IMPORTANT POINT
Physical Research Laboratory is not an industry even though it is carrying on activity of research in a systematic manner with help of its employees.

Headnote:Industrial Disputes Act-Section 2(j)-Industry-Appellant was a research institute under the Government of India s Department of Space-It was engaged in pure research in space science-Research work was not connected with production supply or distribution of material goods or services-Knowledge so acquired was not marketable or had any commercial value-It was not engaged in an activity which could be called business trade or manufacture-It is not an industry.
Held : PRL is an institution under the Government of India s Department of Space. It is engaged in pure research in space science. What is the nature of its research work is already stated earlier. The purpose of the research is to acquire knowledge about the formation and evolution of the universe but the knowledge thus acquired is not intended for sale. The Labour Court has recorded a categorical finding that the research work carried on by PRL is not connected with production supply or distribution of material goods or services. The material on record further discloses that PRL is conducting research not for the benefit or use of others. Though the results of the research work done by it are occasionally published they have never been sold. There is no material to show that the knowledge so acquired by PRL is marketable or has any commercial value. It has not been pointed out how the knowledge acquired by PRL or the results of the research occasionally published by it will be useful to persons other than those engaged in such type of study. The material discloses that the object with which the research activity is undertaken by PRL is to obtain knowledge for the benefit of the Department of Space. Its object is not to render services to others nor in fact it does so except in an indirect manner. It is nobody s case that PRL is engaged in an activity which can be called business trade or manufacture. Neither from the nature of its organisation nor from the nature and character of the activity carried on by it, it can be said to be an undertaking analogous to business or trade. It is not engaged in a commercial industrial activity and it cannot be described as an economic venture or a commercial enterprise as it is not its object to produce and distribute services which would satisfy wants and needs of the consumer community. It is more an institution discharging Governmental functions and a domestic enterprise than a commercial enterprise. We are, therefore, of the opinion that PRL is not an industry even though it is carrying on the activity of research in a systematic manner with the help of its employees as it lacks that element which would make it an organisation carrying on an activity which can be said to be analogous to the carrying on of a trade or business because it is not producing and distributing services which are intended or meant for satisfying human wants and needs, as ordinarily understood. (Paras 12 & 13)

JUDGMENT

Nanavati, J.-Leave granted.

2. The question that arises for consideration in this appeal is whether Physical Research Laboratory (for short PRL ), the appellant, is an industry within the meaning of Section 2(j) of the Industrial Disputes Act.

3. The facts and circumstances which gave rise to this question are as follows. The respondent was appointed by PRL as Scientific Glass Blower on 25.10.48. He continued to work as such till 11.5.76 when he was transferred to Photography Documentation Services on a post which was non-technical and administrative. On 31.12.78 he attained the age of 58 years. He was, therefore, retired from service with effect from 1.1.79. Feeling aggrieved by his retirement at the age of 58 years and not at 60 he filed a writ petition in the High Court of Gujarat but it was withdrawn. He then filed a complaint before the Labour Commissioner who, on the basis thereof, made a reference to the Labour Court at Ahmedabad.

4. The Labour Court rejected the contention of the appellant that it was not an industry within the meaning of Section 2(j) of the I.D. Act. Though it recorded a finding that PRL is purely a research institute and the research work carried on by it is not connected with production supply or distribution of goods or services yet it took the aforesaid view following the decision of this Court in Bangalore Water Supply & Sewerage Board v. A. Rajappa1, as it further found that PRL is carrying on, in an organised and systematic manner, the activity of research in its laboratory by active co-operation between itself and its employees and the discoveries and inventions made would be eligible for sale. In taking the view that PRL is an industry it also followed the decision of the Gujarat High Court in Physical Research Laboratory Employees Union v. A.N. Ram2, a case under the Trade Union Act, wherein it was observed that "In view of the decision of the Supreme Court in Bangalore Water Supply & Sewerage Board v. A. Rajappa and others (supra), it is not open to doubt that the employees working with the Physical Research Laboratory Ahmedabad, would come within the definition of "workmen" under the Industrial Disputes Act and other similar legislation in the field of relations between employers and employees". On merits, it held that the respondent, having worked for a long period from 1948 to 1976 on a technical post, could not have been treated as a person working on the administrative side merely because towards the fag end of his career he was transferred to a post on the administrative side and at the time of attaining the age of 58 years he was working on such a post. The Labour Court held that the respondent was entitled to continue in service upto the age of 60 years. Therefore, the order, retiring him earlier, was declared as bad and it was held that he was entitled to reinstatement with full back wages. As the respondent had already completed the age of 60 years by then no order of reinstatement was passed but only back wages for those two years were ordered to be paid.

5. The appellant has approached this Court directly against the award of the Labour Court as the Gujarat High Court has already taken the view that PRL is an industry and different High Courts and Tribunals have expressed conflicting views on the question whether research institutes run by the Government can be said to be industry as defined by Section 2(j) of the I.D. Act. On 1.2.93, when Special Leave Petition, out of which this appeal arises, was listed for hearing a statement was made by the learned counsel for the appellant that irrespective of the decision on merits this Court should decide whether research institute of the type of PRL can be said to be industry . This Court passed an order for issuing notice indicating that the matter will be finally disposed of at the notice stage itself.

6. Our attention was first drawn by the learned Attorney General who appeared for the appellant to the facts

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1997 Supreme(SC) 669

IMPORTANT POINTPhysical Research Laboratory is not an industry even though it is carrying on activity of research in a systematic manner with help of its employees.

Cases Referred (4)

IMPORTANT POINT
Physical Research Laboratory is not an industry even though it is carrying on activity of research in a systematic manner with help of its employees.