IMPORTANT POINT
The Telecommunication Department of the Union of India is an industry within its definition contained in the existing unamended Section 2(j) of the Industrial Disputes Act, because it is engaged in a commercial activity and the Department is not engaged in discharging any of the sovereign functions of the State.

JUDGMENT

Verma, CJI.-Delay condoned.

Leave granted.

2. This matter comes up before a three-Judge Bench because of a Reference made by a two-Judge Bench which doubted the correctness of an earlier two-Judge Bench decision of this Court in Sub-Divisional Inspector of Post, Vaikam & Ors. v. Theyyam Joseph & Ors.1. It was stated at the Bar that a later two-Judge Bench decision reported as Bombay Telephone Canteen Employees Association v. Union of India2, also takes the same view as in the case of Theyyam Joseph.

3. The only point for decision in this appeal is whether the Telecom Department of the Union of India is an industry within the meaning of the definition of industry in Section 2(j) of the Industrial Disputes Act, 1947. It may here be observed that the amendment made in that definition in 1982 has not been brought into force by the Central Government by issuance of notification required for the purpose. It is, therefore, not necessary for us to consider whether the Telecommunication Department of the Union of India would be an industry within the meaning thereof in the amended provision which is not yet brought into force. We are, in this matter, concerned with the earlier definition of industry which continues to be in force and which was subject of consideration by a seven Judge Bench in Bangalore Water Supply & Sewerage Board v. A. Rajappa & Ors.3.

4. The above point arises for consideration out of a Reference made under Section 10A of the Industrial Disputes Act, 1947, which matter is now pending in the High Court. The contention of the appellant throughout has been that the Reference was incompetent since the Telecommunication Department of the Union of India is not an industry within the meaning of its definition contained in the existing un-amended Section 2(j) of the Industrial Disputes Act, 1947. Admittedly, this question has to be answered according to the decision of this Court in Bangalore Water Supply (supra) which is a binding precedent. The dominant nature test for deciding whether the establishment is an industry or not is summarised in para 143 of the judgment of Justice Krishna Iyer in Bangalore Water Supply case (supra) which is as under :

143. The dominant nature test:

(a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not workmen as in the University of Delhi case (supra) or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur (supra), will be the true test. The whole undertaking will be industry although those who are not workmen by definition may not benefit by the status.

(b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by government or statutory bodies.

(c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within Section 2(j).

(d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby."

5. It is rightly not disputed by the learned counsel for the appellant that according to this test the Telecommunication Department of the Union of India is an industry within that definition because it is engaged in a commercial activity and the Department is not engaged in discharging any of the sovereign functions of the State.

6. A two-Judge Bench of this Court in Theyyam Joseph s case (supra) held that the functions of the Postal Department are part of the sovereign functions of the State and it is, therefore, not an industry within the defini