Supreme Court Justice Questions Validity of 2005 Bench Reference in Landmark 'Industry' Definition Case
Justice Dipankar Datta, serving on the nine-judge bench led by Chief Justice of India Surya Kant, has raised significant questions about the procedural correctness of a 2005 five-judge bench's decision to refer a crucial matter to a larger bench. The bench is currently examining the expansive definition of 'industry' established by the Supreme Court in its landmark 1978 Bangalore Water Supply judgment.
Justice Datta's Fundamental Questions
Justice Datta pointedly questioned the 2005 judgment, stating, "There is no deliberation in the 2005 judgment as to what compelling circumstances warranted reference to a larger bench. Moreover, was it correct on the part of the five-judge bench to delineate the ratio, that is how many judges in the 7-J bench were in majority of the judgment?"
He further emphasized a fundamental judicial principle: "Once a judgment is rendered by a bench, irrespective of the division, it is considered as the view of the entire bench. So, was it a valid reference to a larger bench?"
Complex Judicial History of the Case
The matter has traveled through multiple judicial levels over decades. Initially placed before a seven-judge bench, the issue was subsequently referred to the current nine-judge bench in 2016. During Tuesday's proceedings, Attorney General R Venkataramani acknowledged he might not support the reasoning provided by the 2005 five-judge bench but urged the court not to let this procedural question delay the substantive examination of the 'industry' definition.
"Let that not detain the nine-judge bench now from proceeding with the issue - correctness of 'industry' definition in the Bangalore Water Supply judgment of 1978," Venkataramani stated.
The Genesis: Bangalore Water Supply Case
The case originated from a 1972 dispute when the Bangalore Water Supply and Sewerage Board fined two employees for misconduct and deducted the amount from their salaries. The employees filed a petition under the Industrial Disputes Act for recovery of the deducted amount.
The board argued that as a statutory body providing essential amenities to citizens, it could not be categorized as an industry. However, both the Industrial Tribunal and the High Court sided with the employees. On appeal, the Supreme Court delivered its historic judgment on February 21, 1978, defining "industry" in an exceptionally expansive manner.
The 1978 definition had sweeping implications, bringing numerous entities under the industrial umbrella:
- Temples and religious institutions
- Universities and educational establishments
- Social forestry projects
- Hospitals and healthcare facilities
This broad interpretation meant workers across these diverse sectors became covered under the protective provisions of the Industrial Disputes Act.
Legislative Responses and Recent Developments
Finding the Supreme Court's expansive definition unacceptable, Parliament amended the definition of 'industry' in 1982. However, this amendment was never officially notified and thus never came into effect.
In a more recent development, Parliament enacted the Industrial Relations Code in 2020 with specific objectives:
- To consolidate and amend laws relating to trade unions
- To regulate conditions of employment in industrial establishments
- To establish procedures for investigation and settlement of industrial disputes
- To address related incidental matters
This code came into force on November 21, 2025, and has repealed the Industrial Disputes Act, marking a significant shift in India's industrial relations legal framework while the Supreme Court continues its examination of the foundational 'industry' definition that has shaped labor law for nearly five decades.
