Today, On 16th February, The Supreme Court will hear the long-pending 9-judge bench reference on the meaning of industry under Section 2(j) of the Industrial Disputes Act on March 17. The CJI said, “This is the first matter in this court before a nine-judge bench. And I want to start CVs from this very matter. The first, we’ll go by schedule, hopefully.”
The Supreme Court has decided to take up the long-pending 9-judge bench reference on the meaning of the term industry under Section 2(j) of the Industrial Disputes Act, 1947, on March 17.
Bench led by Chief Justice of India Surya Kant, along with Justice Joymalya Bagchi and Justice Vipul Pancholi, noted that several wide-ranging questions arise in this matter.
Beginning the discussion, the CJI made an important remark that reflects the significance of this hearing.
The Bench remarked,
“A substantial part of case management for this case stands concluded. We grant further liberty to the parties to update their written submissions or submit additional fresh written submissions on or before Feb 28, 2026.”
Additionally, it indicated that the nodal counsel representing both sides must provide a new set of compilations, pleadings, documents, and evidence.
The petitioners will have 3 hours to present their arguments, followed by an extra hour for their rebuttals.
The Court stated,
“The nodal counsel in consultation with Senior or other counsels shall prepare an inter se arrangement to ensure arguments are completed within the stipulated timeline. The party shall follow the circular issued by registry,”
This reference challenges the expansive interpretation given in the 1978 Bangalore Water Supply judgment, where a 7-judge bench had ruled that even government departments and public undertakings could fall within the definition of “industry”.
The issue has been pending for nearly two decades. Back in 2005, a five-judge bench headed by Justice N. Santosh Hegde had referred the correctness of the Bangalore Water Supply ruling to a larger bench in the case of State of Uttar Pradesh v. Jai Bir Singh.
Later in 2017, a 7-judge bench examined the matter again and decided that only a 9-judge bench could reconsider a judgment that was originally delivered by a 7-judge bench.
The Constitution Bench will examine the validity of the seven-judge Bench ruling in the case of Bangalore Water Supply & Sewerage Board (BWSSB) v. R Rajappa & Others, delivered in 1975.
The Bench will also address the following questions:
- Does the test established in paragraphs 140 to 144 by Justice V. Krishna Iyer in BWSSB regarding whether an enterprise qualifies as an industry represent the correct legal standard?
- Did the Industrial Disputes Amendment Act of 1982 come into effect, and what legal significance does the industry code hold regarding the term “industry”?
- Can social welfare initiatives or programs conducted by government departments or their agencies be classified as industrial activities under the Industrial Disputes Act?
- What specific state activities fall under the scope of the Industrial Disputes Act, and do any of them fall outside the definition provided in Section 2(j) of the Act?
In BWSSB, the Court established a triple test to determine if an enterprise is classified as an “industry,” thus making it subject to labor laws.
The judgment states,
“An organisation is an industry if it engages in systematic activity, organised cooperation between employer and employee and production and/or distribution of goods and services to satisfy human wants and wishes.”
This ruling effectively extended labor law protections including the rights to unionization and collective bargaining to workers in various sectors, such as clubs, hospitals, and educational institutions.
Case Title: STATE OF U.P. Vs JAI BIR SINGH C.A. No. 897/2002
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