High Court Upholds Worker Rights Against Dharmarth Trust: Religious Entity Deemed 'Industry' Under Labour Laws

In a significant ruling for labour rights in religious institutions, the High Court of Jammu & Kashmir and Ladakh has dismissed a petition by the Dharmarth Trust J&K, affirming that the trust qualifies as an 'industry' under the Industrial Disputes Act, 1947 (ID Act). The court upheld an award by the Industrial Tribunal, Jammu, which declared the termination of safai karamchari Chand Ram illegal and ordered 50% back wages. The decision, pronounced on December 19, 2025, by Justice M A Chowdhary, emphasizes the applicability of labour protections to organized activities beyond purely spiritual functions.

Case Background and Timeline

The dispute originated from the termination of Chand Ram, a daily wage safai karamchari (sanitation worker) employed by the Dharmarth Trust since April 18, 1991, at a wage of Rs. 10.75 per day. Chand Ram was disengaged on January 1, 2001, following repeated absences cited as misconduct by the trust's administrator at Shri Raghunath Ji Temple. The Government of Jammu & Kashmir referred the matter to the Industrial Tribunal under SRO 13 dated January 20, 2003, for adjudication on whether the termination was illegal.

The Tribunal, in an ex parte award dated September 9, 2003, quashed the termination, ruling it violated Section 25F of the ID Act (conditions precedent to retrenchment of workmen). It held Chand Ram in continuous service and entitled to 50% back wages from termination to the award date, noting he had not worked during that period. The Trust challenged this via a writ petition (OWP No. 796/2005) filed in 2005, leading to a stay on January 23, 2006. Proceedings continued ex parte against Chand Ram after 2024 due to his non-appearance.

Key Arguments from Both Sides

The Dharmarth Trust argued that it is not an 'industry' under Section 2(j) of the ID Act, as it was established by Maharaja Gulab Singh for maintaining Hindu religious places, endowments, temples, Sanskrit institutions, gaushalas (cow shelters), and pilgrim bhavans—activities they claimed were purely spiritual and charitable, not commercial. They contended Section 25F did not apply, distinguishing termination for misconduct from retrenchment, and alleged procedural lapses: their representatives were not allowed to appear before the Tribunal in 2003, leading to an ex parte award without jurisdiction. The Trust also invoked a prior ruling in OWP No. 60/2003 (J&K Dharmarth Trust Council v. State of J&K), where it was held not an 'establishment' for gratuity claims.

Chand Ram, in his objections, countered that the Trust engages in multifarious commercial activities, including owning markets like Karan Market (carved from Raghunath Temple land), hotels like Ranbir Yatri Hotel leased to private entities, and numerous shops on rent, generating profits. He argued this made the Trust an 'industry' with an employer-employee relationship. He highlighted the petition's delay (filed two years after the 2003 award), invoking laches, and noted the Trust's failure to challenge the 2003 reference or contest Tribunal proceedings, implying acquiescence. Chand Ram was proceeded ex parte in the High Court but his initial response stood.

Application of Legal Precedents and Principles

The court applied the 'Triple Test' and 'Dominant Nature Test' from the landmark Supreme Court case Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978) 2 SCC 213 to determine 'industry' status. This test assesses: (1) systematic and organized activity; (2) employer-employee cooperation; and (3) production or distribution of goods/services to satisfy human wants (excluding purely spiritual/religious ones).

Justice Chowdhary noted the Trust's activities—maintaining educational institutions (e.g., Sanskrit Maha Vidyalaya, Ranbir Research Institute), gaushalas, scholarships, and commercial ventures like leased properties—constitute organized, service-oriented operations, not selfless volunteering. Even surplus for charitable use does not exempt if activities are commercial or analogous to trade. The court distinguished spiritual roles (e.g., priests motivated by faith) from waged employees like safai workers.

Excerpt from judgment: "In view of the functional nature of its specific activities, the petitioner-Trust can be described to be an ‘industry’ under the Industrial Disputes Act, 1947 so as to subject the same to the provisions of the Industrial Disputes Act." The court rejected the prior gratuity ruling as factually distinct and emphasized the Trust's inaction on the reference barred later challenges.

On jurisdiction, the Tribunal's ex parte proceedings were upheld, as the Trust deliberately absented after initial appearances without proper authorization. Section 25F applied, treating the termination as retrenchment without notice or pay, given the industry status and workman relationship under Section 2(s).

Court's Final Decision and Implications

Dismissing the petition and connected applications, the High Court upheld the Tribunal's award in full, finding no jurisdictional error or misconception of law. "The impugned award does not call for any interference by this Court under its writ jurisdiction," the order stated.

This ruling has broad implications for religious and charitable trusts in India, clarifying that organized, remunerated activities (even alongside spiritual ones) attract ID Act protections. It reinforces worker rights against arbitrary terminations, potentially affecting similar institutions with commercial elements. For labour law practitioners, it underscores the nuanced application of the Triple Test post- Bangalore Water Supply , urging trusts to engage fully in disputes to avoid ex parte outcomes.

The judgment was reserved on December 4, 2025, and uploaded the same day it was pronounced.