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Case Number

Writ Petition No. 1367 of 1982

Attorney(S)

Sri J.P Cama.
For Respondents 2 and 3.— Sri R.S Kulkarni.

Judges

Sri M.L Pendse, J.

Acts

Sub-sec. (1) of S. 10 of the Industrial Disputes Act
S. 2(j) of the Industrial Disputes Act, 1947.
SOCIETIES REGISTRATION ACT

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The petitioners are a trust (the petitioner-trust) formed in 1958 and registered as a society under the Societies Registration Act. The trust's stated aims include religious, social and educational objects (establishing temples, dharma-shalas, educational institutions, promoting unity among Cutchi Visa Oswal Derawasi Jain community and raising funds by donations, subscriptions and contributions). The trust owned a large number of properties in Bombay and employed about 42 workmen in different functions (cashiers, clerks, watchmen, sweepers, pujaris, liftmen) to carry out duties at multiple locations (trust office, temples, "Atithi Griha", godowns, shops, marriage/meeting halls and a five-storey building with a godown).

The workmen formed a union and submitted demands regarding pay-scales and conditions of service. After the demands were not accepted, the Government of Maharashtra, invoking clause (d) of sub-section (1) of S.10 of the Industrial Disputes Act, referred the demands to the Industrial Tribunal, Bombay. The union's statement of claim alleged the trust operated on a commercial basis for rendering services (including letting buildings, godowns, shops and halls for hire/rent and running sanatorium rooms), earning profits (allegedly as high as Rs. 3 lakhs per year), and employing workmen to render those services. The trust denied being an "undertaking" or "industry" under S.2(j) of the Industrial Disputes Act, maintained its principal activity was religious, and asserted main income derived from donations rather than rents.

The Industrial Tribunal raised a preliminary issue: whether the petitioner-trust is an "industry" under the Act. After recording oral and documentary evidence, the Tribunal concluded the trust conducted activities with a significant element of economic adventure (including letting properties and charging for halls and services) and required employment of about 50 persons; it recorded the preliminary issue in favor of the workmen and declared Award Part I on 4 March 1982. The petitioners challenged Award Part I by filing this writ petition under Article 226.

Legal Issues Presented

Whether the petitioner-trust is an "undertaking" and therefore an "industry" within the meaning of S.2(j) of the Industrial Disputes Act, 1947 (i.e., whether its activities, including letting of properties and provision of services, amount to an economic or commercial undertaking).
Whether the High Court should exercise writ jurisdiction to interfere with an award made by the Industrial Tribunal on a determination of a preliminary issue (a preliminary objection to maintainability of the petition was raised).

Arguments of the Parties

Workmen / Union (as represented in pleadings and by Dr. Kulkarni)

The union's statement of claim contended that the trust's activities are organised on a commercial basis, rendering services for which charges are collected, and that the trust lets out buildings, godowns, shops, meeting halls and "Atithi Griha" for hire/rent, generating substantial profits.
Dr. Kulkarni, on behalf of the workmen, also raised a preliminary objection to the writ petition's maintainability: that the High Court should be reluctant to interfere with an award passed by determination of a preliminary issue and should be slow to entertain such petitions against interim orders of the Tribunal.

Petitioner-Trust (as represented by Sri Cama)

The petitioner-trust argued it was constituted for purely religious objects and that its managing committee members perform the functions with the assistance of a few workmen, so it should not be treated as an "undertaking" or "industry" under the Act.
The trust contended that properties let out were used to accommodate visiting Jains and only token rent was charged, so such activity did not amount to commercial exploitation.
Alternatively, Sri Cama submitted even if some activities were commercial, the predominant activity of the trust was religious and spiritual; principal income was said to be from donations and contributions, not from letting properties.
Sri Cama relied on Paras. 15 and 161 of the Supreme Court's judgment in Bangalore Water Supply and Sewerage Board v. A. Rajappa in support of the contention regarding the nature of an "industry."

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bangalore Water Supply and Sewerage Board v. A. Rajappa [1978 — I L.L.N. 376 and 657]	The opinion refers to Paras. 15 and 161 of this Supreme Court judgment, which were cited on matters concerning the definition and scope of an "industry" (how activities with economic or commercial character may fall within the statutory definition).	The petitioners' counsel invoked these passages in support of the argument that the trust's predominant activity was religious and therefore not an industry. The Court observed that the award under challenge had already set out the relevant passages from Rajappa and concluded that those passages supported the Tribunal's finding in favour of the workmen; the Court found no infirmity in the Tribunal's reliance on such authorities.

Court's Reasoning and Analysis

The Court addressed both the preliminary maintainability objection and the substantive question on merits.

On maintainability: Dr. Kulkarni urged that the High Court should be slow to interfere with interim orders and awards decided on preliminary issues. The Court declined to uphold this preliminary objection for two reasons expressly stated in the opinion: (1) the petition had been pending before the Court for over four years, and disposing it on a preliminary ground would waste time and work to the detriment of the workmen and give the employer a "second inning"; and (2) the Court had heard the petition on merits and concluded the petitioners' grievance was without substance.

On the substantive issue of whether the trust is an "industry" under S.2(j):

The Court examined the aims and objects of the trust and found they were not "purely religious in nature" because they also included objectives such as advancement and development of members' social and educational life and raising funds by donations and subscriptions.
The Court analysed the evidence (including annexure A to the statement of claim) showing that the trust employed about 42 workmen in diverse roles (cashiers, clerks, watchmen, sweepers, pujaris, liftmen) and across several premises (temples, "Atithi Griha", shops, godowns, halls, a five-storey building). The Court observed many duties performed by these employees (cleaning properties, providing food services, facility maintenance, etc.) had no nexus to purely religious activities and were commercial in nature.
The Court found documentary and oral evidence established that the trust had acquired and let out properties (godowns, shops, sanatorium rooms and halls) and charged for the use of such premises (e.g., for marriages and meetings). The letting of premises and provision of services to residents was treated as commercial activity requiring workmen to provide services for which charges were recovered.
Responding to the petitioners' contention that token rents or accommodation for community members could not amount to commercial exploitation, the Court explained that the relevant inquiry is whether the activities themselves amount to an industry, not whether monetary returns are large or primary; even nominal charges or community-oriented letting could nonetheless amount to an activity that falls within the statutory concept of an industry if it involves organised economic activity and the employment of workmen for commercial services.
The Court noted the petitioners' reliance on the Rajappa judgment (Paras. 15 and 161) but observed it was unnecessary to reproduce the passages because the Tribunal's award already set them out and they supported the workmen's claim; the Court found the Tribunal's conclusion that the trust carried on an economic adventure with significant commercial aspects to be justified by the evidence.

Holding and Implications

Holding: The writ petition is dismissed — the rule is discharged with costs; Award Part I of the Industrial Tribunal (holding that the petitioner-trust is an undertaking and an industry under S.2(j) of the Industrial Disputes Act) is upheld.

Implications:

Direct effect: The Industrial Tribunal's Part I award, which found the petitioner-trust to be an undertaking and an industry within the meaning of S.2(j), is sustained. The petitioners' challenge to that finding fails and costs are awarded against the petitioners.
Scope of precedent: The Court relied on the reasoning set out in the Tribunal's award and considered the cited Supreme Court authority (Bangalore Water Supply and Sewerage Board v. A. Rajappa) as supporting the Tribunal's conclusion. The opinion does not assert that it lays down any new legal principle beyond applying the existing tests and authorities to the facts of this case.

Note: This summary is strictly based on the text of the provided opinion. No information has been invented or inferred beyond what is contained in the opinion.

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Shri Cutchi Visa Oswal Derawasi Jain Mahajan v. Industrial Tribunal, Bombay (By B.D Borude, Presiding Officer), And Others

1. By this petition filed under Art. 226 of the constitution of India, the petitioners-employer are challenging the legality of award, Part I, declared by the Industrial Tribunal on 4 March 1982, holding that the employer-trust is an undertaking and an industry within the meaning of S. 2(j) of the Industrial Disputes Act, 1947. The facts giving rise to filing of the petition are as follows;

2. The petitioner-trust was formed in the year 1958 and was registered as a society under the Societies Registration Act. The aims and objects of the trust were to achieve unity amongst Cutchi Visa Oswal Derawasi Jain, to achieve development and progress to their religious, social and educational life and activities, to establish temples, dharma-shalas educational institutions, etc., to institute all acts and activities aimed for furthering fraternity and unity amongst Jains and to raise tunes by acceptance of donations, subscriptions, contribution, etc. The trust possesses large number of properties in Bombay and had employed about 42 workmen in different sections for carrying out various duties. The workmen employed by the trust formed a union and submitted the demands in respect of pay-scales and other conditions of service. The demands were not accepted and thereupon the union sought a reference and the Government of Maharashtra in exercise of powers conferred by Cl (d) of Sub-sec. (1) of S. 10 of the Industrial Disputes Act made reference to the Industrial Tribunal, Bombay, in respect of demands consisting of wages, dearness allowance and festival holidays.

3. The workmen's union filed the statement of claim submitting that the activities of the employer are well organised to render service on the commercial basis after collecting required charges from the people, who receive the services which are rendered with the help and co-operation of the workmen employed by them. It was further claimed that the employer carries on activities of giving on hire and rent the buildings, godowns, shops, meeting halls, marriage halls and other premises known as “Atithee Griha” (guest house). The workmen claimed that out of the above activities, the employer is making huge profits collecting high charges, rents, etc., and the profits are established at Rs. 3 lakhs in a year. The petitioner-trust filed the written statement, inter alia, claiming that the petitioner-trust is not an undertaking which is an industry under the Act as the principal activity is to render services to the public at large and the services rendered an purely religious in nature. The petitioners dented that the trust carries on commercial activities such as letting out the properties on hire or rent. The petitioners claim that the main income of the trust is from donations and not from the rent recovered from various properties.

4. On these pleadings, the Industrial Tribunal raised the preliminary issue as to whether the petitioner-trust is an industry as contemplated under the Act. After recording evidence, both oral and documentary, the Tribunal came to the conclusion that the trust has extensive properties which require employment of about 50 persons and the services rendered are not only Charitable in nature, but the trust is conducting business of rendering services to the people of the community and in response gets donations, offerings and other sources of income. The Tribunal came to the conclusion that the petitioner-trust is carrying out adventure which has significant aspect of economic adventure. On the strength of this finding the answer to the preliminary issue was recorded in favour of the workmen and award Part 1 was declared and that award is under challenge.

5. Dr. Kulkarni, learned counsel appearing on behalf of the workmen, raised preliminary objection to the maintainability of the petition submitting that this Court should not exercise writ jurisdiction to interfere with the award passed by determination of preliminary issue. The learned counsel urged that it is now well settled that High Court should be slow in entertaining the petition against interim orders passed by the Tribunal. I am not inclined to uphold the preliminary objection raised by Dr. Kulkarni for more than one reason. In the first instance, the petition is pending in this Court for last over four years and it will be waste of time and work to the detriment of the workmen if the petition is disposed of on the preliminary ground and the employer is permitted to have a second inning. Secondly, I have heard the petition on merits and I find that the grievance made by the petitioner-trust against the award Part 1 is without any substance.

6. Sri Cama, learned counsel appearing on behalf of the petitioners, submitted that the petitioner-trust was constituted with an object which is purely religious in nature. The learned counsel urged that the members of the managing committee carry out or perform the functions of the trust with the assistance of few workmen and in such case it would not be proper to hold that the petitioner-trust is an undertaking which can be described as an industry under the provisions of the Act. The submission of the learned counsel is not correct. The aims and objects of the trust are not purely religious in nature, but also include objects for advancement of members of the community. The perusal of the aims and objects of the trust clearly indicate that some of the objects, like achieving unity amongst the members of the community or development of social and educational life or to raise funds by acceptance of donations, subscriptions and contributions are not objects which are purely religious in nature, Equally, the claim that the functions of trust are performed by members of managing committee with the assistance of few workmen is not correct. The annexure A to the statement of claim filed by the workmen clearly indicates that about 42 workmen, like cashiers, clerks, watchmen, sweepers, pujaris, liftmen are engaged by the petitioner-trust for carrying out different duties at the trust office, at Bhat Bazar temple, at “Atithi Griha” situate, at Chinch Bunder, at Lal Badi and at Ghatkopar. The various duties performed by the watch-men have no bearing or have no nexus to the religious performance carried out in the temple of the trust. The cashier, sweeper, clerk and watchman are engaged purely for the activities which have no relation whatsoever with the religious activities. The evidence on record clearly indicates that the trust has purchased large number of properties, including godowns, shops and halls. The godowns and shops are let out on rent, while the hails are used fortheperformance of marriages and for holding meeting and for which charges are recovered. It has come on record in the evidence of the workmen that the properties owned by the trust consist of several floors and many of them are used as sanatoriums the trust have also constructed a five-storey building with a godown on the ground floor and these premises are let out for occupation. Sri Cama urged that these properties have been hired out to the jams who visit the city and only a token rent is charged and, therefore, it cannot be suggested that the properties are used for commercial advantages by the trust. The submission is not accurate, because the question is not whether commercial advantage is realised by the trust from these properties, but whether the activities of letting out of the properties amount to an industry. It is not in dispute that the workmen are engaged to clean the property and to provide facilities to the residents, like service of food, etc. These activities are clearly commercial in nature.

7. Sri Cama then submitted that the trust provides for spiritual benefits and not material benefits and, therefore, the petitioners could not be treated as an industry. The submission is that the petitioner-trust runs temple and the people come to visit the temple to secure spiritual benefit, and not material benefits and, therefore, the workmen like pujari is not giving any material advantage to the devotees so as to consider the petitioner-trust as industry. It is impossible to accede to the submission of the learned counsel., Whatever may be the aims and objects of the petitioner-trust, there is hardly any doubt that the petitioners are carrying out commercial activities by letting out godowns, halls, shops, etc. It is futile to suggest that the petitioners merely provide spiritual benefits and not material benefits. It has come on record that the pujari is engaged on a monthly salary and the trust accepts donations and offerings before the deity. The Pujari is engaged for giving service to the devotees and the services are not necessarily spiritual in nature.

8. Sri Cama than submitted that even assuming that some of the activities carried out by the petitioners are commercial in nature, still the predominant activity of the petitioners is religious and spiritual. In support of the submission it is claimed that the principal income received by the trust is from donations and contributions and not from letting out of the shops and godowns and sanatorium rooms. The question as to what activities are carried out by the petitioner-trust is not to be determined with reference to the monetary returns received by the petitioner. In case the petitioner-trust chooses to let out the property on a nominal rent, probably because the letting is done to the members of the community, then it is futile to compare letting amount with the donations and contributions to claim that the predominant activity is not commercial. As the petitioners have acquired large number of properties at several places in Bombay and are letting out the same and the workmen are employed to give services at those properties and which are not religious in nature, then it is futile to suggest that the petitioner-trust is not an undertaking which falls under the definition of an industry within the meaning of the Act. Sri Cama invited my attention to Paras. 15 and 161 of the judgment of the Supreme Court in Bangalore Water Supply and Sewerage Board v. A. Rajappa [1978—I L.L.N 376 and 657]. It is not necessary to set out various passages from this judgment as the award under challenge Sets out the relevant passages which clearly rapport the claim of the workmen. In my judgment, there is no infirmity whatsoever with the award Part I declared by the Industrial Tribunal and the petition must fail.

9. Accordingly, rule is discharged with costs.

Shri Cutchi Visa Osw... v. Industrial Tribunal,...