Chief Engineer, Irrigation, Orissa v. Harihar Patra And Others

R.N Misra, J.:— This is an application to quash the order of the Labour Court at Bhubaneswar, made in a proceeding under S. 33C(2) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act) quantifying the claims of forty employees under the Salandi Irrigation Project on account of construction allowance and unhealthy allowance.

2. The construction of the Salandi Dam Project has been undertaken by the State Government in the Irrigation Department and under the project opposite parties 1 to 40 have been employed at Hadagarh in the district of Keonjhar. These opposite parties made a joint application before the Labour Court at Bhubaneswar under S. 33C(2) of the Act claiming 20 per cent of their basic pay as construction allowance and 10 per cent of such pay as unhealthy allowance. According to them the construction allowance had been paid with effect from 3 February, 1964, though they were entitled to it from 1960. Similarly they claimed unhealthy allowance from 1956 up to 31 July, 1972, on the ground that it has not been at all paid. Before the Labour Court, the petitioner took the stand that Salandi Dam Project is not an industry and as such the application made under the Act was not maintainable. The Labour Court framed the following issues for determination:

(1) Is the Salandi Dam Project an industry and whether the petitioners are workmen as defined under the Act?

(2) Whether the petitioner are entitled to get both the allowances as claimed?

(3) What is the quantum?

The Labour Court held that the project was an industry and it found that Hadagarh was an unhealthy locality as already declared by the State Government and, therefore, the workmen were entitled to both the allowances as claimed. Accordingly the Labour Court proceeded to quantify the dues of each of the applicants.

3. Though several contentions had been raised in the writ application, learned Government Advocate at the hearing presses the sole contention that the project is not an industry and, therefore, the Labour Court has no jurisdiction to entertain the application under S. 33C(2) of the Act. Counsel for both sides agree that unless the project is an industry, the application made before the Labour Court would not have been tenable. The Labour Court relied upon the ratio in the decision of the Supreme Court in the case of Management Of Safdarjung Hospital, New Delhi v. Kuldip Singh Sethi† [(1970) 1 SCC 735 : A.I.R 1970 S.C 1407], that before the work engaged in could be described as an industry, it must bear the definite character of trade or business or manufacture of calling and must be capable of being described as an undertaking resulting in material good or material services. The Labour Court found that the above tests were satisfied in the case and accordingly came to the conclusion that the project was an industry.

4. A Full Bench of this Court had occasion to examine the question in the case of Orissa Pipe and Water Workers' Union v. Registrar of Trade Unions-cum-Labour Commissioner, Orissa, [1976 — I L.L.N 118]. Several decisions of the Supreme Court were considered and the Court ultimately summarized the position thus (in Para. 16 at pages 127 and 128):

“The strict view taken in regal functions of the State in Nagpur Corporation v. Its employees [A.I.R 1960 S.C 675], has not been accepted in the subsequent judgments. The old concept of essential and non-essential State activity has undergone a profound change in modern times and what was once considered as non essential activity of the State has to a large extent been now included within the fold of essential activity. Within the regal activity of modern State are comprehended several matters which the doctrinaire approach of the Austinian School would have readily dismissed. The concept of the primary and inalienable functions of a constitutional Government as indicated by Lord Watson a hundred years back, has expanded to include several activities which now are considered as basic fundamental and as much inalienable as activities of legislation, dispensation of justice and administration of Government. Governmental business today includes several functions which a few decades back could not have been conceived as Governmental activity at all. Education, providing medical facilities to citizens, improving their sanitation and the like have today become essential business of Government. In fact, the decisions of the Supreme Court rendered after 1960, have taken note of the changed concept and in Safdarjung Hospital case [(1970) 1 SCC 735 : A.I.R 1970 S.C 1407] (vide supra), the changed view received due judicial recognition and, therefore, the view taken in State of Bombay v. Hospital Mazdoor Sabha [A.I.R 1960 S.C 610], was no more acceptable. The principles laid down in the Hospital Mazdoor Sabha case (vide supra), were utilized in Nagpur Corporation case (vide supra), and, therefore, the conclusion pointed out therein suffered from the same draw back in Safdarjung Hospital case (vide supra).”

In the said case, the dispute was as to whether the Public Health Department of the State Government could be considered as an industry. The present case is, however, different on facts. The Salandi Dam Project avowedly is an irrigation project within the definition of the Orissa Irrigation Act. It is common knowledge and judicial notice can be taken of the position that for supply of water from such a project water rate is charged even for agricultural purposes. Apart from it, there is provision under the Irrigation Act and the rules made thereunder to supply water from the project for commercial purposes on payment basis. The ratio in the Supreme Court decision relied upon by the Labour Court Safdarjung Hospital case (vide supra), was expressed by the Court thus:

“… The definition read as a whole denotes a collective enterprise which employers and employees are associated. It does not exist either by employers alone or by employees alone. It exists only when there is a 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 who follow one of the avocations detailed for workmen. The definition no doubt seeks to define industry with reference to employers' occupation but includes the employees, for without the two there can be no industry. An industry is only to be found when there are employers and employees, the former relying upon the services of the latter to fulfil their own occupations.

But every case of employment is not necessarily productive of an industry. Domestic employment, administrative services of public officials, service in aid of occupations of professional men, also disclose relationship of employers and employees but they cannot be regarded as in the course of industry…

It, therefore, follows that before an industrial dispute can be raised between employers and their employees or between employers and employers or between employees and employees in relation to the employment or non-employment or the terms of employment or with the conditions of labour of any person, there must be first established a relationship of employers and employees associating together, the former following a trade, business, manufacture, undertaking or calling of employers in the production of material goods and material services and the latter following any calling, service, employment, handicraft, or industrial occupation or avocation of workmen in aid of the employers' enterprise. It is not necessary that there must be a profit motive but the enterprise must be analogous to trade or business in a commercial sense.”

It is not disputed that the tests indicated above fairly reflect the consensus of judicial view. The Labour Court has found that there is scope for profit and we would add that even if the profit motive is not established, there is no scope to hold that the project is not an enterprise analogous to trade or business in a commercial sense. Reliance has been placed by counsel for opposite parties on a Bench decision of the Madhya Pradesh High Court in the case of Madhya Pradesh Irrigation Karamchari Sangh, Sambhag Gwalior, Chambal Canal, Sheopur Kalan, District Morena, Madhya Pradesh v. State of Madhya Pradesh [1972 — I L.L.J 374], where the question for consideration was whether the Chambal Hydel Irrigation Project was an industry. The Court upheld the contention that it was an industry by applying the tests laid down by the Supreme Court. Learned Government Advocate contended that the ratio laid down in the Madhya Pradesh decision may not be applied because the Chambal Hydel Project was intended to manufacture electricity which was to be sold to the consumers, whereas in the instant case, we are not concerned with a hydel project but only with a dam. There is no material before us to hold that the Salandi Dam Project would not generate electricity by the hydel process. It may be mentioned here that the two hydel projects in Orissa being the Hirakund Dam and the Balimela Dam have already been found to be industries. In these circumstances, we are not in a position to accept the contentions advanced by the Chief Engineer.

5. The writ application accordingly fails and is dismissed. Opposite parties shall be entitled to costs. Hearing fee is assessed at rupees one hundred.

6. Panda, J.:— I agree.