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PETITIONER: GENERAL MANAGER, TELECOM

       Vs.

RESPONDENT: S.SRINIVASA RAO & ORS.

DATE OF JUDGMENT:       18/11/1997

BENCH: CJI, B.N. KIRPAL, V.N. KHARE

ACT:

HEADNOTE:

JUDGMENT:                THE 18TH DAY OF NOVEMBER, 1997 Present:                  Hon’ble the Chief Justice                  Hon’ble Mr. Justice B.N Kripal                  Hon’ble Mr. Justice V.N. Khare N.N. Goswami,  Sr. Adv.,  Arvind Kumar  Sharma,  Ms.  Anubha Jain,  Ms.   Kanupriya  Mittal,   Advs.  with  him  for  the appellant. Rakesh Luthra,  Ms. Pooja Dua and L.R. Singh, Advs., for the Respondents.                       J U D G M E N T      The following Judgment of the Court was delivered: Verma, C.J.I.      Delay condoned.      Leave granted.      This matter comes up before a three-judge Bench because of a  Reference made  by a two-judge Bench which doubted the correctness of  an earlier  two-judge Bench decision of this Court in Sub-Divisional Inspector of Post, Vaikam & Ors. vs. Theyyam joseph  & Ors. (196) 8 SCC 489. It was stated at the Bar that a later two-judge Bench decision reported as Bombay Telephone Canteen  Employees’ Association vs. Union of India - AIR 1997 Supreme Court 2817 also takes the same view as in the case of Theyyam Joseph.      The only  point for  decision in this in this appeal is whether the  Telecom Department  of the Union of India is an industry within  the meaning of the definition of ’industry’ in Section 2(j) of the Industrial Disputes Act, 1947. It may here be  observed that the amendment made in that definition in 1982  has not  been brought  into force  by  the  Central Government by  issuance of  notification  required  for  the purpose. It  is, therefore, not necessary for us to consider whether the  telecommunication Department  of the  Union  of India would  be an  ’industry’ within the meaning thereof in the amended  provision which  is not yet brought into force. We  are,   in  this   matter,  concerned  with  the  earlier definition of  ’industry’ which continues to be in force and which was subject of consideration by a seven judge Bench in Bangalore Water  supply and  Sewerage Board  vs. A Rajappa & Ors. (1978) 2 SCC 213.

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    The above  point arises  for  consideration  out  of  a reference made  under Section 10A of the Industrial Disputes Act, 1947,  which matter  is now  pending in the High Court. The contention of the appellant throughout has been that the Reference  was   incompetent  wince   the  Telecommunication Department of the Union of India is not an ’industry’ within the meaning  of its definition contained in the existing un- amended Section  2(j) of  the Industrial Disputes Act, 1947. Admittedly, this  question has  to be  answered according to the decision of this Court in Bangalore water Supply (supra) which is  a binding  precedent. The dominant nature test for deciding whether  the establishment  is an ’industry’ or not is summarised in para 143 of the judgment of justice Krishna Iyer in  Bangalore Water  Supply case  (supra) which  is  as under:      143. 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 the  University  of  Delhi  case      (supra) 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 (supra), will      be  the   true  test.   The   whole      undertaking  will   be   ’industry’      although   those    who   are   not      ’workmen’  by  definition  may  not      benefit buy status.      (b)  Notwithstanding  the  previous      clauses    sovereign     functions,      strictly    understood,     (alone)      qualify  for   exemption,  not  the      welfare  activities   or   economic      adventures      under-taken      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 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 is  rightly not  disputed by the learned counsel for the   appellant    that   according   to   this   test   the Telecommunication Department  of the  Union of  India is  an ’industry’ within that definition because it is engaged in a commercial activity  and  the  Departments  not  engaged  in discharging any of the sovereign functions of the State.      A two-Judge  bench of  this Court  in Theyyam  Joseph’s case (1966)8  SCC    489  (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  Section 2(j)  of the Industrial Disputes Act, 1947. Incidently,  this decision  was rendered  without  any reference to  the seven-judge  Bench decision  in  Bangalore

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Water Supply (supra). In a later two-judge Bench decision in Bombay Telephone  Canteen Employees’  Association case - AIR 1997 SC 2817, this decision was followed for taking the view that the  Telephone Nigam is not an ’industry’. Reliance was placed in Theyyam joseph’s case (1996) 8 SCC 489 (supra) for that view.  However, in  Bombay Telephone Canteen Employees’ Association case  (i.e. the  latter  decision),  we  find  a reference  to   the  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 (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 (supra) or to by pass 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 think otherwise. Judicial discipline requires  us to  follow the decision in Bangalore Water Supply  case (1978)  2 SCC 213. We must therefore, add that the  decisions in  Theyyam Joseph  (1996) 8 SCC 489 and Bombay Telephone  Canteen Employees’  Association (AIR  1997 Supreme Court  2817) cannot  be treated  as laying  down the correct law.  This being the only point for decision in this appeal, it must fail.      Accordingly, the appeal is dismissed. No Costs.