MANAGEMENT OF THE FEDERATION OF INDIAN CHAMBERS OF COMMERCE AND INDUSTRY versus THEIR WORKMAN, SHRI R. K. MITTAL

Citation: [1972] 2 S.C.R. 353 · Decided: 15-11-1971 · Supreme Court of India · Bench: C.A. VAIDYIALINGAM

Cited by 2 judgment(s) · cites 7 · see the full citation network in Lexace

Judgment (excerpt)

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353 
MANAGEMENT OF THE FEDERATION OF INDIAN 
CHAMRERS OF COMMERCE AND INDUSTRY 
v. 
THEIR WORKMAN, SURI R. K. MITTAL 
November 15, 1971 
[C. A. VAIDIALINGAM AND P. JAGANMOHAN REDDY, JJ.] 
Industrial Disputes Act, 1947, s. 2(j)-'Jndustry' what is-Federation 
of Indian Chc.n1ber.\· of Commerce attd Industry whether an 'industry', 
Do111estic Inquiry-Finding as to 1nisconduct of e111ployee arrived at 
1vithout evidence-Labour Court is justified in going into evidence' and 
deter1nining question for itself. 
The respondent was an employee of the appellant Federation. His 
services were lent to the Indian National Committee of International Cham-
ber of Commerce on the occasion of the 20th Congress of the International 
Chamber of Commerce held in Delhi in February 1965. He claimed over-
time payment for 40 days whereas he 
was 
paid only for 7 days., He 
thereupon sent lawyers' notices to the Appellant Federation, to the Indian 
National Committee aforesaid as well as to the International Chamber of 
Commerce. This was held t~ be misconduct 
by 
>n 
Enquiry Officer 
appointed by the.appellant. The consequent industrial dispute was reforred 
to the Labour Court. A preliminary issue was raised that the Federation 
\\'J.S not an industrv and therefore the Labour Court haJ. no jurisdiction 
to adiudicate oil thC reference. 
1·his preliminary objection was overruled 
aud it was held on the evidence that the charge held proved in the domes-
tic inquiry was illegal and unjustified; that the Secretary had no authority 
to terminate the services; that the Ma_nagement did not like the trade union 
activities of the .respondent. that the actioo of tern1ination of services of 
the respondent amounted to victimisation and that even if it was not an 
act of victimisation in anv event the punis.hment was ~evere and therefore 
it amounted to victimisation. 
The Federation appealed to 
this 
Court. 
After a re,iew of the cases relating to the definition of 'industry' in s. 2(j) 
of the Industrial Disputes Act, 1947, 
HELD : 
(i) The !inch-pin of the definition of industrv is to ascertain 
the systematic activitv which 
the 
organisation 
is 
discharging 
namely 
\.\-hether it partakes the nature of a business or trade, or is an undertaking 
or manufacture. or calling of employers. If it is that and there is a co· 
operation of the employer and the employee resulting in the production 
of material services. it is an industry notwithstandin2 that its objects are 
charitable or that it does not make profit or even where profits are made. 
they are not distributed among the members. [376 G] 
In the Safdarj11ng Hospital case and the connected cas"' of the Tuber· 
culosis Hospital and the Kurji Holi Family Hospital it was found that none 
of them carried on an economic activity analogous to trade or 
business. 
The criteria that in the two latter hospitals the object wos charitable does 
~ot ap!'°ar to ha~e been the sole test Jor concluding that they were not 
md!"stnes. 
In _on~ case the dominant activity was research and training 
wh!c~ n~cessa:1Iy involved t:e~tment also. 
In the other case though the 
activity 11 earned on was tra1~r~g. research and treatment, the distribution 
o! .'urplus as profit was proh1b1ted. The cumulative effect of these acti· 
\lties and the nature of such activities determined the question whether 
354 
SUPREME ,COURT REPORTS 
[1972] 2 S.C.R. 
these institutions were an industry or not, not that because their respec-
tive objects were charitable, that alone was considered to be the criteria 
for not considering it as an industry. [372 A-C] 
The cases under the Income-tax Act are of Iitlle assistance in deter-
n1inipg whether an orgariisation, association or undertaking is an industry 
no!Withstanding the fact that its main object is charitable. The object of 
an o_rganisation may be charitable but, nevertheless, Its activity may 
be 
cornmcrcial so as to satisfy the definition of an 'industry' as explained and 
elucidated by this Court particularly in the Safdarjung Hospital case. 
We 
could the1efore envisage an institution having its aims and-objects charj-
table. and yei its activities coulcl bring it within the definiti9n of industry 
in s. 2(j). [374 F-H] 
The fact that in s, 32(5) of the Payment of Bonus Act Chambers of 
Commerce and certain other organisations \Vith charitable purpose '"''ere 
excluded did not go to show that thev were not industries. 
No such in-
ference would aris

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