Bangalore Water Supply & Sewerage Board v A. Rajappa (1978)

Labour Law I · Definitions

Facts.

Employees of the statutory Water Supply Board were fined; they raised an industrial dispute. The Board argued it was a statutory body performing regal functions, not an “industry”.

Issue.

What is the true scope of “industry” under s.2(j) of the ID Act?

Held.

A seven-judge bench laid down the triple test — systematic activity, employer– worker cooperation, and production/distribution of goods or services to satisfy human wants. Profit is irrelevant. Hospitals, universities, clubs and most government undertakings are industries; only sovereign functions and purely spiritual/charitable bodies are excluded.

Why it matters.

It is the governing authority on “industry” and is carried into s.2(p) of the IR Code, 2020. Every “is X an industry?” answer starts here.

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