UNIVERSITY INSTITUTE OF LAWS

PUNJAB UNIVERSITY REGIONAL CENTRE, LUDHIANA

LABOUR AND INDUSTRIAL LAWS

TOPIC : CONCEPT INDUSTRY, STRIKE AND LOCKOUT [BANGALORE

WATER SUPPLY V. A. RAJAPPA & OTHER, 1978 AIR 548, 1978 SCR (3) 207]

SUBMITTED BY: SUBMITTED TO:

Abhishek Dr. Renu Sharma
Rollno.66/20

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 Acknowledgement

I would like to express my special thanks of gratitude to my Labour and Industrial

Laws professor Dr. Renu Sharma Who gave me the golden opportunity to do this
wonderful project, which also helped me in doing a lot of research and I came to
know about so many new things. I am really thankful to her. Secondly, I would also
like to thank my parents and friends who helped me a lot in finalizing this project
within the limited time frame.

Abhishek

Rollno:66/20

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 Concept of Industry, Strike And lock-out

Introduction
The Industrial Disputes Act, 1947 is a key piece of labour legislation in India,
designed to regulate the relationship between employers and employees, with the
primary objective of preventing and resolving industrial disputes. It plays a vital
role in maintaining industrial harmony and safeguarding the rights of workers. The
Act defines crucial terms like “industry,” “strike,” and “lockout”, which are central
to understanding industrial relations. These concepts form the foundation of
labour-management relations, and understanding them is essential for
interpreting the rights, obligations, and limitations of both employers and
employees under the Act. This assignment will explore these concepts in detail,
highlighting their significance in the broader framework of industrial dispute
resolution.

Industry
The term industry is defined in Section 2(j).- “Industry’ means any business, trade,
undertaking, manufacture or calling of employers and includes any calling, service,
employment, handicraft or industrial occupation or avocation of workmen.
This definition is in two parts. The first says that industry means any business,
trade, undertaking, manufacture or calling of employers and the second part
provides that it includes any calling, service, employment, handicraft, or industrial
occupation or avocation of workmen. “If the activity can be described as an
industry with reference to the occupation of the employers, the ambit of the
industry, under the force of the second part takes in the different kinds of activity
of employees mentioned in the second part. But the second part standing alone
cannot define industry. By the inclusive part of the definition the labour force
employed in any industry is made an integral part of the industry for the purpose
of industrial disputes although industry is ordinarily something which employers
create or undertake”.’ However, the concept that (industry is ordinarily something
which employers create or undertake” is gradually yielding place to the modern
concept which regards industry as a joint venture undertaken by employers, and

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workmen, an enterprise which belongs equally to both.? Further it is not
necessary to view definition of industry under Section 2() in two parts. The
definition read as a whole denotes a collective enterprise in which employers and
employees are associated. It does not consist either by employers alone or by
employees alone. An industry exists only when there is relationship between
employers and employees, the former engaged in business, trade, undertaking,
manufacture or calling of employers and the latter engaged in any calling, service,
employment, handicraft or industrial occupation or avocation. There must,
therefore, be an enterprise in which the employers follow their avocations as
detailed in the definition and employ workmen.’ Thus, a basic requirement of
‘industry’ is that the employers must be carrying on any business, trade,
undertaking, manufacture or calling of employers’ There is not much difficulty in
ascertaining the meaning of the words business, trade, manufacture, or calling of
employers in order to determine whether a particular activity carried on with the
co-operation of employer and employees is an industry or not but the difficulties
have cropped up in defining the word ‘undertaking.
“Undertaking” means anything undertaken, any business, work or project which
one engages in or attempts, or an enterprise. It is a term of very wide denotation.
But all decisions of the Supreme Court are agreed that an undertaking to be
within the definition in Section 2(j) must be read subject to a limitation, namely,
that it must be analogous to trade or business.’ Some working principles have
been evolved by the Supreme Court in a number of decisions which furnish a
guidance in determining what are the attributes or characteristics which would
indicate that an undertaking is analogous to trade or business. The first of such
principles was stated by Gajendragadkar, J. In Hospital Mazdoor Sabha case as “As
a working principle it may be stated that an activity systematically or habitually
undertaken for the production or distribution of goods or for the rendering of
material services to the community at large or a part of such community with the
help of employees is an undertaking. Such an activity generally involves the co-
operation of the employer and the employees; and its object is the satisfaction of
material human needs. It must be organised or arranged in manner in which trade
or business is generally organised or arranged It must not be casual, nor must it be
for one’s self nor for pleasure. Thus the manner in which the activity in question is

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organised or arranged, the condition of the co-operation between the employer
and the employee necessary for its success and its object to render material
service to the community can be regarded as some of the features which are
distinctive of activities to which Section 2(j) applies.

In Bangalore Water Supply v. A. Rajappa a seven Judges' Bench of the Supreme

Court exhaustively considered the scope of industry and laid down the following
test which has practically reiterated the test laid down in Hospital Mazdoor Sabha
case :
(1) Triple Test Formula : According to the first guiding principle, an enterprise is
prima facie an
'industry' if it is :

(i) a systematic activity;

(ii) organised by co-operation between employer and employee;

(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, 1.e. making, on a large scale
prasad or food)
(2) Absence of Profit motive or gainful objective is irrelevant, be the venture in
the public, joint, private or other sector.

(3) The true focus is functional and the decisive test is the nature of the
activity with special emphasis on the employer-employee relations,
(4) If the organisation is trade or business-“It does not cease to be one
because of philanthropy animating the undertaking.
(5) Sovereign functions of Government definition of “industry”. Are exempted
from the Sovereign functions, strictly understood, (alone) qualify for exemption,
not the welfare activities or economic adventures undertaken by government or
statutory bodies. Even in departments discharging sovereign functions, if there
are units which are industries and they are substantially severable, then they can
be considered to definition of ‘industry’ under Section 2(j) come within the

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Applying the triple test formulae as laid down by the Supreme Court in Bangalore
Water Supply’s case, hospitals, educational institutions, clubs, co- operative
societies are prima facie “industries” as they are the : (i) systematic activities; (i)
carried on with the co-operation between the employer and employees; (i) to
satisfy the human wants and wishes.
Dominant nature test: Where a complex of activities, some of which qualify for
exemption, others Not, involve employees on the total undertaking some of
whom are not workmen or Some departments are not productive of goods and
services if isolated, even then the Predominant nature of the services and the
integrated nature of the departments will be true test, the whole undertaking will
be “industry” although those who are not Workmen by definition may not benefit
by status.
Exception: A restricted category of professions, clubs, co-operatives and even
gurukulas and little research labs, may qualify for exemption if simple ventures,
substantially and, going by the dominant nature criterion substantively, no
employees are entertained but in minimal matters, marginal employees are hired
without destroying the non-employee character of the unit. If in pious or altruistic
mission, many employ themselves, free or for small honorarium or like return,
mainly drawn by sharing in the purpose or cause, such as lawyers volunteering to-
run a free legal services, clinic or doctors serving in their spare hours in a free
medical centre of ashramites working a the bidding of the holiness, divinity or like
central personality, and the services ae supplied free or at nominal cost and-those
who serve are not engaged for remuneration or on the .basis of ‘master and
servant relationship, then, the institution is not an industry even if stray servants,
manual or technical are hired. Such elementary or like undertakings alone are
exempt not other generosity, compassion, developmental passion or project.
Sovereign functions, strictly understood, (alone) qualify for exemption, not the
welfare activities or economic adventures undertaken by Government or statutory
bodies. Even in departments discharging sovereign functions, if there are units
which are industries and they are substantially severable, then they can be
considered to come within Section It was further observed that : “Undertaking
must suffer a Contextual and associational shrinkage as explained in D.N. Banerjee

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v, P-R. Mukherjee 1 , so also, service calling and the like. This yields to the
inference that all organised activities possessing the triple elements
abovementioned, although not trade or business, may still be industry provided
the nature of the activity.,, viz. The employer- employee basis, bears resemblance
to what is found in, trade or business. This takes into the fold of “industry”
undertaking, callings and services, adventures analogous to the carrying on of
trade or business. All features other than the methodology of carrying on the
activity, viz., non organizing the cooperation between employer and employee,
may be dissimilar. It does not matter if on the employment terms there is
analogy”
The Supreme Court in Management of Safdarjung Hospital, Delhi v. Kuldip Singh
counter to the principles enunciated in Bangalore Water Supply V. A. Rajappa case
and overrule its decision.

Whether Municipal corporation can be regarded as an industry

This question was decided by the court in D.N. Banerjee v. P.R. Mukherjee. In this
case the Budge Municipality dismissed two of its employees, Mr. P.C. Mitra, a
Head clerk and Mr. P.N. Ghose a Sanitary Inspector on charges for negligence,
insubordination and indiscipline. The Municipal Workers Union of which the
dismissed employees were members questioned the propriety of the dismissal
and the matter was referred to the Industrial Tribunal. The Tribunal directed
reinstatement and the award was challenged by the Municipality on the ground
that its duties being connected with the local self-government it was not an
industry and the dispute was not an industrial dispute and therefore reference of
the dispute to the tribunal was bad in law.
The Supreme Court observed that in the ordinary or non-technical sense industry
or business means an undertaking where capital and labour co-operate with each
other for the purpose of producing wealth in he shape of goods, tools etc. And for
making profits. In the opinion of the Court every aspect of activity in which the
relationship of master and servant or employer and employees exists or arises
does not become an industry It was further observed that ‘undertaking’ in the
1

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first part and industrial occupation or avocation in the second part of Section 2(j)
obviously mean much more than what is ordinarily understood by trade or
business. The definition was apparently intended to include within its scope what
might not strictly be called a trade or business. Neither investment of capital nor
profit making motive is essential to constitute an industry as they are generally,
necessary in a business, A public utility service such as railways, telephones, and
the supply of power, light or water to the public may be carried on by private
companies or business corporations and if these public utility services are carried
on by local bodies like a Municipality they do not cease to be an industry, for the
reasons stated above Municipal Corporation was held to be an industry.

In Permanand v. Nagar Palika, Dehradun and others the Supreme Court held that
the activity of a Nagar Palika in any of its department except sovereign functions like
those dealing with levy of house tax etc, falls within the definition of industry in U.P.
Industrial Disputes Act, 1947.
Whether hospital is an industry: The question whether hospital is an industry or
not has come for determination by the Supreme Court on a number of occasions and
the uncertainty has been allowed to persist because of conflicting judicial decisions
right from Hospital Mazdoor Sabha case to the Bangalore Water Supply v. A.
Rajappa.

In State of Bombay v. Hospital Mazdoor Sabha case, the Hospital MazdoorSabha

was a registered Trade Union of the employees of hospitals in the State of
Bombay, The services of two of its members were terminated by way of
retrenchment’ by the Government and the Union claimed their reinstatement
through a writ petition. It was urged by the State that the writ application was
misconceived because hospitals did not constitute an industry. The group of
hospitals were run by the State for giving medical relief to citizens and imparting
medical education.

The Supreme Court held the group of hospitals to be industry and observed as
follows

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1) The State is carrying on an ‘undertaking’ within Section 2(j) when it runs a
group of hospitals for purpose of giving medical relief to the citizens and for
helping to impart medical education.
2)An activity systematically or habitually undertaken for the production or
distribution of goods or for the rendering of material services to the community at
large or a part of such community with the help of employees is an undertaking.
3)It is the character of the activity in question which attracts the provisions of
Section 2(j), who conducts the activity and whether it is conducted for profit or
not make a material difference.
4)The conventional meaning attributed to the words, ‘trade and business’ has lost
some of its validity for the purposes of industrial adjudication...it would be
erroneous to attach undue importance to attributes associated with business or
trade in the popular mind in days gone by. Hospital run by the Government as a
part of its function is not an industry
Hospitals run by the State of Orissa are places where persons can get treated. they
are run as departments of Government. The mere fact that payment is accepted in
respect of some beds cannot lead to the inference that the hospitals are run as a
business in e commercial way. Primarily. the hospitals are meant as free service by
the Government to the patients without any profit motive". But in view of the
decision of the Supreme Court in Bangalore Water Supply v. A. Rajappa Dhanrajgiri
Hospital case has been overruled and all hospitals fulfilling the test laid down in
Bangalore Water Supply case will be industry.
Thus on an analysis of the entire case law up to Bangalore Water Supply case on
the subject it can be said that such hospitals as are run by the Government as part
of its sovereign functions with the sole object of rendering free service o the
patients are not industry. But all other hospitals, both public and private; whether
charitable or commercial would be industry if they fulfil the triple test laid down in
Bangalore Water Supply v. A. Rajappa

Whether University and Educational Institutions:

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In University of Delhi v. Ram Nath, the respondent Mr. Ram Nath was employed
as driver by University College for women. Mr. Asgar Mashih was initially
employed as driver by Delhi University but was later on transferred to the
University College for women in 1949. The University of Delhi found that running
the busess for transporting the girl students of the women's college has resulted
in loss. Therefore it decided to discontinue that facility and consequently the
services of the above two drivers were terminated.
The order of termination was challenged on the ground that the drivers were
workmen and the termination of their services amounted to retrenchment. They
demanded payment of retrenchment compensation under Section 25-F of the Act
by filing petitions before the Industrial Tribunal. The Tribunal decided the matter
in favour of the drivers and hence the University of Delhi challenged the validity of
the award on the ground that activity carried on by the University is not industry.
It was held by the Supreme Court that the work of imparting education is more a
mission and a vocation than profession or trade or business and therefore
University is not an industry. But this case has been overruled by the Supreme
Court in Bangalore Water Supply case and in view of the triple test laid down in
Bangalore Water Supply case even a University would be an industry although
such of its employees as are not workmen within the meaning of Section 2(s) of
the Act, may not get the desired benefits to which a workman in an industry may
be entitled to.

In Brahma Samaj Education Society v. West Bengal College Employees

Association, the society owned two colleges. A dispute arose between the society
and non-teaching staff of the colleges. It was pleaded that the society was purely
an educational institution and not an industry because there was no production of
wealth with the co-operation of labour and capital as is necessary to constitute an
industry The Calcutta High Court observed that our conception of industry has not
been static but has been changing with the passage of time. An undertaking which
depends on the intelligence or capacity of an individual does not become an
industry simply because it has a large establishment. There may be an educational
institution to which pupils go because of the excellence of the teachers; such
institutions are not industry. On the other hand, there may be an institution which
is so organized that it is not dependent upon the intellectual skill of any individual,

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but is an organization where a number of individuals join together to render
services which might even have a profit motive Many technical institutions are run
on these lines. When again we find these institutions also do business by
manufacturing things or selling things and thereby making a profit they certainly
come under heading of “industry”. These being it is clear that it will be a question
of evidence as to whether a particular institution can be said to be an industry or
not.

In Osmania University v. Industrial Tribunal Hyderabad, a dispute having arisen

between the Osmania University and its employees, the High Court of Andhra
Pradesh, after closely examining the Constitution of the University, held the
dispute not to be in connection with an industry. The correct test, for ascertaining
whether the particular dispute is between the capital and labour, is whether they
are engaged in co- operation, or whether the dispute has arisen inactivities
connected directly with, or attendant upon, the production or distribution of
wealth.

In Ahmedabad Textile Industry's Research Association v. State of Bombay an

association was formed for founding a scientific research institute. The institute
was to carry on research in connection with the textile and other allied trades to
increase efficiency. The Supreme Court held that "though the association was
established for the purpose of research, its main object was the benefit of the
members of the association, the association is organised, and arranged in the
manner in which trade or business is generally organised,; it postulates
cooperation between employers and employees; moreover the personnel who
carry on the research have no right in the result of the research. For these reasons
the association was held to be "an industry" But a society which is established
with the object of catering to the intellectual as distinguished from material needs
of men by promoting general knowledge of the country by conducting research
and publishing various journals and books is not an industry. Even though it
publishes books for sale in market, when it has no press of its own the society
cannot be termed even an 'undertaking' for selling of its publication was only an
ancillary activity and the employees were engaged in rendering clerical assistance

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in this matter just as the employees of a solicitor'firm help the solicitors in giving
advice and service.
Since Delhi University v. Ram Nath has been overruled by the Supreme Court in
Bangalore Water Supply v. A. Rajappa the present position is that the educational
institutions including the university are industry in a limited sense. Now those
employees of educational institutions who are covered by the definition of
workman under Section 2(s) of the Industrial Disputes Act, 1947 will be treated as
workman of an industry Whether Club is an industry: fulfill the triple test laid
down in Bangalore 'Water Supply v A. Rajappa. The Cricket Club of India case and
Madras Gymkhana Club case (discussed below) which were the two leading cases,
on-
Clubs or self-service institutions or non-proprietary member's club will be industry
provided they the point so far have been overruled by Bangalore Water Supply
case.

In Cricket Club of India v Bombay Labour Union the question was whether the
Cricket Club of India, Bombay which was a member's club and not a proprietary
club, although it was incorporated as a company under the Companies Act was an
industry or not. The club had membership of about 4800 and was employing 397
employees. It was held that the club was a self service institution and not an
industry and it was wrong to equate the catering facilities provided by the club to
its members or their guests (members paying for that), with a hotel. The catering
facility also was in the nature of self service by the club to its members. This case
has now been overruled,
Madras Gymkhana Club Employees' Union v. Management; is another case on
this point. This was a member's club and not a proprietary club with a
membership of about 1200. Its object was to provide a venue for sports and
games and facilities for recreation and entertainment. It was running a catering
department which provided food and refreshment not only generally but also on
special occasion. It was held that the club was a member's self-serving institution
and not an industry. No doubt the material needs or wants of a section of the
community were catered but that was not enough as it was not done as part of
trade or business or as an undertaking analogous to trade or business. This case

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has also been overruled. Now it is not necessary that the activity should be a
trade or business or analogous to trade or business It may therefore, be submitted
that both Cricket Club of India and Madras Gymkhana Club would now be an
industry because they fulfill the triple test laid down in Bangalore Water Supply
case. Both are systematically organized with the co-operation of employer and
employee for distribution of service to satisfy human wishes.

Whether Solicitor’s Firm or Lawyer’s Office are industries:

In N.N.U.C. Employees v. Industrial Tribunal; the question was whether a

solicitor’s firm is an industry or not. It was held hat a solicitor’s firm carrying on
work of an attorney is not an industry, although specifically considered it is
organized as an industrial concern. There are different categories of servants
employed by firm, each category being assigned by separate duties and functions.
But the service rendered by a firm, each category being assigned separate duties
or functions. But the service rendered by a solicitor functioning either individually
or working together with parties is service which is essentially individual; it
depends upon the professional equipments, knowledge and efficiency of the
solicitor concerned. Subsidiary work which is purely incidental type and which is
intended to assist the solicitor in doing his job has no direct relation to the
professional service ultimately rendered by the solicitor. The work of his staff has
no direct or essential nexus or connection with the advice which it is the duty of
the solicitor to give to his client. There is, no doubt, a kind of cooperation between
the solicitor and his employees, but that cooperation has no direct or immediate
relation to the professional service which the solicitor renders to his client. This
case has been overruled again in Bangalore Water Supply case and now a
solicitor’s firm employing persons to help in catering to the needs of his client is
an industry.

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Amended definition of Industry .-Industry means any systematic activity carried
on by co-operation between an employer and his workmen (whether such
workmen are employed by such employer directly or by or through any agency,
including a contract) 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), whether or not,-

i) any capital has been invested for the purpose of carrying on such activity; Or ii)
such activity is carried on with a motive to make any gain or profit, and includes-
(a) any activity of the Dock Labour Board established under Section 5-A of the
Dock
Workers (Regulation of Employment) Act, 1948;
(b) any activity relating to the promotion of sales or business or both
carried on by an establishment,

but does not include-

(1) any agricultural operation except where such “agricultural operation is carried
on in an integrated manner with any other activity (being any such activity as is
referred to in the foregoing provisions of this clause) and such other activity is the
predominant one. Explanation.-For the purposes of this sub-clause “agricultural
operation’ does not include any activity carried on in a plantation as defined in
clause (f) of Section 2 of the Plantation Labour Act, 1951; or

(2) hospitals or dispensaries; or

(3) educational, scientific, research or training institutions; or

(4) institutions owned or managed by organisation wholly or substantially engaged

in any charitable, social or philanthropic service; or

(5) khadi or village industries; or

(6) any activity of the Government relatable to the sovereign functions of the
Government including al the activities carried on by the departments of the

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 Central Government dealing with defence research, atomic energy and space;
or

(7) any domestic service; or

(8) any activity, being a profession practised by an individual or body of individuals,

if the number of persons employed by the individual or body of individuals in
relation to such profession is less than ten; or
(9) any activity, being an activity carried on by a co-operative society or a club or
any other like body of individuals, if the number of persons employed by the
co-operative society, club or other like body of individuals also in relation to
such activity is less than ten.
The Industrial Disputes (Amendment) Act, 1982 enacts altogether a new definition
of Industry.
This amended definition has not been enforced till now It nullifies the effect of
many judicial decisions and attempts to clarify the conflicting views arising out of
different interpretations of the word ‘industry adopted by the Supreme Court in
various cases. On account of conflicting judicial decisions it had become difficult to
understand the meaning of the word industry. The amended definition to a great
extent incorporates the views of the Supreme Court expressed in Bangalore Water
Supply v. A. Rajappa.
Definition of industry in Industrial Relations code 2020 is as follows:
Section 2(p) “industry” means any systematic activity carried on by co-operation
between an employer and worker (whether such worker is 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), whether or not,—

(i) Any capital has been invested for the purpose of carrying on such
activity; or
(ii) Such activity is carried on with a motive to make any gain or profit, But
does not include —

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 (i) Institutions owned or managed by organisations wholly or substantially
engaged in any charitable, social or philanthropic service;Or
(ii) Any activity of the appropriate Government relatable to the sovereign
functions of the appropriate Government including all the activities
carried on by the departments of the Central Government dealing with
defence research, atomic energy and space; or
(iii) Any domestic service; or
(iv) Any other activity as may be notified by the Central Government;

Strike And lock-out

In the struggle between capital and labour as the weapon of strike is available to
labour for enforcing their industrial demands, So is the weapon of a coercive
process the lock-out available to the employer to persuade by employees to See
his point of view and to accept his demands. But the cessation stoppage of work
whether by the employees or by the employer is detrimental to the production
and economy and the well-being of the society or as a whole.
Strike and lock-out cannot be utilised to cause hardship to the society at large. It is
for this reason that the Industrial Disputes Act, 1947 while not denying the right of
workmen to strike has tried to regulate it along with the right of employer to lock-
out.

The Industrial Disputes Act, 1947, defines “Strike” and “Lock-Out” as follows-

(A) “STRIKE” [Section 2(q)]

Section 2(q) of the Act defines "strike" as follows.- "Strike means a cessation of work
by a body of persons employed in any industry, acting in combination or a concerted
refusal, or a refusal under a common understanding, of any number of persons who
are or have been so employed to continue to work or to accept employment.'
Essentials of strike Following are the essentials of strike :-

(i) Cessation of work by a body of persons employed in any industry.

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 (ii) Cessation of work is an act in combination by the persons employed in
any industry.

(i)Cessation of work by a body of persons employed in any industry: Cessation of

work is the essential element of strike. Cessation of work means actual stoppage
of work for any period of time, The stoppage of work even for half an hour is
stoppage of work to fall within the definition of strike if the other requirement of
the definition is fulfilled.

In Buckingham and Carnatic Company Ltd. V. Their Workmen, the management

did not comply with the workmen’s demand of declaring a half day holiday on the
occasion of solar eclipse. As a result, the workmen struckwork for four to five
hours. As it was a case of complete cessation of work and the workmen were
acting in combination and their refusal to go back to work was concerted,
therefore this cessation of work was held to be within the definition of strike.”
(ii)Cessation of work is an act in combination by the persons employed in any
industry
Another essential ingredient of strike is this that stoppage of work must be with a
common intention of the workmen and that too in defiance of the authority of
employers. The Supreme Court in Buckingham and Carnatic Co. Ltd. V. Their
Workmen, held as follows:
“If a number of employees stay away from work in pursuance of an understanding
they have previously come to, there would be a strike; but if they keep away
because all of them happen to have been suddenly taken ill by a wave of fever of
dysentery for instance there would be no strike.”

In Standard Vaccum Oil Co.’s case , to celebrate “May day”, the workmen wanted
the management to declare first May a holiday. On refusal by the management to
declare first of May as a holiday, the workmen applied for leave en masse by
putting in individual leave application. In this case, as the conduct of the workmen
was not in defiance of authority of management, the stoppage of work was not
held to be a strike. On the contrary, if the management rejects the individual

17
applications en masse put in by the workmen, and the workmen do not report to
work, then this act of the workmen amounts to strike.”
Article 19(1)(A) of the Indian Constitution gives to the citizens of India the right to
freedom of speech and expression”. Freedom of speech and expression means
that right to express one’s own conviction and opinion freely by words of mouth,
writing, printing, pictures or any mode. This is an important right for a worker as
due to this fundamental right, he may express his views and against the inhuman
treatment given to him by his employer as well as against any other form of his
victimisation by his employer or against any other unfair labour practice followed
by his employer. In Kameshwar Singh v State of Bihar , it was held that:
“Demonstration and picketing are visible manifestation of one’s idea and in effect
a form of speech and expression.” However, to enjoy the freedom under Article
19(1)(A) the demonstration or picketing must not be violent and disorderly. In Raj
Narain v. State of U.P., it was held that “Picketing which does not go beyond the
limit of persuasion or inducement and which does not strain others from doing
what they please would be saved under the Article. Reasonable restriction may be
imposed on the fundamental right to freedom of speech and expression on the
grounds mentioned under clause (2) of Article 19. However, in All India Bank
Employees’ Association v. National Industrial Tribunal, it was held that right to
goppsstrike is not included within ambit of the freedom of speech and expression.
Article19(1)(c) guarantees the citizens of India “right to form association or
unions”. However, clause (4) of Article 19 empowers the State to impose
reasonable restrictions on the fundamental right to form association or unions on
the grounds of sovereignty, integrity, of India, public order or morality. Right to
form association or union includes the fundamental right not to be a member or
continue to be a member of an association or union.

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 (B) “LOCK-OUT” Section [2(1)]
According to Section 2(1), “lock-out” means the temporary closing of place of
employment, or the suspension of work, or the refusal by an employer to
continue to employ any number of persons employed by him.

Lock-out under Section 2(1) means:

(i) The closing of place of employment; or

The suspension of work; or
(ii) The refusal by an employer to continue to employ any number of
persons employed by him.
Coercion, retaliation by the employer an essential element of Lock-out: It is a
settled principle of law, that mere suspension of work unless it is accompanied by
an intention on the part of an employer as a retaliation will not amount to lock-
out.
If an employer shuts down his place of business as a means of reprisal or as an
instrument of coercion or as a mode of exerting pressure on the employees, or
generally speaking, when his act is what may be called an act of belligerency,
there would be lock-out. If, on the other hand, he shuts down his work because he
cannot, for instance, get the raw material or the fuel or the power necessary to
carry on his undertaking or because he is unable sell the goods he had made or
because his credit is exhausted or because he is losing money, that would not be
lock-out.2
Prohibition of Strike and Lock-out
The cessation or stoppage of work whether by the employees or by the employer
is detrimental to the production and economy and to the well-being of the society
as a whole. It is for this reason the Industrial Disputes Act while not denying the
right of workmen to strike has tried to regulate it along with the right of the
employer to lock-out under Chapter V from Section 22 to Section 25.
Section 22 provides for specific prohibitions of strike and lock-out in public utility
service. Whereas Section 23 provides for general prohibition of that apply to strike
2

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and lock-out in all the industrial establishments whether they are public utility
services or non-public utility services
According to Section 2(n), “public utility service” means- (i) any railway service or
any transport service for the carriage of passengers or goods by air; (i) any service
in, or in connection with the working of, any major port of dock; (ii) any section of
an industrial establishment, on the working of which the safety of the
establishment or the workmen employed therein depends; (iv) any postal,
telegraph or telephone service; (v) any industry which supplies power, light or
water to the public; (vi) any system of public conservancy or sanitation; (vii) any
industry specified in the first Schedule which the appropriate Government may, if
satisfied that public emergency or public interest o requires, by notification in the
Official Gazette, declare to be a public utility service for the purposes of the Act,
for such period as may be specified in the notification Provided that the period so
specified shall not, in the first instance, exceed six months but may, by a like
notification, be extended from time to time, by any period not exceeding six
months, at anyone time, if in the opinion of the appropriate Government, public
emergency or public interest equires such extension.

A) Specific prohibition of strikes and lock-outs in public utility services (Section

22)
1.Specific prohibition of strikes in public utility services [Section 22(1)] According
to Section 22(1), no person employed in public utility service shall go on strike in
breach of contract-
(a) without giving to the employer six weeks notice before striking;

(b) within fourteen days of giving such notice; or

(c) before the expiry of the date of strike specified in six weeks notice; or

(d) during the pendency of any conciliation proceedings before a conciliation

officer and seven days after the conclusion of such Proceedings.
The six weeks of notice of strike is given by such number of persons to such
person or persons and in such manner as may be prescribed.

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A strike in a public utility service commenced or declared in contravention of
Section 22(1) is an illegal strike. For example, in H.M.T. Ltd. V. H.M.T. Head Office
Employees Association, the strike was declared by the workmen in ITL (Indian
Telephone Industries), H.A.L. (Hindustan Aeronautics Limited), H.MT (Hindustan
Machine Tools), without giving any notice to the employer as required under
Section 22 [1(a)] of the Act. The Supreme Court in this case held this strike illegal
as it was declared without giving notice to the employer under Section 22 [1(a)].
Because all the three industries, ie., I.T.I, H.M.T. and H.A.L. are public utility
services.
2. Prohibition of lock-out in public utility service [Section 22(2)] :According to
Section 22(2), no employer carrying on any public utility service shall lock-out any
of his workmen-
(a) without giving the workmen six weeks notice before locking-out; or (b) within
fourteen days of giving such notice; or

(c) before the expiry of the date of lock-out specified in six weeks notice; or

(d) during the pendency of any conciliation proceedings before a conciliation

officer and seven days after the conclusion of such proceedings.

The notice of lock-out is given in such manner as may be prescribed.

3. Report of notice of strike or lock-out to the appropriate authority [Section
22(6)] :If on any day an employer receives from any person employed by him any
notice of strike, he must report to the appropriate Government within five days of
receiving such notice. Similarly, if an employer gives a notice of lock-out to any
person employed by him, he must give report of the notice of lock-out given by
him to the appropriate Government within five days of such notice. The employer
must gave report of number of notice received or given. Such report may also be
given to such authority as may be prescribed by appropriate Government.
4.Notice of lock-out or strike in public utility service is not necessary under certain
conditions : According to Section 22(8), no notice of strike under Section 22(1)is
necessary where there is already in existence lock-out in a public utility. Similarly
no notice of lock-out under Section 22(2) is necessary where there is already in
existence a strike.

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(B) General prohibition of strikes and lock-outs in any industrial establishment
(Section 23)

Section 23 provides for general prohibition of strikes and lock-outs in Public utility
services as well as in non-public utility services.
Section 23 provides that No workman who is employed in any industrial
establishment shall go on strike in breach of contract and no employer of any such
workman shall declare a lock-out in the following situations :
(a)during the pendency of conciliation proceedings before a Board and seven days
after the conclusion of such proceedings;
(b) during the pendency of proceedings before a Labour Court, Tribunal or
National Tribunal and two months after the conclusion of such proceedings;
(bb) during the pendency of arbitration proceedings before a arbitrator and two
months after the conclusion of such proceedings, where notification has been issued
under Section d 10-A (3-A); or
(c)during any period in which a settlement or award is in operation in respect of
any of the matters covered by the settlement or award.

3. Illegal strikes and lock-outs (Section 24):

A strike or lock-out is illegal if it is :

(I) declared without prior notice in public utility service;

(II)declared during the pendency of any proceedings before the authorities;

(III) continued in contravention of an order made under Section 10(3) under sub-
section 4-A of Section 10-A.
(I)Strike or lock-out is illegal if it is declared without prior notice in public utility
service :According to sub-clause (i) of Section 24(1), strike is illegal, if it
commenced in a public utility service without prior notice as required under a
Section 22(1) of the Act,

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(II)Strike or lock-out is illegal if it is declared during the pendency of any
proceedings before the authorities under the Industrial Disputes Act, 1947 :
According to sub clause (i) of Section 24(1) a strike or lock out is illegal if it is
declared in any industrial establishment in contravention of Section 23
Section 24(1)(i) states that a strike or lock-out is illegal if it is commenced or
declared in any industrial establishment in contravention of Section- 23:

(a) During the pendency of conciliation proceedings before a Board and seven
days after the conclusion of such proceedings;
(b) During the pendency of proceedings before a Labour Court, Tribunal or
National Tribunal and two months after the conclusion of such proceedings.
(c) During pendency of arbitration proceedings before an arbitrator and two
months after the conclusion of such proceedings, where a notification has
been issued under sub-section (3A) of Section 10-A of the Act.

Continuation of strike and lock-out is illegal if it is in contravention of an order

made under Section 10(3) under sub-section (4-A) of Section 10.
According to Section 24(1)(ii), a strike or lock-out is illegal if it is continued in
contravention of an order made under Section 10(3) or sub-section (4-A) of
Section 10-A.
Section 10(3) provides as: “Where an industrial dispute has been referred to a
Board, Labour Court, Tribunal or National Tribunal under Section 10, the
appropriate Government may, by order, prohibit the continuance of any strike or
lock-out in connection with such dispute which may be in existence on the date of
the reference.”
Sub-section (4-A) of Section 10-A reads as :“Where an industrial dispute has been
referred to arbitration and a notification has been issued under sub-section (3-A),
the appropriate Government may, by order, prohibit the continuance of any strike
or lock-out in connection with such dispute which may be in existence on the date
of reference.”

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4. Conditions in which a strike or lock-out is not deemed to be illegal

(I) A strike or lock-out already commenced before the reference of disputes

under Section 10
Section 24(2) provides that where a strike or lock-out in pursuance of an industrial
dispute has already been commenced and is in existence at the time of the
reference of the dispute to a Board, an arbitrator, a Labour Court, Tribunal or
National Tribunal. The continuance of such strike or lock-out shall not be deemed
to be illegal, if such strike or lock-out was not at its Commencement in
contravention of the provisions of the Act or the continuance thereof was not
prohibited under sub-section (3) of Section 10 or sub-section (4-A) of Section 10-
A.
(II) A strike declared in consequence of illegal lock-out and a lock-out declared in
consequence of an illegal strike [Section 24(3)] :
According to Section 24(3), a lock-out declared in consequence of an illegal strike
is not deemed to be illegal. Similarly, Section 24(3) provides that all strike declared
in consequence of illegal lock-out shall not be deemed to be illegal.

5. Protection of person refusing to take part or to continue to take part in an

illegal strike or lock-out (Section 35)
According to Section 35(1), no person refusing to take part or to continue to take
part in any strike or lock-out which is illegal under the Act, by reason of such
refusal or by reason of any action taken by him under Sec. 35, be subject to
expulsion from any trade union or society, or to any fine or penalty, or to
deprivation of any right or benefit to which he or his legal representative would
otherwise be entitled, or be liable to be placed in any respect, either directly or
indirectly, under any disability or at any disadvantage as compared with other
members of the union or society, anything to the contrary in the rules of a trade
union or society notwithstanding.

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6. Penalties for illegal strikes and lock-outs (Sections 26-28)
Different penalties for different offences committed in connection with the illegal
strike and lockout have been specified under Chapter VI from Section 26 to
Section 28.

(1) Penalty for commencing illegal strikes and lock-outs (Section 26)
(i) According to Section 26(1), any workman who commences, continues or
otherwise acts in furtherance of a strike which is illegal under the Act, is
punishable with: (a) imprisonment for a term which may extend to one months

(b) with fine which may extend to fifty rupees; or

(c) with both

(ii) According to Section 26(2), any employer who commences continues, or

otherwise acts in furtherance of under the Act, is punishable with: a lock-out
which is illegal (a) imprisonment for a term which may extend to one month or

(b) with fine which may extend to one thousand rupees; or

(c) with both.

(II) Penalty for instigation of illegal strikes and lock-out. (Section 27)
According to Section 27, any person who instigates or incites others to take part
in, or otherwise acts in furtherance of, a strike or lock-out which is illegal under
the Act, is punishable with:

(a) imprisonment for a term which may extend to six months; or

(b) with fine which may extend to one thousand rupees; or

(c) with both.

(III) Penalty for giving financial aid to illegal strike and lock-out (Section28)
Section 25 provides that no person shall knowingly expend or apply any money in
direct furtherance or support of any illegal strike or lock-out. According to Section

25
28, any person who knowingly expends or applies any money in direct furtherance
or support of any illegal strike or lock-out is punishable:

(a) with imprisonment for a term which may extend to six months;or

(b) with fine which may extend to one thousand rupees; or

(c) with both.

Conclusion
The concepts of industry, strike, and lockout are central to understanding the
dynamics of labour relations in any economy. Industries, as economic entities,
provide the framework within which labour and management interact,
collaborate, and sometimes conflict. Strikes represent a powerful tool for workers
to express their demands, assert their rights, and improve working conditions. On
the other hand, lockouts serve as a counterbalance, enabling employers to safeguard
their interests in times of labour disputes. While both strikes and lockouts can
disrupt economic activities, they are vital for maintaining a balance of power
between labour and management. Effective legal frameworks, such as the Industrial
Disputes Act, ensure that these actions are regulated to minimize economic damage
and encourage dispute resolution.
BANGALORE WATER SUPPLY & SEWERAGE BOARD VS R. RAJAPPA

Facts of Case :
1)A Rajappa and others, the respondents, were the employees of the Bangalore
Water Supply and Sewerage Board. There arose a labour dispute between the
employees and the board which could not be easily and peacefully come to a
solution.
2)Therefore, a fine was imposed on all the employees of the appellant board citing
misconduct. The fine though legal was heavy and of an unreasonable amount and
diverse sums had already been recovered from the employee, for which, the
matter went to the labour court.

26
3) As a result, they lodged Claims Application No. 5/72 within the ambit of
Section 33C (2) of the Industrial Disputes Act, stating that perhaps the penalty had
been inflicted in breach of natural justice .
4) The appellant Board filed a provisional objection with the Labour Court,
claiming that the Board, as a statutory body undertaking what is in essence a regal
function by providing the basic amenities to the citizens, is not an industry within
the meaning of the expression under section 2(j) of the Industrial Disputes Act,
and consequently the employees were not workmen and the Labour Court had no
jurisdiction to decide the claim of the workmen
5)This objection being over-ruled, the appellant Board filed two Writ `Petitions
before the Karnataka High Court at Bangalore. The Division Bench of that High
Court dismissed the petitions and held that the appellant Board is “industry”
within the meaning `of the expression under section 2(i) of the Industrial, Disputes
Act, 1947.
6)The appeals by Special Leave, considering “the chances of confusion from the
crop of cases in an area where the common man has to understand and apply the
law and the desirability that there should be, comprehensive, clear and conclusive
declaration as to what is an industry under the Industrial Disputes Act as it stands”
were placed for consideration by a larger Bench.

Issues Involved :
1.)The issue in the case was that whether Bangalore Water Supply and Sewerage
Board will fall under the definition of `Industry’ and in fact, particularly the issue
was what is an ‘Industry’ under Section 2(j) of the Industrial Dispute Act,1947

2.)Is a statutory body performing sovereign functions covered under the definition
of ‘industry’?
3.)What is the correct interpretation of the term ‘industry’ under Section 2(j) of
the Industrial Disputes Act?
4.)Do organizations engaged in activities not necessarily profit-driven but
providing public services fall under the definition of ‘industry’?

27
Judgment
It held that the Bangalore Water Supply and Sewerage Board will fall under the
definition of the industry and by justifying this it gave an elaborating definition of
industry. The Supreme Court, in a monumental ruling, delivered a unanimous
judgment and clarified the scope of the term “industry” in the following ways:

1.)Broad Interpretation of Industry:

The court expanded the definition of “industry” under Section 2(j) of the Industrial
Disputes Act, 1947. It ruled that any organization engaged in systematic activity
involving cooperation between employers and employees, regardless of whether
it was profit-driven or engaged in public welfare, could be classified as an industry.
The court rejected the narrow interpretation that only profitdriven enterprises
could be considered industries.
2.)The Triple Test for Determining an Industry: The judgment introduced a “triple
test” to determine whether an entity qualifies as an “industry.” The test focused
on the following elements:
Systematic Activity: The organization must be engaged in a systematic activity with
continuity and organization.
Cooperation Between Employer and Employees: There must be a relationship of
cooperation between employers and employees to produce goods or provide
services.
Economic Nature of Activity: The activities must involve the production of material
goods or services, though the entity need not necessarily be profit-driven.

3.)Inclusions Under the Term ‘Industry’:

The court held that not only private enterprises but also public utility services,
charitable institutions, hospitals, educational institutions, and government
undertakings could be classified as “industries” if they satisfied the triple test.
The Supreme Court acknowledged that institutions like hospitals and educational
institutions do not operate for profit but clarified that this does not exempt them

28
from being classified as industries, given that they systematically organize labor
and produce services for the public.
4.)Exclusions from the Definition: The court clarified that certain categories of
activities are not industries, such as:
Sovereign Functions: Activities connected to essential functions of the state, such
as defense, police, administration of justice, and legislative functions, were
excluded from the definition of industry.
Purely Spiritual or Religious Institutions: Entities focused on spiritual, religious, or
charitable activities without any organized labour relations were excluded.
Casual Work: Casual or irregular work that lacks systematic organization and does
not form part of an ongoing economic activity was also excluded.
5.)Applicability to the Bangalore Water Supply and Sewerage Board: The court
held that the Bangalore Water Supply and Sewerage Board, though a statutory
body, was engaged in systematic public utility work involving cooperation between
employers and employees, and thus, it fell within the definition of “industry.” The
employees of the board were entitled to the protections provided under the
Industrial Disputes Act, including the right to raise industrial disputes and access
remedies available under labor laws.

Bibliography
 Meenu Paul, Labour and Industrial Law, (Allahabad Law Agency, New Delhi, 9th

edi.,2014

 S.N. Misra , Labour &Industrial Laws, Central Law Publications, Allahabad, 29 th

edi.,2019
 https://indiankanoon.org/doc/1149369/

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