Case Note & Summary
The case involves a challenge by M/s. Arihant Siddhi Co.Op. Hg. Soc. Ltd., a cooperative housing society, against an award passed by the Labour Court at Mumbai. The Labour Court had allowed a reference filed by Pushpa Vishnu More, a watchman employed by the society, ordering his reinstatement with full back wages and continuity of service. The society terminated More's services upon his reaching 60 years of age on 1 November 2000, claiming it was with mutual consent and after paying ex gratia/retirement benefits. More disputed this and raised a demand for reinstatement, arguing he was a permanent employee terminated without enquiry or retrenchment compensation. The society resisted the reference on the ground that it was not an 'industry' under Section 2(j) of the Industrial Disputes Act, 1947, and More was not a 'workman'. The Labour Court held that the society earned profits through additional income from members and thus fell within the definition of industry, making the reference maintainable. It then proceeded to decide the termination and relief issues in favor of More. The society challenged the award in the High Court, primarily on the ground that it was not an industry. The High Court, relying on its earlier judgment in M/s. Shantivan II Co. Op. Hsg. Society vs. Smt. Manjula Govind Mahida, held that a cooperative housing society is not an industry under Section 2(j) merely because it carries on some commercial activity as an adjunct to its main activity. The Court found that the society's predominant activity was providing housing to its members, and any additional income was incidental. Therefore, the Labour Court's finding of profit motive was insufficient to classify the society as an industry. Consequently, the High Court quashed the Labour Court's award and allowed the writ petition, holding that the reference was not maintainable.
Headnote
A) Industrial Law - Definition of Industry - Section 2(j) Industrial Disputes Act, 1947 - Cooperative Housing Society - The issue was whether a cooperative housing society that earns additional income from members as an adjunct to its main activity of providing housing services qualifies as an 'industry'. The Court held that such a society is not an industry under Section 2(j) because its predominant activity is not commercial; incidental commercial activity does not change its character. The Labour Court's finding of profit motive was insufficient to bring the society within the definition. (Paras 2-5) B) Industrial Law - Reinstatement and Back Wages - Cooperative Housing Society - The Labour Court had ordered reinstatement with full back wages and continuity of service for a watchman employed by the society. The High Court set aside the award on the preliminary ground that the society was not an industry, rendering the reference not maintainable. (Paras 2-5)
Issue of Consideration
Whether a cooperative housing society, which earns some additional income from its members, can be considered an 'industry' within the meaning of Section 2(j) of the Industrial Disputes Act, 1947.
Final Decision
The High Court allowed the writ petition, quashed the Labour Court's award, and held that the cooperative housing society is not an industry under Section 2(j) of the Industrial Disputes Act, 1947, making the reference not maintainable.
Law Points
- Cooperative housing society not an industry under Section 2(j) of Industrial Disputes Act
- 1947
- Incidental commercial activity does not make a society an industry
- Predominant activity test for determining industry status
