SC says 1947 Act repeal no bar to defining ‘industry’

ASublime margaret court makeup bench on midweek said that the repeal of the Industrial Disputes move, 1947, in February this year will not affect how “industry” is defined under the law, as its interpretation will remain central to deciding pending industrial dispute pending across courts.The nine-judge bench which is examining the correctness of a 1978 ruling that gave an expansive definition to the term, said: “There is no question of the repeal (of the Act) coming in our way….Our interpretation of the Act will apply to cases which have arisen under the Industrial Disputes Act (IDA). They are still pending in various courts and we are re-defining that.”The court was hearing arguments for and against the 1978 judgment in Bangalore Water Supply case which said that section 2(j) of the 1947 Act should be worker-oriented and should include all industrial activities, including hospitals, universities, clubs and charitable institutions.Hearing trade unions and workers supporting the judgment and urging the court to dismiss the present reference for reconsideration of the 48-year old ruling, the bench headed by Chief Justice of India (CJI) Surya Kant said, “If we find that the 1978 judgment laid down the correct law, then this question will not arise. It is only if we find there is something wrong in that judgment, then the doctrine of prospectivity has to be applied. We have applied it in hundreds of cases.”Senior advocate CU Singh representing federation of trade unions said that on February 2 this year, the 1947 Act was repealed under section 104 of the Industrial Relations Code, which has come into effect from November 2025. He raised a concern that following the 1978 decision, cases of workmen and labourers were decided as per this 48-year old judgment. “The consequence of any interpretation by the court at this stage will set the clock back in cases where evidence was led and judgments rendered. The doctrine of prospectivity cannot apply to repealed statutes except revenue statutes.”The bench, also comprising justices BV Nagarathna, PS Narasimha, Dipankar Datta, Ujjal Bhuyan, SC Sharma, Joymalya Bagchi, Alok Aradhe and Vipul M Pancholi, said, “We have taken note that the labourers and workers have got hopes, reliefs and benefits for decades and we should not take it away.”Senior advocate Indira Jaising who also argued in favour of sustaining the 1978 judgment said that it is strange that state governments, hospitals, state universities, temples have sought review of the Bangalore Water Supply judgment with no private entity having approached the court. She said that the judgment gives a broad definition of industry to all activities which necessarily involved an employer-employee relationship while carving out certain exceptions. She said that on one hand, the Centre represented by Attorney General R Venkataramani argued against giving a broad definition to the term industry as held in 1978, while the new definition of industry adopts more or less what was laid down by the same judgment.She insisted the court should seek data from states on the cases pending before industrial tribunals to know what are the nature and scope of these disputes and which establishments, whether public or private, does it involve.Jasing said that while the new Code enforced in 2025 is not under challenge yet, the court may be required to hold whether charitable institutions can be brought within the fold of industry as they have been excluded specifically under the Code along with social, philanthropic institutions, which have not been defined in the Code.The bench told Jaising that the 1978 judgment was meant to be a “stop gap exposition” as they anticipated a legislative response, which has now come after 50 odd years. “We are not looking at the definition of industry under the new Act at all as this would mean we are commenting upon it. This, however, does not prevent us from interpreting the Bangalore Water Supply judgment in the light of today’s perspective. We are only examining whether the judgment was correctly decided in the context of the definition under the 1947 Act and not the 2025 law.”Further, the court clarified that it will not entertain arguments on whether the reference to the nine-judge bench to determine the correctness of the 1978 judgment was rightly done and asked lawyers opposing such a reference to argue on merits.CJI Kant said, “Since nine of us are sitting, we are hopeful that we will do some meaningful job.” As of now, two nine-judge bench matters and 21 seven-judge bench matters are pending in the top court. He said, “As CJI, my endeavour is to see all cases are heard on the question of law. It is because of these large bench cases, matters have been pending in the high courts and district courts.”The court posted the matter for further hearing on Thursday hoping to conclude arguments and reserve judgments after hearing arguments from other stakeholders and the amicus curiae appointed by the court -- senior advocates JP Cama and PS Sengupta.The outcome of the case could significantly reshape the scope of labour protections under industrial law. A narrower definition of “industry” would exclude a wide range of institutions and government-linked bodies from industrial dispute mechanisms, while reaffirming the earlier ruling would retain the broad sweep of labour adjudication into non-commercial sectors.