane, the gift must be accepted on his behalf by a competent person. The
gift may be accepted by a guardian on behalf of his ward or by a parent on behalf of their child. In such a case, the minor, on attaining
majority, may reject the gift.

Where the donee is a juristic person, the gift must be accepted by a competent authority representing such legal person. Where the gift
is made to a deity, it may be accepted by its agent, i.e., the priest or manager of the temple.

Section 122 provides that the acceptance must be made during the lifetime of the donor and while he is still capable of giving. The
acceptance that comes after the death or incompetence of the donor is no acceptance. If the gift is accepted during the life of the donor
but the donor dies before the registration and other formalities, the gift is deemed to have been accepted and the gift is valid.

3
Suspension or revocation of gifts
Section 126 of the Act provides the legal provisions which must be followed in case of a conditional gift. The donor may make a gift
subject to certain conditions of it being suspended or revoked and these conditions must adhere to the provisions of Section 126. This
Section lays down two modes of revocation of gifts and a gift may only be revoked on these grounds.

Revocation by mutual agreement

Where the donor and the donee mutually agree that the gift shall be suspended or revoked upon the happening of an event not
dependent on the will of the donor, it is called a gift subject to a condition laid down by mutual agreement. It must consist of the
following essentials:

 The condition must be expressly laid down

 The condition must be a part of the same transaction, it may be laid down either in the gift-deed itself or in a separate
document being a part of the same transaction.

 The condition upon which a gift is to be revoked must not depend solely on the will of the donor.

 Such condition must be valid under the provisions of law given for conditional transfers. For eg. a condition totally prohibiting
the alienation of a property is void under Section 10 of the Transfer of Property Act.

 The condition must be mutually agreed upon by the donor and the donee.

 Gift revocable at the will of the donor is void even if such condition is mutually agreed upon.

Revocation by the rescission of the contract

Gift is a transfer, it is thus preceded by a contract for such transfer. This contract may either be express or implied. If the preceding
contract is rescinded then there is no question of the subsequent transfer to take place. Thus, under Section 126, a gift can be revoked 
on any grounds on which its contract may be rescinded. For example, Section 19 of the Indian Contract Act makes a contract voidable at
the option of the party whose consent has been obtained forcefully, by coercion, undue influence, misrepresentation, or fraud. Thus, if a
gift is not made voluntarily, i.e., the consent of the donor is obtained by fraud, misrepresentation, undue influence, or force, the gift may
be rescinded by the donor.

The option of such revocation lies with the donor and cannot be transferred, but the legal heirs of the donor may sue for revocation of
such contract after the death of the donor.

The limitation for revoking a gift on the grounds of fraud, misrepresentation, etc, is three years from the date on which such facts come
to the knowledge of the plaintiff (donor).

The right to revoke the gift on the abovementioned grounds is lost when the donor ratifies the gift either expressly or by his conduct.

Bonafide purchaser
The last paragraph of Section 126 of the Act protects the right of a bonafide purchaser. A bonafide purchaser is a person who has
purchased the gifted property in good faith and with consideration. When such a purchaser is unfamiliar with the condition attached to
the property which was a subject of a conditional gift then no provision of revocation or suspension of such gift shall apply.

4
This extract is taken from Safdarjung Hospital v. Kuldip Singh Sethi, (1970) 1 SCC 735 at
page 739
6. It is thus that the three cases came before us and were heard together. Counsel in
these case submit that the ruling in the Hospital Mazdoor Sabha case has now been
considerably shaken by the pronouncement in the Madras Gymkhana Club case where it was
observed that the Hospital Mazdoor Sabha case was one which might be said to be on the
verge and that there were reasons to think that it took an extreme view of an industry.
Relying on this observation, counsel in the three appeals asked for a reconsideration of
the Hospital Mazdoor Sabha case although they conceded that it was not yet overruled. We
accordingly heard arguments on the general question whether a hospital can be said to be
an industry falling within the Industrial Disputes Act and under what circumstances. We also
heard arguments on the merits of the appeals to determine whether the decisions rendered
therein could be upheld even if the Hospital Mazdoor Sabha case was held applicable. We
shall follow the same course here. We shall first consider the general proposition whether a
hospital can be considered to fall within the concept of industry in the Industrial Disputes
Act and whether all hospitals of whatever description can be covered by the concept or only
some hospitals under special conditions. We shall then consider the merits of the individual
cases insofar as may be necessary.

This extract is taken from Safdarjung Hospital v. Kuldip Singh Sethi, (1970) 1 SCC 735 at
page 744
21. It, therefore, follows that before an industrial dispute can be raised between
employers and their employees or between employers and employers or between
employees and employees in relation to the employment or non-employment or the terms
of employment or with the conditions of labour of any person, there must be first
established a relationship of employers and employees associating together, the former
following a trade, business, manufacture, undertaking or calling of employers in the
production of material goods and material services and the latter following any calling,
service, employment, handicraft, or industrial occupation or avocation of workmen in aid of
the employers' enterprise. It is not necessary that there must be a profit motive but the
enterprise must be analogous to trade or business in a commercial sense.

This extract is taken from Safdarjung Hospital v. Kuldip Singh Sethi, (1970) 1 SCC 735 at
page 745
24. In the Hospital Mazdoor Sabha case hospitals run by Government and even by a
private association, not on commercial lines but on charitable lines or as part of the
functions of Government Department of Health were held included in the definition of
industry. The reason given was that the second part of the definition of industry contained
an extension of the first part by including other items of industry. As we have pointed out
the first and the second parts of the definition are not to be read in isolation as if they were
different industries but only as aspects of the occupation of employers and employees in an
industry. They are two counterparts in one industry. The case proceeds on the assumption
that there need not be.2 an economic activity since employment of capital and profit motive
were considered unessential. It is an erroneous assumption that an economic activity must
be related to capital and profit-making alone. An economic activity can exist without the

5
presence of both. Having rejected the true test applied in other cases before, the test
applied was can such activity be carried on by private individuals or group of individuals?
Holding that a hospital could be run as a business proposition and for profit, it was held that
a hospital run by Government without profit must bear the same character. With respect,
we do not consider this to be the right test. That test was employed to distinguish between
the administrative functions of Government and local authorities and their functions
analogous to business but it cannot be used in this context. When it was emphasised in the
same case that the activity must be analogous to business and trade and that it must be
productive of goods or their distribution or for producing material services to the
community at large or a part of it, there was no room for the other proposition that
privately run hospitals may in certain circumstances be regarded as industries. The
expression “satisfying material human needs” was evolved which bore a different meaning.
These observations were apparently based on the observations of Isaacs and Rich, JJ.,
in Federated Municipal and Shire Council Employees of Australia v. Melbourne Corporation [26
CLR 508] but they were:
“Industrial disputes occur when, in relation to operations in which capital and labour
are contributed in Cooperation for the satisfaction of human wants and desires, those
engaged in Cooperation dispute as to the basis to be observed, by the parties engaged,
respecting either a share of the produce or any other terms and conditions of their
Cooperation.… The question of profit-making may be important from an income tax
point of view, as in many municipal cases in England; but, from an industrial dispute
point of view, it cannot matter whether the expenditure is met by fares from passengers
or from rates.”

This extract is taken from Safdarjung Hospital v. Kuldip Singh Sethi, (1970) 1 SCC 735 at
page 746
26. It is argued that after the amendment of the Industrial Disputes Act by which “service
in hospitals and dispensaries” is included in public utility services, there is no scope for
saying that hospitals are not industries. It is said that Parliament has accepted that the
definition is suited to include a hospital. This contention requires close attention in view of
the fact that it was noticed in the Hospital Mazdoor Sabha case although that arose before
the amendment.

This extract is taken from Safdarjung Hospital v. Kuldip Singh Sethi, (1970) 1 SCC 735 at
page 747
34. It is obvious that Safdarjung Hospital is not embarked on an economic activity which
can be said to be analogous to trade or business. There is no evidence that it is more than a
place where persons can get treated. This is a part of the functions of Government and the
hospital is run as a Department of Government. It cannot, therefore, be said to be an
industry.

This extract is taken from Safdarjung Hospital v. Kuldip Singh Sethi, (1970) 1 SCC 735 at
page 748
37. The Tuberculosis Hospital is not an independent institution. It is a part of the
Tuberclosis Association of India. The hospital is wholly charitable and is a research institute.
The dominant purpose of the Hospital is research and training, but as research and training
cannot be given without beds in a hospital, the hospital is run. Treatment is thus a part of

6
research and training. In these circumstances, the Tuberculosis Hospital cannot be
described as an industry. The order of the Additional Industrial Tribunal, Delhi on the
preliminary point must be reversed. The reference to the Tribunal under Section 10(1)(d) of
the Industrial Disputes Act was incompetent. The appeal is allowed but we make no order
about costs.
CA No. 1777 of 1969

This extract is taken from Bangalore Water Supply & Sewerage Board v. A. Rajappa, (1978) 2
SCC 213 : 1978 SCC (L&S) 215 at page 297
180. That lends to the consideration whether charitable enterprises can at all be
industries. Viewing the problem from the angle from which one must, according to me, view
the State's inalienable functions, it seems to me to follow logically that a systematic activity
which is organised or arranged in a manner in which trade or business is generally
organised or arranged would be an industry despite the fact that it proceeds from
charitable motives. It is the nature of the activity that one has to consider and it is upon the
application of that test that the State's inalienable functions fall within the definition of
“industry”. The very same principle must yield the result that just as the consideration as to
who conducts an activity is irrelevant for determining whether the activity is an industry, so
is the fact that the activity is charitable in nature or is undertaken with a charitable motive.
The status or capacity, corporate or constitutional, of the employer would have, if at all,
closer nexus, than his motive, with the question whether the activity is an industry. And yet
that circumstance, according to me, cannot affect the decision of the question. The motive
which propels an activity is yet another step removed and, ex hypothesi, can have no
relevance on the question as to what is the nature of the activity. It is never true to say that
the nature of an activity is charitable. The subjective motive force of an activity can be
charity but for the purpose of deciding whether an activity is an industry, one has to look at
the process involved in the activity, objectively. The argument that he who does charity is
not doing trade or business misses the point because the true test is whether the activity,
considered objectively, is organised or arranged in a manner in which trade or business is
normally organised or arranged. If so, the activity would be an industry no matter whether
the employer is actuated by charitable motives in undertaking it. The jural foundation of any
attempt to except charitable enterprises from the scope of the definition can only be that
such enterprises are not undertaken for profit. But then that, clearly, is to introduce the
profit-concept by a side wind, a concept which, I suppose, has been rejected consistently
over the years. If any principle can be said to be settled law in this vexed field it is this: the
twin consideration of profit motive and capital investment is irrelevant for determining
whether an activity is an industry. Therefore, activities which are dominated by charitable
motives, either in the sense that they involve the rendering of free or near-free services or in
the sense that the profits which they yield are diverted to charitable purposes, are not
beyond the pale of the definition in Section 2(j). It is as much beside the point to inquire who
is the employer as it is to inquire why is the activity undertaken and what the employer does
with his profits, if any.

This extract is taken from Bangalore Water Supply & Sewerage Board v. A. Rajappa, (1978) 2
SCC 213 : 1978 SCC (L&S) 215 at page 297
181. Judged by these tests, I find myself unable to accept the broad formulation that a
solicitor's establishment cannot be an industry. A solicitor, undoubtedly, does not carry on
trade or business when he acts for his client or advises him or pleads for him, if and when

7
pleading is permissible to him. He pursues a profession which is variously and justifiably
described as learned liberal or noble. But, with great respect, I find it difficult to infer from
the language of the definition in Section 2(j), as was done by this Court in National Union of
Commercial Employees v. M.R. Meher, Industrial Tribunal, Bombay [AIR 1962 SC 1080 : 1962
Supp 3 SCR 157 : (1962) 1 LLJ 241 : 22 FJR 25] that the legislature could not have intended to
bring a liberal profession like that of an attorney within the ambit of the definition of
industry. In Hospital Mazdoor Sabha the Court while evolving a working principle stated that
an industrial activity generally involves, inter alia, the cooperation of the employer and the
employee. That the production of goods or the rendering of material services to the
community must be the direct and proximate result of such co-operation is a further
extension of that principle and it is broadly by the application thereof that a solicitor's
establishment is held not to attract the definition clause. These refinements are, with
respect, not warranted by the words of the definition, apart from the consideration that in
practice they make the application of the definition to concrete cases dependent upon a
factual assessment so highly subjective as to lead to confusion and uncertainty in the
understanding of the true legal position. Granting that the language of the definition is so
wide that some limitation ought to be read into it, one must step at a point beyond which
the definition will skid into a domain too rarefied to be realistic. Whether the co-operation
between the employer and the employee is the proximate cause of the ultimate product
and bears direct nexus, with it is a test which is almost impossible of application with any
degree of assurance or certitude. It will be as much true to say that the solicitor's assistant,
managing clerk, librarian and the typist do not directly contribute to the intellectual end
product which is a creation of his personal professional skill as that, without their active
assistance and co-operation it will be impossible for him to function effectively. The
unhappy state of affairs in which the law is marooned will continue to baffle the skilled
professional and his employees alike as also the Judge who has to perform the unenviable
task of sitting in judgment over the directness of the co-operation between the employer
and the employee, until such time as the legislature decides to manifest its intention by the
use of clear and indubious language. Beside the fact that this Court has so held in National
Union of Commercial Employees the legislature will find a plausible case for exempting the
learned and liberal professions of lawyers, solicitors, doctors, engineers, chartered
accountants and the like from the operation of industrial laws. But until that happens, I
consider that in the present state of the law it is difficult by judicial interpretation to create
exemptions in favour of any particular class.

The definition of “industry” has been modified. Industry means any systematic activity
carried on by cooperation between employer and his workers (whether such workers 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 with a view to satisfy human wants
or wishes (not being wants or wishes which are merely spiritual or religious in nature).

8
However, it does not include institutions owned or managed by organisations wholly or
substantially engaged in any charitable, social or philanthropic services; sovereign functions;
domestic services; and any other activity as may be notified by the Central Government
(clause 2(m) in the Code.
This new definition is based on the definition of industry passed by the Parliament in 1982
(46 of 1982) but did not come into force. (clause 2(m) in the Code). Further, a provision has
been made in section 99 that each notification made under clause 2 (m) shall be laid before
both the Houses of Parliament for a period of 30 days.
https://www.im4change.org/upload/files/Parliamentary%20Standing%20Committee%20on
%20Labour%202019-20%20Industrial%20Relations%20Code%202019.pdf