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PETITIONER: CHIEF CONSERVATOR OF FORESTS& ANOTHER, ETC. ETC.

       Vs.

RESPONDENT: JAGANNATH M

DATE OF JUDGMENT06/12/1995

BENCH: HANSARIA B.L. (J) BENCH: HANSARIA B.L. (J) AHMADI A.M. (CJ) SEN, S.C. (J)

CITATION:  1996 SCC  (2) 293        JT 1995 (9)   465  1995 SCALE  (7)101

ACT:

HEADNOTE:

JUDGMENT: (With Civil Appeal Nos. 1085/91, 516/92, SLP(C) Nos.5274/89, 5308/89,  5324/89,   5327/89,  5329/89,   5341/89,  5399/89, 5400/89,  5401/89,   5404/89,  5415/89,   5451/89,  5533/89, 5559/89,  5602/89,   5603/89,  5605/89,   7415/89,  7415/89, 7416/89, 7421/89,  7431/89,  12920/87,  12922/87,  12925/87, 12931/87, 12947/87,  12952/87, 12986/87, 13024/87, 13038/87, 13055/87, 13161/87,  13284/87, 15046/87, I.A.No. 17195/92 in C.A. No.1084/91,  SLP(C) No.6456/92, I.A.No.18225/92 in C.A. No.4376/90, SLP(C) Nos.4301-04/94)                       J U D G M E N T HANSARIA, J.      Two questions  in the  main need  our determination  in this batch  of appeals which are by the Chief Conservator of Forests,  State  of  Maharashtra.  The  first  and  foremost question  is   whether  Forest   Department  of   the  State Government is  an "industry"  within the  meaning of section 2(j) of  the Industrial Disputes Act, 1947 (hereinafter ’the Central Act’),  which definition  has been  adopted  by  the Maharashtra Recognition  of Trade  Unions and  Prevention of Unfair Labour  Practices Act,  1971 (for  short  ’the  State Act’). We  shall have  then  to  address  ourselves  to  the question whether  in the  cases at hand the employer, namely the State Government, had indulged in unfair labour practice visualised by  item 6  of Schedule  IV of  the State Act, as alleged by  the respondents  before  the  Industrial  Court, Pune/Ahmednagar. If  these questions  would be  answered  in affirmative, we  would be  required to  consider whether the directions given by the aforesaid Industrial Courts need our interference. 2.   Before applying  our mind  to the  first  question,  it would be  apposite to  mention that  this point had not been before the  Industrial Court  and it is because of this that the High Court, on being approached against the award of the Industrial Court, did allow this point to be agitated before

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it. This  Court, however, felt, in view of the importance of the question,  that the contention may be gone into as would appear  from  the  order  passed  on  6.11.1992.  But  as  a contention was advanced for the respondents-workmen that the dispute is  fairly old and if the matter were to be remanded to Industrial  Court, the  workmen would suffer second round of litigation  causing hardship  to them,  a  direction  was given to the counsel for the appellants to place the factual data, on  record of this Court itself, on the basis of which it was  contended that  the Forest  Department  was  not  an ’industry’. It was so done. 3.   Shri Dholakia,  appearing  for  the  appellants,  first urged, and persistently, that to decide this question we may not be  guided by  what was held in this regard by a 7-Judge Bench of  this Court  in Bangalore  Water-Supply &  Sewerage Board, etc.  vs. R.Rajappa  &  others,  1978  (3)  SCR  207. According  to   the  learned  counsel  this  decision  needs reconsideration and  we should so order. As this was not the stand of the appellants even when the order of 6.11.1992 was passed we  did not permit Shri Dholakia to address us on the need of reconsidering the ration of the aforesaid decision. 4.   We, therefore, propose to examine the first question on the touch  stone of what was held by this Court in Bangalore Water-Supply case. A perusal of that judgment shows that the main judgment  was written by Krishna Iyer, J. (on behalf of self, Bhagwati  and Desai,  JJ. as  would  appear  from  the reporting of  this judgment  in AIR  1978 SC  548). Beg,  CJ endorsed the  opinion and conclusions of Krishna Iyer, J. in a  concurrent   judgment  giving  his  own  reasons.  Though Tulzapurkar, J.  had stated  in the  order passed on the day the judgment  was delivered (February 21, 1978) that reasons for concurrence  and divergence if any would be given later, no such reasons were given. Chandrachud, J. (as he then was) put on  record his reasons on April 7, 1978 by which date he had become  Chief Justice.  Jaswant Singh,  J. also  did the same. 5.   The aforesaid  shows that  the conclusions  reached  by Krishna Iyer,  J. had  been  endorsed  fully  by  two  other learned Judges  and Beg  CJ did  the same  but for different reasons. We  would, therefore,  confine our attention to the conclusions reached  by Krishna  Iyer, J.  which  appear  at pages 282  and 283  of the Report. The one which is relevant for our  purpose is  what finds place under serial titled IV "The dominant nature test", which was spelt out as below :      "(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 the University of Delhi      Case  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  the Corporation of Nagpur,      will be 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 qualify for exemption,      not the  welfare activities  or economic      adventures undertaken  by government  or      statutory bodies.

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    (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  section      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."      (It may  be stated  that it is in pursuance to what was stated under  (d) above that the aforesaid amendment of 1982 was made  which provided  for exclusions of some categories, one of which is "any activity of the Government relatable to the sovereign  functions of the Government including all the activities carried  on by  the departments  of  the  Central Government dealing  with defence research, atomic energy and space". This  is exception  no.(6) of the 9 mentioned in the amended definition).  6. Shri  Dholakia  being  required  to address us  as to  whether the Forest Department can be said to be  an "industry"  as per  the ration in Bangalore Water- Supply case,  urges that  it cannot be, because the function discharged by  the department,  more  particularly  the  one relatable to  the scheme in question, named Pachgaon Parwati Scheme undertaken  in Pune district, is sovereign in nature, which would as per the aforesaid decision itself qualify for exemption. This  is also  the contention  advanced  by  Shri Bhandare,  appearing   for  the   appellants  in  the  cases relatable to  Ahmednagar district. This stand of the learned counsel for  the appellants is strenuously challenged by Ms. Jaising, appearing for the respondents-workmen. 7.   As  per   the  Bangalore  Water-Supply  case  sovereign functions "strictly understood" alone qualify for exemption; and  not  the  welfare  activities  or  economic  adventures undertaken by  the Government.  This is not all. A rider has been  added   that  even   in  the  departments  discharging sovereign functions, if there are units which are industries and they  are substantially  severable,  then  they  can  be considered to  be an industry. As to which activities of the Government could  be  called  sovereign  functions  strictly understood, has not been spelt out in the aforesaid case. 8.   Ms. Jaising,  however, urges  that as  the majority had accepted the  test explained  in the Corporation of the City of Nagpur  vs. Its  Employees, 1960  (2) SCR  942, we should note what  was stated  about  sovereign  functions  in  that decision. In  that judgment  this aspect  has been  dealt at pages 953 to 955 of the Report. The Bench of that case first noted the rival contention advanced in this regard, which by the learned  counsel for  the Corporation was to enlarge the scope of  these functions  as to  comprehend all the welfare activites of a modern State, whereas the learned counsel for the respondents  sought to  confine them  to what  are aptly termed  "the   primary  and   inalienable  functions   of  a constitutional government."  In support  of the  contentions advanced reference was made to Holland’s Jurisprudence as to which it  was observed  by the  Bench that  the same  had no relevance. The  Bench then  referred to  what was  stated by Lord Watson  in Coomber  v. Justices  of Berks,  (1883-84) 9 Appeal  Cases   61,  in   which  the   functions   such   as administration  of   justice,  maintenance   of  order   and repression of  crime were  described among  the primary  and inalienable  functions.  Reference  was  then  made  to  the dissenting judgment of the Isaacs, J. in The Federated State School Teachers  Association of  Australia v.  The State  of

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Victoria, (1929)  41 C.L.R.  569, in which the learned Judge stated as below at page 585 :      "Regal  functions  are  inescapable  and      inalienable. Such  are  the  legislative      power, the  administration of  laws, the      exercise of  the  judicial  power.  Non-      regal functions  may be assumed by means      of the  legislative power. But when they      are assumed  the State  acts simply as a      huge corporation,  with its legislation,      as the  charter. Its  action  under  the      legislation, so  far as  it is not regal      execution of the law is merely analogous      to that  of a  private company similarly      authorised."  <SLE>      The  Bench   thereafter  observed  that  the  aforesaid clearly mark  out  the  ambit  of  the  regal  functions  as distinguished from  the other  powers of a State. This shows that as  per the  Corporation of Nagpur case those functions alone which  are inalienable  can be  called sovereign.  Ms. Jaising would like us to take the same stand. 9.   Shri Dholakia and Shri Bhandare, however, urged that in view of  the  constitutional  duty  imposed  on  States,  to undertake  many   activities   including   preservation   of environment, a  la -  Article 48A  of the  Constitution, the extent of  sovereign functions  may not  be confined  to the aforesaid three  in as much as other functions could also be inalienable :  and protection  of environment in the present state of  pollution is  one such  function, which cannot be, and would  not be,  undertaken by  any private  agency in  a meaningful way. 10.  In support  of the  aforesaid contention,  the  learned counsel for  the appellants  have relied  on a decision of a Division Bench  of the Gujarat High Court rendered by one of us (Ahmadi,  J. as he then was) in the case of J.J. Shrimali v. District  Development Officer,  Mehsana &  Ors.,  1989(1) Gujarat Law Reporter 396. This aspect of the matter has been dealt with at pages 405 to 410 of the judgment, reference to which shows  that keeping  in view  the  special  facts  and circumstances of the case (paragraph 11), namely undertaking of famine  and drought  relief works by the State Government by introducing certain schemes to provide relief and succour works to  the affected people, instead of distributing doles which may  hurt the  dignity, self respect and sentiments of those receiving  the same,  it was  held that  it  would  be difficult to  hold the undertaking to be an ’industry’. What really follows  from this  judgment is  that apart  from the aforesaid three functions, there may be some other functions also regarding which a view could be taken that the same too is a sovereign function. We accept this. 11.  As to  which function could be, and should be, taken as regal or  sovereign function has been recently examined by a Bench of this Court, to which one of us (Hansaria, J.) was a party. This  was in  Nagendra Rao  & Co.  vs. The  State  of Andhra Pradesh,  JT 1994 (5) SC 572, in which case Sahai, J. speaking for  the Bench  examined this question in detail in the background of the stand of the respondent-State pleading absence of  vicarious liability  because of  the doctrine of sovereign immunity.  This aspect  has been dealt in paras 21 to 24.  Para 21  opens by  saying that  the old  and archaic concept of  a sovereignity  does not survive as sovereignity now vests  in the  people. It is because of this that in the aforesaid Australian  case the distinction between sovereign and non-sovereign  functions was  categorised as  regal  and

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non-regal. In  the some  cases the  expression used is State function, whereas in some Governmental function. 12.  We may  not go by the labels. Let us reach the hub. And the same  is  that  the  dichotomy  of  sovereign  and  non- sovereign functions  does not  really exist  - it  would all depend on  the  nature  of  the  power  and  manner  of  its exercise, as  observed in  para 23 of Nagendra Rao’s case As per the decision in this case, one of the tests to determine whether the  executive function is sovereign in nature is to find out  whether the State is answerable for such action in courts of  law. It  was stated  by Sahai,  J. that acts like defence of the country, raising armed forces and maintaining it, making  peace or  war, foreign affairs, power to acquire and retain  territory, are functions which are indicative of external sovereignity and are political in nature. They are, therefore, not  amenable to  the  jurisdiction  of  ordinary civil court  in as  much as  the State  is immune from being sued in  such matters.  But then, according to this decision the immunity  ends there.  It was  then observed  that in  a welfare State,  functions of  the State  are  not  only  the defence of  the country  or  administration  of  justice  or maintaining law  and order  but extends  to  regulating  and controlling the activities of people in almost every sphere, educational, commercial,  social,  economic,  political  and even marital.  Because of  this the demarcating line between sovereign and non-sovereign powers has largely disappeared. 13.  The aforesaid  shows that  if we  were  to  extend  the concept  of   sovereign  function  to  include  all  welfare activities as  contended on  behalf of  the appellants,  the ratio in  Bangalore Water-Supply  case would get eroded, and substantially. We  would demur to do so on the face what was stated in  the aforesaid  case according to which except the strictly understood  sovereign function,  welfare activities of the State would come within the purview of the definition of industry;  and, not  only this,  even  within  the  wider circle of  sovereign function,  there may be an inner circle encompassing  some   units  which  could  be  considered  as industry if substantially severable. 14.  This is  not all,  as Shri  Dholakia has submitted that the Pachgaon  Parwati Scheme (and for that matter the social forestry work  undertaken in Ahmednagar district, in appeals relating to  which Shri  Bhandare has  addressed  us)  being meant for  preservation of forests and environment has to be regarded, in any case, as part of inalienable function in as much as  the type  of work  which was  undertaken under that scheme could  not have  been done by a private individual or entity. 15.  A  perusal   of  the   affidavit  filed  by  the  Chief Conservator of  Forests on  5.12.1992, pursuant to our order of 6.11.1992,  shows that  the Pachgaon  Parwati Scheme  was framed as  per the Government Resolution based on the policy decision taken in April 1976. The Scheme was to be initially for a  period of  5 years  and an area of about 245 hectares situated on  a hill  plateau on  the southern  outskirts and within easy access of Pune City was selected for creation of a park  under bio-aesthetic  development for  the benefit of the urban  population. It  is further stated that the scheme was   "primarily    intended   to    fulfil   bio-aesthetic, recreational and educational aspirations of the people which will  have   inestimable  indirect   benefit  of   producing enlightened  generation   of  conservationists   of   nature inclusive of  forests and  wild life  for the future". (Page 137) The  affidavit goes  on to state (at page 138) that the Pune  Forest   Division  is  also  doing  afforestation  for soil/moisture conservation under various State level schemes

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as well as Employment Guarantee Schemes all of which are for a period of 5 years. 16.  The aforesaid being the crux of the scheme to implement which some  of the  respondents were employed, we are of the view  that  the  same  cannot  be  regarded  as  a  part  of inalienable or  inescapable function  of the  State for  the reason that  the scheme  was intended  even  to  fulfil  the recreational and  educational aspirations  of the people. We are in no doubt that such a work could well be undertaken by an  agency   which  is   not  required   to   be   even   an instrumentality of the State. 17.  This being  the position,  we hold  that the  aforesaid scheme  undertaken   by  the  Forest  Department  cannot  be regarded as  a part  of sovereign function of the State, and so, it  was open to the respondents to invoke the provisions of the  State Act.  We would  say the  same qua  the  social foresting work undertaken in Ahmednagar district. There was, therefore, no  threshold bar  in knocking  the door  of  the Industrial Courts  by the  respondents  making  a  grievance about adoption of unfair labour practice by the appellants. 18.  This takes us to the second main question as to whether on the  facts of  the present case could it be held that the appellants were  guilty of  adopting unfair labour practice. As  already   pointed  out,   the  respondents  alleged  the aforesaid act  by relying on what has been stated under item 6 of Schedule IV of the State Act which reads as below :      "To employ employee as "badlis", casuals      or temporaries  and to  continue them as      such  for  years,  with  the  object  of      depriving  them   of  the   status   and      privileges of permanent employees." 19.  The Industrial Court has found the appellants as having taken recourse  to unfair  labour practice  in  the  present cases because the respondents-workmen who had approached the Court had admittedly been in the employment of the State for 5 to  6 years and in each year had worked for period ranging from 100  to 330  days. Ms.  Jaising draws  our attention in this context  to  the  statement  filed  by  the  appellants themselves before  the Industrial  Court, a copy of which is at pages  75 to 76 of C.A. No.4375/90. A perusal of the same shows that some of the respondents had worked for a few days only in  1977 and  1978, though subsequently they themselves had worked  for longer period, which in case of Gitaji Baban Kadam, whose  name is  at serial No.4 went upto 322 in 1982, though in 1978 he had worked for 4-1/2 days. (Similar is the position qua some other respondents). 20.  According to  Ms. Jaising  the lesser  number  of  days worked by say Gitaji in 1978, could have been because of his having sought employment in that year towards the fag-end or it may  also be because of the fact that to start with large number of persons were engaged, which by 1981-82 got settled around 60,  as would appear from the statement at page 66 of the aforesaid  appeal. It is brought to our notice that only 25 such  persons had approached the Industrial Court of Pune (this number  is 15 in the other batch) and as regards these 25 there  should not  be any  doubt that they had worked for long despite  which they  were continued  as casuals,  which fact is  enough to draw the inference that the same was with the object of depriving them of the status and privileges of permanent employees.  Learned counsel  urges that  on  these facts it  was the  burden of  the employer  to  satisfy  the Industrial Court  that the  object was not as was alleged by the workmen. 21.  Shri Dholakia  would not  agree to  this submission as, according to  him, the  item in  question having not stopped

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merely by stating about the employment of persons as casuals for years  being sufficient  to describe  the same as unfair labour practice, which is apparent from what has been in the second part of the item, it was the burden of the workmen to establish that  the object  of continuing them for years was to deprive  them of  the status  and privileges of permanent employees. Ms.  Jaising answers  this by  contending that it would be  difficult for any workmen to establish what object an employer  in such  a matter  has, as that would be in the realm of  his subjective satisfaction known only to him. She submits that  we may not fasten a workman with such a burden which he cannot discharge. 22.  We have  given our  due thought  to the aforesaid rival contentions and,  according to  us, the  object of the State Act, inter  alia, being  prevention of certain unfair labour practices, the  same would  be thwarted or get frustrated if such a  burden is  placed  on  a  workman  which  he  cannot reasonably  discharge.   In  our   opinion,  it   would   be permissible on  facts of  a  particular  case  to  draw  the inference mentioned  in the  second part  of  the  item,  if badlis, casuals  or temporaries  are continued  as such  for years. We  further state that the present was such a case in as much  as from  the materials  on record  we are satisfied that the  25 workmen  who went  to Industrial  Court of Pune (and 15  to Industrial  Court, Ahmednagar)  had been kept as casuals for  long years with the primary object of depriving them the  status of permanent employees in as much as giving of this  status would  have required the employer to pay the workmen at  a rate  higher than  the  one  fixed  under  the Minimum Wages  Act. We can think of no other possible object as, it  may be  remembered that  the Pachgaon Rarwati Scheme was intended  to cater  to the  recreational and educational aspirations also  of the  populace, which  are not ephemeral objects, but par excellence permanent. We would say the same about environment-pollution-care  work of  Ahmednagar, whose need is  on  increase  because  of  increase  in  pollution. Permanency is  thus writ large on the face of both the types of work. If, even in such projects, persons are kept in jobs on casual  basis for  years the  object manifests itself; no scrutiny is  required.  We,  therefore,  answer  the  second question also against the appellants. 23.  The  final  point  which  needs  our  determination  is regarding the reliefs granted by the Industrial Court, which is to  make the workmen, in both the matters, permanent with all benefits  of a  permanent worker,  which  would  include payment of  wages etc.  at the  rate meant  for a  permanent worker. 24.  On the relief part, it is Shri Bhandare who principally addressed us.  His contention  in this  regard is  that  the relief  of   making  the  workmen  permanent,  that  is,  to regularise them was not justified in as much as some of them had been employed under the Maharashtra Employment Guarantee Act, 1977.  In any  case the  drain on State exchequer which would follow  if all  workers like the respondents are to be paid as  permanent employees  would be  so enormous that the State would  find it  difficult to  engage in  other welfare activities. 25.  To bring  home  his  submission  regarding  the  unjust nature  of  the  relief  relating  to  regularisation,  Shri Bhandare sought  to rely  on the  decision of  this Court in Delhi Development  Horticulture Employees  Union  vs.  Delhi Administration, Delhi,  JT 1992  (1) SC 394. We do not think that the  ratio of  this decision is applicable to the facts of the  present case in as much as the employment of persons on daily  wage basis  under  Jawahar  Rozgar  Yojna  by  the

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Development Department  of Delhi Administration, whose claim for regularisation  was dealt  in  the  aforesaid  case  was entirely different  from that  of the  scheme in  which  the respondents-workmen were  employed. Jawahar Rozgar Yojna was evolved to  provide income  for  those  who  are  below  the poverty line  and particularly  during the periods when they are without any source of livelihood and, therefore, without any income  whatsoever. It is because of this that the Bench observed that  the object  of the  scheme was not to provide right to  work as  such even to the rural poor, much less to the unemployed  in general. As against this, the workmen who were employed  under the schemes at hand had been so done to advance objects having permanent basis as adverted to by us. 26.  Therefore, what was stated in the aforesaid case cannot called in aid at all by the appellants. According to us, the case is more akin to that of State of Haryana v. Piara Singh and others  1992 (4)  SCC 118,  in which this Court favoured the State  Scheme for regularisation of casual labourers who continued for  a fairly long spell - say two or three years. (paragraph 51).  As in  the  cases  at  hand  the  concerned workmen had,  by the  time they  approached  the  Industrial Courts worked for more or less 5 years continuously, no case for interference  with this part of the relief has been made out. 27.  We may  also meet  the  contention  that  some  of  the workmen had  been employed  under the Maharashtra Employment Guarantee Act, 1977. As to this, we would first observe that no factual  basis for  this submission is on record. Indeed, in some  of the  cases it  has been  pointed  out  that  the employer had  not  even  brought  on  record  any  order  of appointment under  this Act.  This apart,  a perusal of this Act shows  that it  has not  excepted the application of the Industrial Disputes  Act, 1947.  This is  apparent from  the perusal of section 13 of this Act. It may be further pointed out that  this Act having been brought into force from 1978, could not  have applied  to the appointments at hand most of whom are of the year 1977. 28.  In so far as the financial strain on State exchequer is concerned, which  submission is  sought to  be buttressed by Shri Dholakia  by stating  that in  the  Forests  Department itself the casual employees are about 1.4 lacs and if all of them were  to be regularised and paid at the rate applicable to permanent  workmen, the financial involvement would be in the neighbourhood  Rs. 300 crores-a very high figure indeed. We have not felt inclined to bear in mind this contention of Shri Dholakia  as the  same has been brought out almost from the hat. The argument relating to financial burden is one of despair or  in terrorem.  We have  neither been impressed by the first  not frightened  by the second in as much as we do not intend  that the view to be taken by us in these appeals should apply, proprio vigore, to all casual labourers of the Forests  Department   or  any   other  Department   of   the Government. 29.  We  wish   to  say  further  that  if  Shri  Bhandare’s submission is  taken to  its logical  end, the justification for paying even minimum wages could wither away, leaving any employer, not  to speak of model employer like the State, to exploit unemployed  persons. To  be fair to Shri Bhandare it may, however,  be stated  that the  learned counsel  did not extend his  submission of  Shri Bhandare  to payment of, say fair wages,  as distinguished  from minimum  wages. We  have said so,  because if  a pay  scale  has  been  provided  for permanent workmen that has been done by the State Government keeping in  view its legal obligations and must be one which had  been  recommended  by  the  State  Pay  Commission  and

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accepted by  the Government.  We cannot  deny this relief of permanency to  the respondent-workmen  only because  in that case they  would be  required to  be paid  wages  meant  for permanent workers.  This right  flows automatically from the relief  of   regularisation  to   which  no   objection  can reasonably be  taken, as  already  pointed  out.  We  would, however, observe  that the  relief  make  available  to  the respondents is  not one  which would be available ipso facto to all the casual employees either of the Forests Department or any  other Department  of  the  State.  Claim  of  casual employees for  permanency or for higher pay shall have to be decided on the merits of their own cases. 30.  For  the  reasons  aforesaid,  we  find  no  ground  to interefere  with  the  impungned  order  of  the  Industrial Courts. The  appeals are, therefore, dismissed. In the facts and circumstances of the case, we, however, make no order as to costs.