Hindi Vidya Prachar Samiti’s College Of Law

◦ NAME – Khushi P. Agarwal.

◦ CLASS & SEMESTER – TYBLS/LLB Sem V.
◦ ROLL . No – A01.
◦ SUBJECT – Labour Law.

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INDEX
Sr. no. Topic Pg. no

1. ◦ Bangalore Water Supply & 03.

Sewerage Board v. A. Rajappa

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BANGALORE WATER SUPPLY & SEWERAGE
BOARD V. A. RAJAPPA

AIR 1978 SC 553

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Introduction.
◦ Collective bargaining is the process in which working people, through their unions, negotiate contracts with their
employers to determine their terms of employment, including pay, benefits, hours, leave, job health and safety policies,
ways to balance work and family, and more.
◦ The term “collective bargaining” refers to the negotiation of employment terms between an employer and a group of
workers.
◦ Employees are normally represented by a labor union during collective bargaining.
◦ Bangalore Water Supply & Sewerage Board v. A. Rajappa has been a landmark case in the history of Labour and
Industrial Laws in India.
◦ This case helped in clarifying the definition of Industry in Section 2 (j) of the Industrial Dispute Act, 1947 and an
explanation on what all activities amount to sovereign functions.
◦ This case helped in determining sovereign functions being an exception to "Industry"

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Relevant case sections.
◦ Section 2(j) of the Industrial Dispute Act, 1947, defines the term "industry", herein read under as: "Any
business, trade, undertaking, manufacture, or calling of employers and includes any calling, service,
employment, handicraft or industrial occupation or avocation of workmen".
◦ According to Article 2 of the Collective Bargaining Convention, 1981 (No. 154) of the International
Labour Organisation , “collective bargaining extends to all negotiations which take place between an
employer, a group of employers or one or more employers’
◦ Section 18 recognises industrial dispute settlement through collective bargaining.

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Facts of the case.
◦ The Appellant Board in Bangalore Water Supply Case imposed fines on the respondent employees for instances of
misconduct and successfully recovered various sums as penalties. In response, the employees initiated Claims
Application No. 5/72 under Section 33C(2) of the Industrial Disputes Act, asserting that the disciplinary actions taken
against them had transgressed the principles of natural justice.
◦ The Appellant Board raised a preliminary objection before the Labour Court, contending that the Board, being a
statutory body responsible for providing essential amenities to citizens, essentially fulfils a sovereign function and
therefore does not qualify as an “industry” as defined under section 2(j) of the Industrial Disputes Act. Consequently, it
was argued that the employees were not classified as “workmen,” thus challenging the jurisdiction of the Labour Court
to adjudicate upon the employees’ claim.
◦ Despite the Board’s objection, the Labour Court ruled in favour of the employees. Subsequently, the Appellant Board
submitted two Writ Petitions, specifically, Nos. 868 and 2439 of 1973, before the Karnataka High Court in Bangalore.
The Division Bench of the High Court dismissed these petitions, asserting that the Appellant Board indeed falls under
the definition of an “industry” as stated in section 2(i) of the Industrial Disputes Act, 1947.

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Issues raised.
◦ The central issue, in Bangalore Water Supply Case, was whether a statutory body engaged in activities
essential for providing basic amenities to citizens, which were considered as regal (sovereign) functions,
could be classified as an “industry” under the definition provided in Section 2(j) of the Industrial
Disputes Act, 1947.
◦ The case revolved around determining whether such activities could be subject to the legal provisions
governing industrial disputes.

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Judgment / Decision.
◦ In Bangalore Water Supply Case, a seven-judge panel of the Supreme Court conducted a comprehensive examination
of the scope of “industry.”
◦ The majority decision, endorsed by five judges, with two judges dissenting, overruled previous judgments such as
Safdarjung Solicitors’ case, Gymkhana, Delhi University, Dhanrajgiri Hospital and Cricket Club of India.
◦ It upheld the principles established in the Hospital Mazdoor Shabha and Indian Standards Institution cases.
◦ The court followed the precedents set by the Banerji and Corporation of City of Nagpur cases.
◦ The Bench in Bangalore Water Supply Case comprised seven esteemed judges: Beg M. Hameedullah (CJ),
Chandrachud Y.V., Bhagwati P.N., Krishna Iyer V.R., Tulzapurkar V.D., Desai D.A. and Singh Jaswant. Its purpose was
to delineate the extent of “industry.”
◦ The concept of the “triple test” emerged from this case, serving as a benchmark for assessing the legality of various
establishments.

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Conclusion.
◦ The Supreme Court in Bangalore Water Supply Case determined that professions, clubs, educational institutions,
cooperatives, research institutes, charitable projects and similar ventures if they meet the triple test criteria, fall within
the scope of Section 2(j).
◦ The ruling encompassed organised activities meeting these criteria as “industry,” irrespective of trade/business and
extended to professions, clubs, educational institutions, etc.
◦ The “dominant nature test” determined an undertaking’s nature based on the most significant department.
◦ Sovereign functions were exempted and separable industry units within sovereign departments fell within Section 2(j)
of the Industrial Disputes Act.
◦ In essence, organised activities fulfilling the triple elements, even if they do not strictly align with trade or business,
can be considered “industry” if the employer-employee relationship resembles that of trade or business.