The legal question in reference to the proposed nine-judge bench refers to the 1978 judgment delivered in Bangalore Water Supply and Sewerage Board v A. Rajappa by VR Justice Krishna Iyer as a member of the seven-judge bench. File | Photo credit: The Hindu
A nine-judge bench of the Supreme Court on Thursday (March 19, 2026) reserved a decision on whether educational institutions, hospitals and sovereign functions of the government and its instrumentalities fall within the definition of “industrial activity” under the Industrial Disputes Act.
A bench headed by Chief Justice of India Surya Kant and comprising Justices BV Nagarathna, PS Narasimha, Dipankar Datta, Ujjal Bhuyan, Satish Chandra Sharma, Joymalya Bagchi, Alok Aradhe and Vipul M Pancholi reserved its verdict for the third and final day of oral arguments.
The legal question in reference to the proposed nine-judge bench refers to the 1978 judgment delivered in Bangalore Water Supply and Sewerage Board v A. Rajappa by VR Justice Krishna Iyer as a member of the seven-judge bench.
The 1978 judgment expanded the definition of “industry” under section 2(a). (j) of the Industrial Disputes Act, 1947. The judgment introduced a threefold test and included hospitals, educational institutions and municipalities as industries.
States like Uttar Pradesh, Maharashtra and Punjab, represented by additional attorney general KM Nataraj and senior advocates Shekhar Naphad and Shadan Farasat, urged the apex court to review the verdict of the seven-judge bench. Senior advocates like Indira Jaising, CU Singh and Gopal Sankaranarayan argued in favor of keeping the reasoning of the 1978 judgment unchanged.
Remedy for workers
Ms Jaising said the inclusion of businesses under the definition of industry gives workers a remedy to ventilate their grievances regarding fair wages, health and safety, job security, job security and challenge unfair dismissals to a judicial body. “A democratic legal society is bound to provide all its citizens with a forum for redressal of grievances of a judicial nature where their substantive rights can be ventilated,” she said.
The 1978 judgment broadened the scope of “industry” so that any systematic activity, whether carried on for profit or not, including charitable and government services, is an industry if it meets the parameters of the “triple test”. The ruling was designed to allow employees to claim status and legal protection as industrial “workers”. The 1978 judgment merely excluded sovereign functions from the scope of the definition of “industry”.
Published – 19 March 2026 22:29 IST
