PHYSICAL RESEARCH LABORATORY versus K.G. SHARMA

Citation: [1997] 3 S.C.R. 733 · Decided: 08-04-1997 · Supreme Court of India · Bench: K. RAMASWAMY · Disposal: Appeal(s) allowed

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Judgment (excerpt)

PHYSICAL RESEARCH LABORATORY 
v. 
K.G. SHARMA 
APRIL 8, 1997 
(K. RAMASWAMY AND G.T. NANAVATI, JJ.] 
Labour Law: 
Industlial Disputes Act, 1947: Section 2(j). 
"Industry''-Bangalore Water Supply Case-Principles laid down 
in-Held : Not exhaustive-Circumstances under which the principles were 
laid down, explained. 
A 
B 
c 
Research Institutions--Run by Government-Physical Research 
Laboratory--Held : Not an 'industry' because it was purely a research or-
D 
ganisation-lt was more an institution discharging governmental functions 
and a domestic enterprise than a commercial enterprise, though it was 
canying on the activity of research with the }1e/p of its employees. 
Section 2(s)-'Workman'........Physical Research Laboratory (PRL) 
employees-Held : Not 'workmen' because PRL not an 'industry'-Hence, 
E 
employees of PRL could not claim retirement at the age of 60 instead of at 
the age of 58. 
Words and Phrases : 
'lndustry'-Meaning of-In the context of S. 2(j) of the Industrial 
F 
Disputes Act, 1947. 
The respondent "was an employee of Physical Research Laboratory 
(PRL), an institution under the Government of India, Department of 
Space. On attaining the age of 58 years the respondent was retired from G 
service. Feeling aggrieved by his retirement at the age of 58 years and not 
at the age of 60 years the respondent filed a petition before the Labour 
Court. 
The Labour Court rejected the contention of the appellant that PRL 
was not an 'industry' within the meaning of Section of 2 (j) of the Industrial H 
733 
734 
SUPREME COURT REPORTS 
(1997] 3 S.C.R. 
A Disputes Act, 1947. The Labour Court had recorded a finding that the 
research work carried on by the PRL was not connected with production, 
supply or distribution of material goods or services. The Labour Court, 
therefore, held that the respondent was entitled to continue in service upto 
the age of 60 years and the order retiring him earlier was declared as bad. 
B 
Hence this appeal. 
Allowing the appeal, this Court 
HELD : 1.1. The <1uestion whether Physical Research Laboratory 
(PRL) is an 'industry' under the Industrial Disputes Act, 1947 will have 
C have to be decided by applying the principles laid down in Bangalore Water 
Supply case. At the same time, it has to be kept in mind these principles 
were formulated as this court found the definition of the word 'industry' 
as vague and "rather clumsy, vaporous and tall-and-dwarf'. Therefore, 
while interpreting the words 'undertaking', 'calling' and 'service' which are 
D of much wider import, the principles of 'noscitur a sociis' was applied and 
it was held that they would be 'industry' only if they are found to be 
analogous to trade or business. Furthermore, an activity undertaken by 
the Government cannot be regarded as 'industry' if it is done in discharge 
of its sovereign functions. One more aspect to be kept in mind is that the 
aforesaid principles are not exhaustive either as regards what can be said 
E 
to be sovereign functions or as regards the other aspects dealt with by the 
court. [741-B-D] 
1.2. PRL is an institution under the Government of India's Depart-
ment of Space. It is engaged in pore research in space science. The purpose 
F of the research is to acquire knowledge about the formation and evolution 
of the universe but the knowledge thus acquired is not intended for sale. 
The Labour Court has recorded a categorical finding that the research 
work carried on by PRL is not connected with production, supply or 
distribution of material goods or services. The material on record further 
discloses that PRL is conducting research not for the benefit or use of 
G others. TI10ugh the results of the research work done by it are occasionally 
published they have never been sold. There is no material to show that the 
knowledge so acquired by PRL is marketable or has any commercial value. 
It has not been pointed out how the knowledge acquired by PRL or the 
results of the research occasionally published by it will be useful to persons 
H other than those engaged in such type of study. The material discloses that 
PHYSICAL REASEARCH LABO RA TORY v. K.G. SHARMA 
735 
the object with which the research activity is undertaken by PRL is to A 
obtain knowledge for the benefit of the Department of Space. Its object is 
not to render services to others; nor in fact it does so except in an indirect 
manner. [743-D-G] 
1.3. Neither from the nature of its organisation nor from the nature 
and ch

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