AGRICULTURAL PRODUCE MARKET

COMMITTEE V. ASHOK HARIKUNI

Shivani Maheshwari
20151077
 • 7 temporary employees of an Agriculture Produce
Market Committee, following the termination of their
services, raised a dispute before the Labour Court.
• The Labour Court set aside their termination and
ordered their reinstatement
• The Market Committee challenged this decision before
FACTS the High Court on the grounds that the Labour Court
does not have jurisdiction to try the case as the Market
Committee is not an ‘industry’ within the meaning of
the Industrial Disputes Act, 1947
• Their claim was dismissed by the High Court.
Therefore, the present appeal has been filed before the
Supreme Court of India.
 Whether the Market Committee
was exercising sovereign
functions in order to be excluded
ISSUE from the definition of “industry”
as contemplated under the
Industrial Disputes Act, 1947?
 RULE

1. Merely because an enterprise is created by a statute does not exclude it from the purview of “industry”
under the Industrial Disputes Act, 1947

2. In order to determine whether any body created under a statute is an “industry” or not, the courts must
find the its pith and substance and the dominant object for which it is working.

Activities which can be undertaken by NGO’s, private persons or a company, cannot be construed to be
sovereign in nature or of an inalienable character. An enterprise performing such activities is not excluded from
the scope of “industry” under the Central Act.

3. Even if a statute confers on any statutory body, any function which could be construed to be “sovereign” in
nature, would not mean every other function under the same statute is also sovereign in nature.
 The Supreme Court in the given case followed
the decision of the Bangalore Water-Supply case
which stated ‘sovereign functions’ as an exception
to what amounts to an ‘industry’.

Therefore, the court continued the trend of

bestowing a liberal interpretation to the term
‘industry’. This is because the Industrial Disputes
ANALYSIS (1) Act, 1947 has been enacted to maintain peace
between employers and employees.

Thus, such a wide interpretation gives both the

employer and employee the opportunity to raise
an issue. However, at the same time it increases
ambiguity and exposes the act to misuse.
 The decision in the given case has clarified the
difference between sovereign and non-sovereign
functions of the State.

Such a split can be found by determining which

functions can be undertaken by a private body.
Those functions which cannot be undertaken by
ANALYSIS (II) a private body are the sovereign functions of the
State.

Therefore, this has provided some clarity on

determining whether an enterprise is an industry
or not. .
 Subsequent to this decision, the Supreme Court in
the case of Pratamsingh Narsingh Parma case opined
that ordinary departments of the government
cannot be held to be an industry and instead forms
part of its sovereign function.

In the absence of an assertion by the petitioner of

the job he has been recruited for and the nature of
the duties performed by him, it would be incorrect
ANALYSIS (III) to hold that the Forest Department of the State of
Gujarat is an ‘industry’.

However, this case can be distinguished from the

present case. The seven employees were appointed
temporarily as mistry, peon, watchman, etc. and are
therefore,, clearly not government servants.
C ASE
MAP
 The Supreme Court in the present case dismissed the
appeal filed by the Market Committee.

The wide definition of ‘industry’ has given an

opportunity to both the employer and the employee for
raising issues, with one trying to pull out of this
CONCLUSION definition, to be out of the clutches of the said Act, and
the other bringing within it, to receive benefit under it.

Because of this width of the periphery of the word

‘industry’ there is tug of war repeatedly between the
two, despite various decisions of this Court.
THANK YOU