1. By this common judgment, two Civil Writ Petitions Nos. 11791 and 13993 of 1996, can conveniently be disposed of together because the questions involved in both these petitions are identical.

2. State of Punjab assails the order passed by the Presiding Officer, Labour Court, Jalandhar. The relevant facts in the case of State of Punjab v. Hart Dass are that Hari Dass had alleged that he was employed as a beldar in the Public Works Department (Building and Roads). Provincial Division, Hoshiarpur, on 10 August 1990. He worked continuously up to 8 July 1981. His services were terminated without any notice, chargesheet or retrenchment compensation. He was getting Rs. 385 per month as his wages. He gave a demand notice and a reference was made to the Labour Court. The said reference was declined by the Labour Court only on the ground that the Public Works Department is not an industry. A fresh reference was made in view of the judgment of the Supreme Court wherein the Supreme Court has categorically stated that the Public Works Department is an industry. In the reply filed, State of Punjab has contested the same. It was insisted that the Public Works Department (Building and Roads) is not an industry within the meaning of the Industrial Disputes Act. The workman is stated to have not completed 240 days and, therefore, the reference was not maintainable. Plea was raised that the workman had been engaged for a specific period, for a specific job and, therefore, it was not a case of retrenchment.

3. The learned Labour Court framed the issues and held that the principle of res judicata is not attracted. It was held that the petitioner PWD (B&R) Department is an industry and that services were terminated without any enquiry and the respondent workman had completed more than 240 days in the preceding 12 months before his retrenchment. Accordingly, the reference was allowed. The termination order of respondent-workman was set aside. Keeping in view the delay and the earlier reference that had been answered, it was held that the workman would be entitled to ⅓rd of wages after 27 October 1988 till 20 July 1995 and full wages from that date onwards. Of course, he was not reinstated.

4. Similar were the facts in the case of Executive Engineer, Central Works Division, PWD B&R Branch, Hoshiarpur v. Hardev Singh. Herein, there was no earlier reference which had been declined. The learned Labour Court on 7 September 1995 accepted the reference and set aside the order of termination. It was directed that he be taken back into service with continuity of service and with one-third of the back-wages with benefit of increments.

5. Learned counsel appearing on behalf of the State urged that in the present case retrenchment had been made because the work for which the workman had been engaged was completed. The proposition of law in this regard cannot be disputed that if it was so, the same could be considered. But in the present case there is no such material that had been brought before this Court or before the Labour Court to show that the work for which the workman was engaged had been completed. Therefore, this particular plea is simply stated to be rejected.

6. The main argument advanced was that the Public Works Department (Building and Roads) is not an industry and, therefore, no relief could be granted to the workman.

7. The leading case on the subject is Bangalore Water Supply and Sewerage Board v. A. Rajappa [1978 (1) L.L.N 376 and 657]. The dominant nature test for deciding whether the department is an “industry” or not has been summarised in Para. 163, at page 430 of the judgment of the Supreme Court which is as under:

“The dominant nature test:

(a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not ‘workmen’ as in University of Delhi case [A.I.R 1963 S.C 1873], 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 as explained in Corporation of Nagpur [A.I.R 1960 S.C 675] (vide supra), will be the true test. The whole undertaking will be ‘industry’ although those who are not ‘workmen’ by definition may not benefit by the status.

(b) Notwithstanding the previous clauses, sovereign functions, strictly understood (alone) quality for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies.

(c) 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 S. 2(j).

(d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby.”

8. This question had been considered by the Supreme Court subsequently in the case of Des Raj v. State of Punjab [1988 (2) L.L.N 1]. The question for consideration was if the Irrigation Department was an “industry” or not? The Supreme Court scanned through the earlier decisions of the Supreme Court and referred to the dominant nature test already referred to above. It was held that it was an industry. Earlier Full Bench decision of this Court was not approved. Supreme Court held as under, in Para. 13, at page 12:

“The administrative report of the facts found by the High Court in the instant case have attempted to draw out certain special features. The legal position has been indicated in the earlier part of our judgment. On the tests, as already laid down in the judgments, we do not think these facts found in this case can take out the Irrigation Department outside the purview of the definition of ‘industry.’ We have already referred to the dominant nature test evolved by Krishna Iyer, J. The main functions of the Irrigation Department when subjected to the dominant nature test clearly-come within the ambit of industry…”

9. More recently, the Supreme Court in the case of General Manager, Telecom v. S. Srinivasan Rao [1998 (1) L.L.N 326], was considering as to whether the Telecom Department of the Union of India is an industry or not? It was held to be so and the Supreme Court further held as under, in Para. 7, at page 328:

“A two-Judge Bench of this Court in Theyyam Joseph case [1996 (2) L.L.N 82] (vide supra), held that the functions of the Postal Department are part of the sovereign functions of the State and it is, therefore, not an ‘industry’ within the definition of S. 2(j) of the Industrial Disputes Act, 1947. Incidentally, this decision was rendered without any reference to the seven-Judge Bench decision in Bangalore Water Supply [1978 (1) L.L.N 376 and 657] (vide supra). In a later two-Judge Bench decision in Bombay Telephone Canteen Employees' Association case [1997 (2) L.L.N 1038] (vide supra), this decision was followed for taking the view that the Telephone Nigam is not an ‘industry.’ Reliance was placed in Theyyam Joseph case (vide supra), for that view. However, in Bombay Telephone Canteen Employees' Association case (i.e, the latter decision), we find a reference to Bangalore Water Supply case. After referring to the decision in Bangalore Water Supply, it was observed that if the doctrine enunciated in Bangalore Water Supply is strictly applied, the consequence is catastrophic. With respect, we are unable to subscribe to this view for the obvious reason that it is in direct conflict with the seven-Judge Bench decision in Bangalore Water Supply case (vide supra), by which we are bound. It is needless to add that it is not permissible for us, or for that matter any Bench of lesser strength, to take a view contrary to that in Bangalore Water Supply (vide supra), or to bypass that decision so long as it holds the field. Moreover, that decision was rendered long back nearly two decades earlier and we find no reason to link otherwise. Judicial discipline requires us to follow the decision in Bangalore Water Supply case (vide supra). We must, therefore, add that the decisions in Theyyam Joseph case (vide supra), and Bombay Telephone Canteen Employees' Association (vide supra), cannot be treated as laying down the correct law …

10. In the present case it has not been shown that functions purely were sovereign. The Building and Roads Department, once it is not shown to be performing purely sovereign functions of the State, therefore, was rightly held to be an industry. The dominant nature test as laid down by the Supreme Court in the case of Bangalore Water Supply and Sewerage Board case [1978 (1) L.L.N 376 and 657] (vide supra), would clearly go against the petitioner because welfare activities or economic adventures undertaken by the Government have been excluded. Consequently, it must follow that the Labour Court rightly held the petitioner to be an industry. In this regard, reference can well be made to the Division Bench decision of this Court in the case of State of Punjab v. Hari Chand [C.W.P No. 11790 of 1996, decided on 11 November 1997]. The same question pertaining to the PWD (B&R) Department was under consideration. The Division Bench held the same to be an industry. There is no ground to take a different view.

11. However, on behalf of the State, in the case of Hari Dass it was alleged that earlier there was a reference which had been declined holding that the PWD (B&R) Department was not an industry and, therefore, the second reference was not maintainable. It was contended that it was barred by the principle of res judicata. However, it has not been disputed that the same was based on the earlier decision of the Full Bench of this Court and it was also not being disputed that the said decision has not been approved by the Supreme Court. When such is the position, then the erroneous decision on the point of law will not operate as res judicata. Supreme Court considered this question in the case of Mathura Prasad Sarjoo Jaiswal v. Dossibai N.B Jeejeebhoy [(1970) 1 SCC 613 : A.I.R 1971 S.C 2355], and held that an erroneous decision in law will not operate as res judicata and in Para. 9 of the judgment it was observed as under:

“… A question relating to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court. If by an erroneous interpretation of the statute the Court holds that it has no jurisdiction, the question would not, in our judgment, operate as res judicata. Similarly by an erroneous decision if the Court assumes jurisdiction which it does not possess under the statute the question cannot operate as res judicata between the same parties, whether the cause of action in the subsequent litigation is the same or otherwise.

12. Similar question again came up for consideration in the case of Jai Singh Jairam Tyagi v. Maman Chand Ratilal Agarwal [(1980) 3 SCC 162 : A.I.R 1980 S.C 1201]. It was held by the Supreme Court that where the executing Court had refused to exercise jurisdiction and to execute the decree on the ground that the decree was a nullity as the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, had no application to building in cantonment areas, that defect having been removed and all decrees obtained on the basis of the Bombay Rent Law applied to the Bombay Cantonment. It cannot be said that the earlier decision operated as res judicata. Similarly, in the present case, when the earlier decision was erroneous and contrary to law, it will not operate as res judicata. The learned Labour Court rightly had not awarded any compensation or wages for that period.”

13. No other point has been urged.

14. For these reasons, both the civil writ petitions being without merit must fail and are accordingly dismissed.