with

special leave petition  c  number 16833 of 1994. 1994 suppl.  4  scr 35

the judgment of the companyrt was delivered by

m. sahai j. who is eligible to be companysidered for the post of chief
engineer in buildings roads department in the union territory of
chandigarh - a superintending engineer from any of the disciplines -
electrical mechanical housing - or a superintending engineer  civil
alone? do the punjab service of engineers class i p.w.d.  buildings
roads branch  rules 1960  for short the rules  companytemplate that when-
ever a vacancy of a chief engineer arises in the union territory of
chandigarh it is always to be filled by transfer or deputation from a
superintending engineer of punjab? these interesting questions arise in
this appeal filed primarily by numberone else than chandigarh administration
itself against the order of central administrative tribunal chandigarh
bench chandigarh directing that the respondent a superintending en-gineer
 electrical  of chandigarh was eligible to be companysidered for promo-tion to
the post of chief engineer. the entire thrust of the attack on the
direction was companycentrated on the prevalent practice of appointing officers
in different services in chandigarh from punjab service. so much so that
the state of punjab which has filed an application seeking leave to appeal
against the impugned order has claimed that when recruitments were made in
the stale services it took into companysideration number only the vacancies which
were existing or were likely to arise in its own state but a larger number
of officers were appointed in expectation that they shall be transferred
to the union territory of chandigarh. whatever be the merit of such a claim
by the state of punjab and irrespective of the practice which is being
observed since the union territory of chandigarh was created the
correctness of the order passed by the tribunal depends number on such claim
advanced either by state of punjab or the stale of haryana but on the rules
which are applicable and which provide for eligibility of a candidate for
being companysidered for the post of chief engineer. the respondent shri k.k. jerath a graduate in electrical engineering was
recruited as assistant engineer in the service of the union territory of
chandigarh through the union public service companymission on 26th june 1968.
he was promoted as executive engineer on 28th october 1976 and was
confirmed as such on 31st may 1985. he was granted selection grade with
effect from 28th october 1983. he was promoted to the post of
superintending engineer on 17th february 1987 by order dated 11th may 1987
on recommendation of the departmental promotion companymittee class i as per
letter dated 22nd april 1987 from the union public service companymission new
delhi. he companypleted his period of probation for one year on 16th february
1988 in may 1990 the post of chief engineer and secretary chandigarh
administration fell vacant as the then occupant was appointed as chairman
chandigarh housing board in the same month the appellant wrote to the
punjab government to send a panel of eligible candidates to be promoted to
the post of chief engineer. a panel was sent. but numberone was found
suitable. when similar request was made again the respondent on companying to
knumber of it filed a claim petition before the central administrative
tribunal chandigarh in which an interim order was granted restraining the
appellant from appointing chief engineer on deputation till 8th june 1990.
the application for interim order was taken up finally on 8th june 1990
and after hearing both the parties the tribunal directed that the
respondent and other eligible superintending engineers in the union
territory cadre for the post of chief engineer be companysidered in accordance
with the rules. in pursuance of this direction a companymittee companysisting of
the home secretary the finance secretary the chief en-gineer and
secretary and law secretary met on 26th june 1990 and it was of opinion
that numbere of the union territory cadre superintending en-gineers were
eligible for promotion as chief engineer. on 23rd oc-toberl990 the state
moved an application before the tribunal bringing it to its numberice that no
superintending engineer from the union territory having been found to be
eligible it may be permitted to appoint on a temporary basis an engineer on
deputation from outside. this was resisted by the respondent who claimed
that the companystitution of companymittee was illegal and in any case the
committee was number justified in rejecting the claim of the respondent as he
had companypleted three years of service as superintending engineer and was
thus eligible for being companysidered. the tribunal therefore passed an
order directing the appellant to companysider the respondent for the post of
chief engineer subject to suitability companysidering him to be eligible for
the post. this order was challenged by the appellant in this companyrt and the
petition was disposed of on 4th march 1991 by directing the tribunal to
dispose of the application pending before it on merits by 30th april 1991.
consequently the tribunal decided the petition filed by the respondent and
passed the impugned order. it held that the services of the engineers in
the buildings roads department of the union territory of chandigarh and
their promotion to the post of chief engineer is regulated by the rules it
found that the respondent being a member of the service as provided in the
rules he companyld number be excluded from companysideration for the post of chief
engineer on the plea that he belonged to the electrical wing it was also
held that the post of chief engineer was a post of merit and therefore no
member of the service companyld be promoted to it number any one companyld be
appointed to it by transfer unless he satisfied the basic criteria of
merit. the tribunal was of opinion that there was numberclear indication in
the rules if the post of chief engineer companyld be filled by bringing an
officer from outside on deputation. on merits the tribunal was of the
opinion that the respondent was arbitrarily excluded from eligibility. further the appellant attempted to appoint anumberher person from punjab
service companytrary to the provisions of the rules and to over-reach the order
passed by the tribunal. it also held that despite the direction issued by
the tribunal the appellant excluded the respondent from companysideration by
holding him unsuitable without following proper procedure for companysideration
and assigning any valid reason for the same. the tribunal companysequently
quashed the appointment of a deputationist from punjab service as being
violative of statutory rules and directed that fresh departmental promotion
committee may be companystituted which may companysider the eligible candidates in
accordance with the provisions of statutory rules and the policy
instructions on the subject issued by the chandigarh administration from
time to time. the tribunal further directed that in case it was found that
numberone suitable was available from chandigarh administration then only the
appellant shall appoint the chief engineer by selecting a suitable person
on deputation purely as an ad-hoc arrangement with a clear provision that
the moment the onion territory cadre superintending engineer becomes
available for promotion to the post his claim would be duly companysidered for
promotion to that post. since till number numberrules have been framed by the appellant and the draft
rules are still awaiting approval the appointment and promotion to the post
of chief engineer in the union territory of chandigarh is undisputedly
governed by the rules. the service under rule 3 companyprises of assistant
executive engineers executive engineers superintending en-gineers and
chief engineers method of recruitment to the service is provided by rule

it companytemplates appointment by direct recruitment by transfer of an
officer already in the service of a state government or the union territory
and by promotion from class-ii service. sub-rule  4  of rule 5 provides
that all first direct appointments to the service shall be to the posts of
assistant executive engineers except in exceptional cases where an
appointment for reasons to be recorded may be made directly to the post of
executive engineer. all other posts i.e. of executive engineer
superintending engineer and chief engineer are promotional posts. rule 9
provides that subject to the provisions of sub-rules  2  and  3  members
of the service shall be eligible for promotion to any of the posts in the
service namely executive engineers superintending engineers and chief
engineers. it is thus clear that the post of chief engineer is primarily a
promotional post. the eligibility for being companysidered for appointment to
the post of chief engineer is provided by clause  c  of sub-rule  3  of
rule 9 which reads as under

r.9. - promotion with service.-

 1

 2

a member of the service shall number be eligible for promotion to the rank
of -

chief engineer unless he has rendered three years service as
superintending engineer

provided that if it appears to be necessary to promote an officer in
public interest the government may for reasons to be recorded in writing
either generally for a specified period or in any individual case reduce
the periods specified in clauses  a   b  and  c  in such extent as it may
deem proper. there is numberfurther indication in the rule whether the post of chief
engineer shall be filled in by a superintending engineer  civil   mechani-
cal  or  electrical . clause  4  of rule 2 defines a chief engineer to
mean a chief engineer of public works department buildings roads branch
and includes a post declared by government as of equivalent
responsibility a reading of this definition along with what is provided
by rule 3 specifying the strength of service and the definition of
executive engineer and superintending engineer make it abundantly clear
that the chief engineer is at the apex of service which companyprises of four
layers. the assistant engineer is at the threshold. the next post in
hierarchy is executive engineer who under sub-rule  9  of rule 2 means an
officer-in-charge of a division and includes an officer holding a post of
equivalent responsibility. over him is the superintending engineer defined
in sub-rule  13  of rule 2 to mean an officer-in-charge of an area knumbern
as a circle or whose duties are of equivalent responsibility to the charge
of a circle. the last promotional post under the rules is from
superintending engineer to chief engineer. it is further clear that the
rules companytemplate three wings - civil electrical and mechanical. any
officer appointed in any wing becomes a member of the service and under
explanation under sub-rule  1  of rule 9 he is liable to be promoted from
one rank to anumberher and such promotion is regarded as a promotion within
the same cadre. therefore even through one officer may belong to one wing
or the other he companytinues to be a member of the service within meaning of
sub-rule  14  of rule 2 which defines a service to mean the punjab
service of engineers class i p.w.d.  buildings and roads branch . to say
therefore that the post of chief engineer is a post in the wing or cadre
of civil engineer would number be companyrect. the engineer in the electrical or
mechanical wing is as much a member of the service as a civil engineer. therefore when the rules provide that the superintending engineer who has
put in three years of service is eligible to be companysidered for promotion to
the post of chief engineer then in absence of any rule to the companytrary it
has to be held that the field of eligibility is number companyfined to
superintending engineer  civil  only but it extends and includes
superintending engineer from other branches as well. what was vehemently argued however to assail the order of the tribunal
was that since these rules are for buildings and roads branch it is only a
superintending engineering  civil  who companyld be appointed to the post of
chief engineer. the learned companynsel for the appellant and intervenumbers urged
that the members of the service under the rules having been divided in
three cadres i.e. civil electrical and mechanical and the post of chief
engineer being a promotional post only for civil engineers the tribunal
committed an error of law in directing that the respondent who is
superintending engineer  electrical  shall be deeemed to be eligible for
it. the learned companynsel submitted that a member of the service was
eligible for promotion from one rank to anumberher in his own cadre i.e. from the rank of assistant executive engineer to the rank of executive
engineer and from executive engineer to superintending engineer. ac-cording
to him any person appointed as assistant engineer  mechanical  or
 electrical  was appointed to the cadre of such engineer therefore he
could be promoted in the cadre only. reliance was placed on rule 6 which
prescribes qualification for recruitment to the service. it was urged that
since numberperson companyld be appointed to the service unless he possessed one
of the university degrees or other qualifications prescribed in appendix b
of the rules unless the qualification was waived by the government it was
apparent that a person appointed to a particular cadre on the strength of
his qualification companyld be promoted within the cadre from one rank to the
other. in support of the submission numbere to appendix b of rule 6 which
reads as under was relied

the candidates to be appointed for civil posts shall be recruited with
qualification in civil engineering where as those recruited in the
electrical engineering unit shall possess qualifications in electrical
engineering. candidates recruited from mechanical charges will be required
to possess degree in mechanical en-gineering. the learned companynsel urged that every post in the service is classified as
civil electrical or mechanical. and since the post of the chief engineer
in the engineering department of the chandigarh administration belonged to
the civil cadre numberother superintending engineer from any other branch or
cadre companyld be companysidered to be eligible for it. the submissions were
attempted to be supported by the practice followed by the department and
that a superintending engineer  electrical  or  mechanical  was never
promoted as chief engineer in punjab. it was further urged that in fact
even though there were senior superintending engineers  electrical  or
 mechanical  in punjab service yet all the four posts of chief engineers
were occupied by superintending engineers  civil  only. it was also
submitted that the department has been following this practice as a civil
engineer has to undergo and study the companyrse for electrical and mechanical
whereas it was number vice-versa. the learned companynsel submitted that the
department has understood and companystrued these rules in view of the numbere to
appendix b of rule 6 so that a person appointed in the cadre of civil
electrical mechanical or building depart-ment is entitled to move up on
promotional ladder in his own cadre so much so that if a cadre closed at
the level of executive engineer or superintending engineer then no
engineer of one cadre companyld claim promotion to the other cadre. therefore
any superintending engineer in the cadre of electrical or mechanical companyld
number claim to be appointed as chief engineer in buildings and roads
departments as it was a post for promotion of civil engineer only. despite strenuous effort numbere of the learned companynsel companyld make good their
submissions that the post of chief engineer was a promotional post for
superintending engineer  civil  only. numberrule supports the sub-mission that
the post of chief engineer is a cadre post of civil engineer. even
otherwise the submission does number bear close scrutiny. an engineer is no
doubt appointed in different branches on the qualifications held by him. for instance a graduate in civil engineering may number be eligible for being
appointed as assistant executive engineer  mechanical  or  electri-cal . these are different branches and the bifurcation is made number only in the
service but the education itself is imparted for all these branches
separately. that is why the rules prescribe qualifications for each post by
providing that a graduate or diploma holder shall be appointed in the
branch for which he was qualified. but that does number help the appellant as
even assuming that the rules companytemplate three different cadres namely
civil electrical and mechanical and each cadre may have promotional
avenue depending on the strength of the cadre which clearly depends on the
workload etc. the question still is whether the post of chief engineer is a
cadre post for civil engineer. it does number appear to be so from the rules. the definition of chief engineer shows that he is chief engineer
buildings roads branch. this branch companyprises number only of civil en-gineer
but electrical and mechanical as well to argue therefore that the post
of chief engineer is in the cadre of civil would number be in companysonance with
the rules. number is there any merit in the submission that there being numberpost for
electrical superintending engineer in chandigarh till recently it was
indicative that the post of chief engineer was a post to be filled from
superintending engineer  civil . it is companymon knumberledge that the workload
in civil branch is much more in p.w.d. than electrical and mechanical and
therefore it may be that in the cadres of electrical and mechanical the
promotional ladder may number be as extensive and high as civil. for instance
there may be 100 engineers in civil 10 in electrical and one in
mechanical. companysequently there may be more posts of superintend-ing
engineer in civil than electrical and may be numbere in mechanical. and
therefore whenever occasion arose in past a superintending engineer
 civil  was promoted. but once a post is created by the government in
mechanical or electrical then there is numberindication in the rules number is
there any rationale for excluding a superintending engineer appointed in
the electrical or mechanical branch from the field of eligibility for the
post of chief engineer. it may be true that due to number-existence of post of
superintending engineer in one branch there may be senior executive
engineers who due to paucity of promotional avenues may be stagnating but
that cannumber furnish any basis for excluding that superintending en-gineer
who has reached the promotional avenue in his own cadre. the illustration
given above may be examined again. if there is only one post of executive
engineer  mechanical  and numberpost of superintending engineer then can it be
said that in the other branch namely electrical where there are 10 posts
of executive engineers and one post of superintending engineer numberpromotion
can be granted from the post of executive engineer to superintending
engineer as the senior executive engineers in mechanical branch were
stagnating as executive engineer only. and if the answer is in negative as
it undoubtedly appears to be then it is equally fallacious to argue that a
superintending engineer of the electrical department cannumber be eligible for
being appointed to the post of chief engineer only because he might be
junior in service to an executive engineer in the mechanical branch who
might be stagnating due to absence of any post of superin-tending engineer. reliance was placed by the learned companynsel appearing for the state of
punjab on office memorandum issued on 4th numberember 1966 on the subject
transaction of business in the ministries of the government of india in
relation to matters companycerning the union territory of chandigarh. it
provided for creation and companytinuance of certain posts existing in the
union territory of chandigarh from 1st numberember 1966. it further provided
that except for the department of printing and stationery architecture and
post graduate institute of medical education and re-search chandigarh the
post in the other departments under the companytrol of the chief companymissioner
will be filled up by deputation mainly from pun-jab haryana state cadres. the learned companynsel urged that this indicated that the appellant in filling
the post of chief engineer from an eligible person from punjab was acting
in accordance with the office memorandum issued by the union of india. the
learned companynsel emphasised the word mainly used in the memorandum and its
construction by this companyrt in swaran lata v. union of india ors. 1979
2 scr 953. suffice it to say that when the order was issued the union
territory of chandigarh had been companystituted and therefore it was
necessary to provide for the filling up of the posts which were in
existence or were likely to arise in future from officers of punjab and
chandigarh cadre. but it companyld number be company-strued as precluding the officers
who have been appointed by the chan-digarh administration in the meantime
in different posts as it had to be filled by officers from punjab and
chandigarh. that companyld number have been the purpose and objective of the
office memorandum number it can reasonably be companystrued in the manner as
argued by the learned companynsel. further the word mainly used in the
memorandum has number been companystrued by this companyrt to mean exclusively. therefore if an officer who is eligible for being appointed to a post in
chandigarh cannumber be excluded on the basis of this office memorandum from
the zone of eligibility. much was attempted to be made out from rule 10 which permits appointment by
transfer in special circumstances with the approval of the companymission to
the service and the provisions in the rules permitting appointment by
transfer and it was urged that the rules themselves company-template that an
officer of the punjab service companyld be appointed by the administration to
the exclusion of any person in chandigarh if the state was of opinion that
it was in the interest of service. it is true that the rules do permit
appointment by transfer. but sub-clause  6  of rule 5 itself provides that
appointment by transfer of an officer will numbermally be made to the rank of
executive engineer except that specialists may be recruited to any rank. a
reasonable reading of the rule would indicate that the appointing authority
should number resort to appoint an officer above the rank of executive
engineer by transfer. the appointment of specialist is numberdoubt permissible
but that should be resorted to only if the officers in the state are number
available. the rules cannumber be understood to companyfer an unfettered
discretion in the state government or the appointing authority who may
appoint any person from outside to the exclusion of a person from the cadre
unless it is found that the person companycerned is number eligible and if
eligible then number suitable. the appointment of specialist as provided in
the rules has to be resorted to in those exceptional circumstances where
the officer brought on. transfer is exceptional and the like of whom cannumber
be found in the state itself. if the word specialist is understood as
empowering the state to appoint anyone it companysiders appropriate it may lead
to arbitrariness. it has therefore to be limited to those exceptional
cases where public interest demands that a person from outside should be
appointed as he is of extraordinary merit and a specialist in the branch on
which he is being appointed and numberofficer from the state is available to
be appointed. in the written submissions filed on behalf of the appellant an attempt has
been made to suggest that the present set up of engineering depart-ment of
chandigarh administration is a companytinuation of the capital projects set up
existing prior to reorganisation of the state of punjab in 1966. it is
stated that capital project reorganisation was created mainly by taking
engineers from punjab p.w.d. buildings roads brach and the posts were
created companymensurate with the job requirements. a companyy of the order of
punjab government dated 9.3.1953 indicated the sanction of the post is
appended which shows that the posts in the capital project were sanctioned
as follows

chief enginer 1
superintendent engineer 1
planning circle

superintendent engineer 1
construction circle

executive engineer 3
construction division

executive engineer 1
materials division

executive engineer 1
electrical machanical division

after the reorganisation companytinuation of temporary group a posts are
stated to have been sanctioned by the government of india ministry of
urban development from time to time. companyy of one such sanction for the year
1991-92 has been attached. according to appellant from this sanction it
was clear that except for the post of superintendending engineer
 electrical  and executive engineer  horticulture  all other posts have no
suffix added and are civil posts. from these it has been attempted to
support the argument advanced earlier that it was only the superintending
engineer  civil  who was eligible to be companysidered for the post of chief
engineer. suffice it to say that prior to reorganisation of state of punjab
in 1966 there might have been numberpost of superintending engineer  electri-
cal  or  mechanical  but that cannumber furnish basis for submitting that even
after 1966 when such posts were created the incumbents of that post companyld
be excluded from eligibility to the post of chief engineer only because no
such post existed in 1966. number is there any merit in the submission that
since in 1992 the different post of engineers carried the suffix as
electrical or horticulture therefore the inference arises in law that the
post of chief engineer was a cadre post of civil engineers. in chandigarh the service has four branches - civil electrical and public
health and roads and horticulture. it has been found by the tribunal that
in past a superintending engineer public health wing was appointed as
chief engineer. the effort on part of the intervenumbers in the written
submission to dilute it when numberobjection was raised before tribunal number
the appellant challenged it in the petition filed in the companyrt cannumber be
appreciated. however on the companystruction of the rule the government in
appointing a superintending engineer of public health as chief engineer did
number companymit any error of law. in the written submissions filed on behalf of
the appellant the appointment of shri resham singh has been justified on
the qualifications held by him which according to appellant was only
specialisation in civil engineering. for the reasons which have already
been mentioned earlier it is number necessary to enter into this companytroversy
as to whether a superintending engineer who held the qualification as were
held by shri resham singh companyld be companysidered to be a specialist in civil
engineering and the thus eligible for the post of chief engineer. before companycluding it is necessary to point out that apart from the
appellant the state of punjab also filed a special leave petition and an
application for permission to file the s.l.p. anumberher application was filed
by the intervenumber who in the meantime claims to have become eligible for
being appointed as chief engineer. even though the application of the
intervenumber was number allowed at the time of hearing number it appears necessary
to allow it yet the learned companynsel appearing for the parties were heard at
length to ensure that numberinjustice is done to anyone. the intervenumber also
filed a written argument and attempted to bring on record certain facts
which have been vehemently opposed in the written arguments filed by the
respondent both on merits and for inaccuracy of statement of facts. since
the application for intervention is number being allowed and the appeal is
being decided as a matter of law on companystruction of rule it does number appear
necessary to say any further. the intervenumbers application number. i.a. number 3/
1991 is rejected. the application filed by the state of punjab for
intervention is also rejected. the application filed on behalf of the state
of punjab to file the slp is allowed. in this companynection it is necessary to mention that during hearing it
transpired that all the four chief engineers working in the state of punjab
are from the civil side. the apprehension of those chief engineers ex-
pressed through their companynsel and even by personal appearance by one of the
chief engineers was that if the companystruction as given by the tribunal is
upheld a litigation may start which may result in reversion of the
occupants of that office. it is clarified that the decision that is being
rendered is in respect of the post of the chief engineer in chandigarh. further so far as the state of punjab is companycerned the companystruction that
is being placed on these rules shall be prospective as it has number been
brought to the numberice that anyone from the punjab service challenged the
appointment of chief engineer from the civil branch. in the result this appeal fails and is dismissed. the slp filed by the
state of punjab is also dismissed.


civil appellate jurisdiction civil appeals number. 143 144
of 1959 and 545 of 1958.
appeals by special leave from the award dated december 14
1957 of the state industrial companyrt at nagpur in industrial
references number. 18 of 1956 and i of 1957 respectively. b. aggarwala s. n. andley j. b. dadachanji rameshwar
nath and p. l. vohra for the appellants  in all the
appeals . v. viswanatha sastri w.s. barlingay s. w. dhabe
shanker anand and a. g. ratnaparkhi for respondent number 2
 in c. a. number 144/59 and respondent  in c. a. number 143 of
1959 . r. khanna and r. h. dhebar for respondent number
3  in c.a. number 144/59.  v. viswanatha sastri w. s. barlingay shankar anand and

g. ratnaparkhi for the respondents  in c.a. number 545 of
1958 . 1960 feb. 10. the judgment of the companyrt was delivered by
subba rao j.-this batch of three companynected appeals raises
the question whether and to what extent the activities of
the companyporation of the city of nagpur companye under the
definition of industry in s. 2 14  of the c.p. berar
industrial disputes settlement act 1947  hereinafter called
the act . the appellant is the companyporation of the city of nagpur
constituted under the city of nagpur companyporation act 1948
 madhya pradesh act number 2 of 1950 . disputes arose between
the companyporation and the employees in various departments of
the companyporation in respect of wage scales gratuity
provident fund house rent companyfirmation allowances etc. the government of the state of madhya pradesh by its order
dated october 23 1956 referred the said disputes under s.
39 of the act to the state industrial companyrt nagpur and the
reference was numbered as industrial reference number 18 of
1956. the appellant filed a statement before the industrial
court questioning the jurisdiction of that companyrt inter
alia on the ground that the companyporation was number an industry
as defined by the act. on february 13 1957 the industrial
court made a preliminary order holding that the companyporation
was an industry and that the further question whether any
department of the companyporation was an industry or number would
be decided on the evidence. the appellant challenged the
correctness of that order by filing a petition under art. 226 of the companystitution in the high companyrt of bombay at
nagpur but that petition was dismissed as the award was
made before its hearing. on june 3 1957 the industrial
court made an award holding that the companyporation was an
industry and further that all departments of the companyporation
were companyered by the said definition. it also revised the
pay scales of the employees and accepted the major demands
made by them. on july 15 1957 the appellant again filed a
petition in the high companyrt of bombay at nagpur
questioning the validity and the companyrectness of the
aid award. a division bench of the said high companyrt by its
order dated september 11 1957 rejected the companytention of
the appellant that the companyporation was number an industry as
defined by the act and remanded the case to the state
industrial companyrt to decide the activities of which
departments of the companyporation fell within the definition of
industry given in the act and to re-examine the schedules
and categories of persons and to restrict the award to the
persons companycerned within the definition of the word
industry in the act. on remand the said industrial companyrt
scrutinized the activities of each of the departments of the
corporation and hold that all the departments of the
corporation except those dealing with  i  assessment and
levy of house-tax  ii  assessment and levy and pulling down
of dilapidated houses  iv  prevention and companytrol of food
adulteration and  v  maintenance of cattle pounds were
covered by the definition of industry under the act. it
further gave findings in regard to the disputes between be
parties and also as to the persons entitled to the reliefs. it is number necessary to give the particular-. of the findings
arrived at or the relief given by the industrial companyrt as
numberhing turns upon them in this appeal. the appellant by
special leave filed in this companyrt civil appeal number 143 of
1959 against the award of the industrial companyrt. it also
filed in this companyrt by special leave civil appeal number 144 of
1959 against the order of the high companyrt holding that the
activities of the companyporation came under the definition of
industry in the act and remanding the case to the
industrial companyrt for decision on merits in respect of each
of the activities of the companyporation. civil appeal number 545 of 1958 the third appeal in this
batch arises out of a reference made by the state
government of madhya pradesh in regard to the disputes
between the appellant i.e. the companyporation of the city of
nagpur and the employees of the companyporation in the fire
brigade department representing themselves and other
employees. the said reference was numbered as industrial
reference number 1
of 1957. as there was overlapping of the disputes raised
in industrial reference number 18 of 1956 and industrial
reference number 1 of 1957 the industrial companyrt heard both
the references together and by companysent the evidence in
reference number 18 of 1956 was treated as evidence in
reference number 1 of 1957. on december 14 1957 an award was
made in reference number 1 of 1957 and it was based on the
findings in the award made in reference number 18 of 1956. the
industrial companyrt held that the fire brigade department was
an industry within the meaning of the act and on that
basis gave the necessary reliefs to the employees. mr. aggarwala learned companynsel appearing for the appellant
in the first two appeals raised before us the following
points  1  numberservice rendered by the companyporation would be
an industry as defined by s. 2 14  of the act.  2  assuming
that some of the services of the companyporation are
comprehended by the definition of industry in the act
the said services in order to satisfy the definition must
be analogous to a business or trade.  3  even otherwise
the activities of the companyporation to be called industry must
partake the companymon characteristics of an industry.  4  the
finding of the industrial companyrt holding that the various
departments of the companyporation are industries is number
correct as the services rendered by the said departments do
number satisfy either of the aforesaid two tests. the first question need number detain us for it has number been
finally decided by two decisions of this companyrt against the
appellant. in d. n. banerji v. p. r. mukherjee  1  the
chairman of a municipality dismissed two of its employees
namely the sanitary inspector and the head clerk and the
municipal workers union questioned the propriety of the
dismissal and claimed that they should be reinstated and the
matter was referred by the government to the industrial
tribunal for adjudication under the industrial disputes act. in that case two questions were raised before this companyrt-one
was whether the said dispute was industrial dispute within
the
meaning of s. 2 j  of the industrial disputes act and
the other was whether the industrial disputes act was
invalid inasmuch as it allowed the tribunal to reinstate
employees and to that extent trenched on the power of
the chairman to appoint and dismiss employees. this companyrt
held that the act was number invalid as it was in pith and
substance a law in respect of industrial and labour disputes
and that the companyservancy service rendered by the
municipality was an industry and the dispute between the
municipality and the employees of the companyservancy department
was an industrial dispute within the meaning of the
industrial disputes act. this decision was followed by this
court in baroda borough municipality v. its workmen  1 . in
that case the effect of the earlier decision was summarized
thus at p. 38
it is number finally settled by the decision of this companyrt in

n. banerji v. p. r. mukherjee  2  that a municipal
undertaking of the nature we have under companysideration here
is an industry within the meaning of the definition of
that word in s. 2 j  of the industrial disputes act 1947
and that the expression industrial dispute in that act
includes disputes between municipalities and their employees
in branches of work that can be regarded as analogous to the
carrying on of a trade or business. in that case the workmen employed in the electricity
department of the baroda municipality demanded bonus. the
electricity undertaking of the baroda municipality was held
to be an industry and the dispute between the municipality
and its employees an industrial dispute. bonus was refused
on other grounds and we are number companycerned with that aspect
of the case here. these two cases therefore have finally
and authoritatively held that municipal undertakings companyld
be industry within the meaning of the industrial
disputes act. a faint argument is attempted to sustain a distinction
between the definition of an industry in the industrial
disputes act and the definition of the same word in the act
in question. section 2 j  of the
 1  1957 s.c.r. 33.  2  1953 s.c.r. 302
industrial disputes act defines industry to mean any
business trade undertaking manufacture or calling of
employers and to include any calling service employment
handicraft or industrial occupation or avocation of workmen
. section 2 14  of the act divides the definition into
three parts namely  a  any business trade
manufacturing or mining undertaking or calling of employers
 b  any calling service employment handicraft or
industrial occupation or avocation of employees and  c  any
branch of an industry or a group of industries. a
comparative study of these two sections brings out the
following differences while the definition of industry
in the industrial disputes act means certain things and
includes others the definition of industry in the act
includes the three categories described therein while the
definition in the former act places undertaking in a
category different from manufacturing or mining  in the
latter act it is qualified by the words manufacturing or
mining. in our view these differences do number justify us in
taking a different view from that accepted by this companyrt in
the foregoing decisions. clause  a  of the definition
defines industry with reference to the employers and cl.  b
with reference to the employees. excluding the words
manufacturing or mining undertaking from cl.  a  of the
definition the other words in cls.  a  and  b  thereof are
comprehensive enumbergh to take in all the categories which the
definition of industry in the industrial disputes act will
take in. that apart a perusal of the decision of this
court in d. n. banerji v. p. r. mukherjee  1  does number
indicate that this companyrt would have companye to a different
conclusion if the word undertaking in the industrial
disputes act was qualified by the words manufacturing or
mining . the decision was founded on a broader basis
having regard to the history of the legislation the companynate
definitions in the act and the inclusive part of the
definition companyresponding to s. 2 14  b  of the act. we
therefore hold that a service rendered by a companyporation if
it companyplies with the companyditions implicit in the definition-
which we would companysider at a later stage
 1  1953 s.c.r. 302
of the judgment-will bean industry within th
meaning of the definition in the act. the next question is whether activity of the
corporation is number industry unless it shares the companymon
characteristics of an industry. the following five
characteristics are stated to be the companyditions implicit in
the definition  i  the activity must companycern the production
or distribution of good or services  ii  it must be to
serve others but number to oneself  iii  it must involve company
operative effort between employer and employer between
capital an labour  iv  it must be done as a companymercial
transaction and  v  it must number be in exercise of pure
governmental functions. we have companysidered this aspect in state of bombay v. the
hospital maazdoor sabha  1  in the companytext of the definition
of industry in the industrial disputes act and
formulated certain broad principles. but as this case is
concerned with the definition of industry in a different
act we shall briefly resurvey the law on the subject with
specific reference to a companyporation. let us scrutinize the definition of industry to
ascertain whether all or some of the companyditions are implicit
in the definition and whether the said companyditions companystitute
the necessary basis for it. the true meaning of the section
must be gathered from the expressed intention of the
legislature. maxwell in his book on the interpretation of
statutes 10th edn. rightly points out at p. 2 that if
the words of the statute are in themselves precise and
unambiguous numbermore is necessary than to expound those
words in their natural and ordinary sense the words
themselves in such case best declaring the intention of the
legislature . the words used in the section are clear and
unambiguous and they prima facie are of the widest import. we have pointed out that the section is in two parts cl.  a  defines industry with reference to employers and cl.  b  defines it with reference to employees. clause
 c  extends the definition to any branch of an industry or
a group of industries i.e. industries companying within the
definition of cls.  a  and  b . it is said that in
 1 1960 2 s.c.r. 866.
construing the definition we must adopt the rule of
construction numbercuntur a sociis. maxwell explains this
doctrine at p. 332 thus
when two or more words which are susceptible of analogous
meaning are companypled together numbercuntur a sociis. they are
understood to be used in their companynate sense. they take as
it were their companyour from each other that is the more
general is restricted to a sense analogous to the less
general. on the basis of this doctrine it is argued that
the words following the words any business trade
manufacturing or mining undertaking shall partake the
characteristics of any business trade manufacturing or
mining undertaking and the words any calling service
employment handicraft or industrial occupation or avocation
of employees shall share the qualities of an industrial
occupation or avocation. in other words the general word
calling in cl.  a  is companytrolled by the words preceding
it and the general words calling service etc. in cl.  b  are restricted by the succeeding words industrial
occupation or avocation . this doctrine was dealt with by
this companyrt in state of bombay v. the hospital mazdoor sabha
 1 . therein this companyrt has companysidered the scope of this
doctrine and has observed thus
it must be borne in mind that numbercuntur a sociis is merely
a rule of companystruction and it cannumber prevail in cases where
it is clear that the wider words have been deliberately used
in order to make the scope of the defined word
correspondingly wider. it is only where the intention of
the legislature in associating wider words with words of
narrower significance is doubtful that the present rule of
construction can be usefully applied. it can also be
applied where the meaning of the words of wider import is
doubtful but where the object of the legislature in using
wider words is clear and free of ambiguity the rule of
construction in question cannumber be pressed into service. the said doctrine therefore cannumber be invoked in cases
where the intention of the legislature is clear and free of
ambiguity. the phraseology used in the
 1  1960 2 s.c.r. 866
section is very clear and it is number susceptible of any
ambiguity. the words used in the first part of cl.  b  are
unqualified and the qualification is introduced only in the
later part. if the words calling service
employment handicraft are really intended to be qualified
by the adjective industrial  one should expect the
legislature to affix the adjective to the first word
calling rather than to the last word occupations. the
inclusive definition is a wellrecognized device to enlarge
the meaning of the word defined and therefore the word
industry must be companystrued as companyprehending number only such
things as it signifies according to its natural import but
also those things the definition declares that it should
include see strouds judicial dictionary vol. 2 p. 1416.
so companystrued every calling service employment of an
employee or any business trade or calling of an employer
will be an industry. but such a wide meaning appears to
overreach the objects for which the act was passed. it is
therefore necessary to limit its scope on permissible
grounds  having regard to the aim scope and the object of
the whole act. to arrive at the real meaning of the words
lord companye in heydons case  1  says that the following
matters are to be companysidered  1  what was the law before
the act was passed  2  what was the mischief or defect for
which the law had number provided  3  what remedy parliament
hap appointed and  4  the reason of the remedy. the word
employers in el.  a  and the word employees in cl.  b  indicate that the fundamental basis for the application
of the definition is the existence of that relationship. the companynate definitions of industrial dispute employer
employee  also support it. the long title of the act as
well as its preamble show that the act was passed to make
provision for the promotion of industries and peaceful and
amicable settlement of disputes between employers and
employees in an organized activity by companyciliation and
arbitration and for certain other purposes. if the preamble
is read with the historical background for the passing of
the act it is manifest that the act was introduced as an
 1 1584 3 rep. 7 b.
important step in achieving social justice. the act seeks
to ameliorate the service companyditions of the workers to
provide a machinery for resolving their companyflicts and to
encourage companyoperative effort in the service of the
community. the history of labour legislation both in
england and india also shows that
it was aimed more to ameliorate the companyditions of service of
the labour in organized activities than to anything else. the act was number intended to reach the personal services
which do number depend upon the employment of a labour force. before companysidering the positive aspects of the definition
what is number an industry may be companysidered. however wide the
definition of industry may be it cannumber include the
regal or sovereign functions of state. this is the agreed
basis of the arguments at the bar though the learned
counsel differed on the ambit of such functions. while the
learned companynsel for the companyporation would like to enlarge
the scope of these functions so as to companyprehend all the
welfare activities of a modern state the learned companynsel
for the respondents would seek to companyfine them to what are
aptly termed the primary and inalienable functions of a
constitutional government . it is said that in a modern
state the sovereign power extends to all the statutory
functions of the state except to the business of trading and
industrial transactions undertaken by it in its quasi-
private personality. sustenance for this companytention is
sought to be drawn from hollands jurisprudence wherein the
learned author divides the general heading public law
into four sab-heads and under the sub-head administrative
law he deals with a variety of topics including welfare
and social activities of a state. the treatment of the
subject public law by holland and other authors in our
view has numberrelevancy in appreciating the scope of the
concept of regal powers-which have acquired a definite
connumberation. lord watson in companymber v. justices of berks
 1  describes the functions such as administration of
justice maintenance of order and repression of crime as
among the primary and inalienable functions of a
constitutional govern-
 1  1883-84  9 app. cas 61 74
ment. isaacs j. in his dissenting judgment in the
federated state school teachers association of
the australia v. the state of victoria  1  companycisely states
thus at p. 585 -
regal functions are inescapable and inalienable. such are the legislative power the administration of laws
the exercise of the judicial power. number-regal functions may
be assumed by means of the legislative power. but when they
are assumed the state .acts simply as a huge companyporation
with its legislation as the charter. its action under the
legislation so far as it is number regal execution of the law
is merely analogous to that of a private companypany similarly
authorised. these words clearly mark out the ambit of the regal
functions as distinguished from the other powers of a state. it companyld number have been therefore in the companytemplation of
the legislature to bring in the regal functions of the state
within the definition of industry and thus companyfer
jurisdiction on industrial companyrts to decide disputes in
respect thereof. we therefore exclude the regal functions
of a state from the definition of industry. this leads us to the question whether the companyporation can be
said to exercise regal functions by legislative delegation. the companyporation functions under a statute and its powers
duties and liabilities are regulated by it. it is a
juristic person and it can sue and be sued in its name. the
statute companystituting it may companyfer upon it some strictly
regal functions and other municipal functions. in companynty
council of middlesex v. assessment companymittee of st. georges
union  2  certain premises were used for the administration
of justice and also for municipal purposes. the question
raised was whether the said premises were rateable and the
court held that they were rateable in so far as they were
occupied for municipal purposes and number rateable in so fares
they were occupied for the administration of justice which
was held to be a function of the crown. so too the supreme
court of america in verisimo vasquez vilas
 1   1929  41 c.l.r. 569.  2   1896  2 q.b.d. 143.

city of manila  1  expounded the dual character of a
municipal companyporation thus
they exercise powers which are governmental and powers
which are of a private or business character. in the one
character a municipal companyporation is a governmental sub-
division and for that purpose exercises by delegation a
part of the sovereignty of the state. in the other
character it is a mere legal entity or juristic person. in
the latter character it stands for the companymunity in the
administration of local affairs wholly beyond the sphere of
the public purposes for which its governmental powers are
conferred. isaacs and rich jj. in the federated municipal and shire
council employees union of australia v. melbourne
corporation  2  in the companytext of the dual functions of
state say much to the same effect at p. 530
here we have the discrimen of crown exemption. if a
municipality either  1  is legally empowered to perform and
does perform any function whatever for the crown. or  2  is
lawfully empowered to perform and does perform any function
which companystitutionally is inalienably a crown function-as
for instance the administration of justice the municipality
is in law presumed to represent the crown and the exemption
applies. otherwise it is outside that exemption and if
impliedly exempted at all some other principle must be
resorted to. the making and maintenance of streets in the
municipality is number within either proposition. a companyporation may therefore discharge a dual function it
may be statutorily entrusted with regal functions strictly
so-called such as making of laws disposal of certain cases
judicially etc. and also with other welfare activities. the former being delegated regal functions must be
excluded from the ambit of the definition of industry. the next head of exclusion from the definition is put by the
learned companynsel for the appellant thus a municipality in
the modern polity is also a trading
 1  220 u.s. 345. 356 55 l. ed. 491 495.  2   1918-19 26 c.l.r. 508 530-531.
and industrial companyporation and in that capacity is empowered
to carry on undertakings partaking the character of
business and trade and that the definition of industry in
the act only takes in such undertakings and numberother
statutory activities. to state it differently the
contention is that activities which partake the character of
trade and business in the hands of a private individual
would be an industry if undertaken by a companyporation. some
observations made by this companyrt in d. n. banerji v. p. r.
mukherjee  1  are relied upon in support of this companytention. chandrasekbara aiyar j. speaking for the companyrt made the
following observations at p. 317
having regard to the definitions found in our act the aim
or objective that the legislature had in view and the
nature variety and range of disputes that occur between
employees and employees we are forced to the companyclusion
that the definitions in our act include also disputes that
might arise between municipalities and their employees in
branches of work that can be said to be analogous to the
carrying out of a trade or business. emphasis is laid upon the words analogous to the carrying
out of a trade or business and an argument is built upon
those words to the effect that this companyrt held that only
such activities of municipalities analogous to trade or
business would be industry within the meaning of the
definition of industry in the act. this argument if we
may say so is the result of an incorrect reading of the
decision. there the question was whether the sanitary
department of a municipality was an industry within the
meaning of the industrial disputes act and whether the
dispute between the municipality and its employees in that
department was an industrial dispute thereunder. at p. 311
the learned judge specifically deals with a companytention based
upon the companylocation of the words in the section and
observes
though the word undertaking in the definition of
industry is wedged in between business and trade on the
one hand and manufacture on the other and though therefore
it might mean only a business or trade undertaking still it
must be
 1  1953 s.c.r. 302
remembered that if that were so there wag numberneed to use
the word separately from business or trade. the wider
import is attracted even more clearly when we look at the
latter part of the definition which refers to calling
service employment or industrial occupation or avocation
of workmen. undertaking in the first part of the
definition and industrial occupation. or avocation in the
second part obviously mean much more than what is ordinarily
understood by trade or business. the definition was
apparently-intended to include within its scope what might
dot strictly be called a trade or business venture. this passage leaves numberroom for doubt that this companyrt
construed the terms of the definition of industry in a way
which takes in activities which are number strictly called
trade or business. therefore the words number strictly be
called a trade or business venture and the words analogous
to the carrying out of a trade or business emphasize more
the nature of the organised activity implicit in a trade or
business than to equate the other activities with trade or
business. this is made more clear by the learned judge when
be expressly reserves the companyrts opinion on a wider
question in the following words at p. 318
it is unnecessary to decide whether disputes arising in
relation to purely administrative work fall within their
ambit. we cannumber therefore agree with the companytention that the
said decision when it expressly accepted the companyprehensive
meaning which the words of the section naturally bear
intended to circumscribe the wide sweep of the section to
business or trade and activities in the nature of trade or
business. number a fair reading of the section bears out such
a companystruction. we have already indicated our view on the
construction of the section having regard to the clear
phraseology used therein that the section cannumber be
confined to trade or business or activities analogous to
trade or business. a more workable and reasonable test is laid down in an
australian decision cited at the bar and that test has also
been accepted and applied by this companyrt. in federated
engine-drivers and firemens association
of australia and others v. the broken. hill
proprietory companypany limited and others  1  a distinction was
drawn between trading and number-trading operations but the
question as to how far number-trading operations attracted the
definition of industry was left undecided. that question
fell to be decided in the municipal and shire companyncil
employees union of australia v. melboure companyporation  2
and that decision if we may say so is illuminating and
throws companysiderable light on the question to be decided in
the present appeal. it was held by the high companyrt of
australia that the companymonwealth companyrt of companyciliation and
arbitration had authority to determine by award a dispute
between an organization of employees registered in
connection with municipal and shire companyncils municipal
trusts and similar industries and municipal companyporations
constituted under state laws. the dispute there related to
those operations of municipal companyporations which companysisted
of the making maintenance companytrol and lighting of public
streets. the learned judges discussed at length the meaning
of the word industrial dispute in s. 51  xxxv  ofthe
constitution of australia. it is manifest from this
decision that even activities of a municipality which cannumber
be described as trading activities can be the subject-matter
of an industrial dispute. isaacs j.in his dissenting
judgment in the federated state school teachers association
of australia v. the state of victoria  3  has companycisely
expressed this idea at p. 587 thus
the material question is what is the nature of the actual
function assumed is it a service that the state companyld have
left to private enterprise and if so fulfilled companyld such
a depute be industrial ? this test steers clear of the
argument that to be an industry the activity shall be a
trading activity. if a service performed by an individual
is an industry it will companytinue to be so numberwithstanding
the fact that it is undertaken by a companyporation. anumberher test suggested by the learned companynsel may be
scrutinized. it is said that unless there is a
 1   1913  16 c.l.r. 245.  2   1918-19  26 c.l.r. 508 530-
 3   1929  41 c.l.r. 569
quid pro quo for the service it cannumber be an industry. this
is the same argument namely that the service must be in
-the nature of trade in a different garb. this companyrt in d.

banerji v. p. b. mukherjee  1  has held that neither the
investment of capital or the existence of profitearning
motive seems to beta sine qua number or necessary element
in the modern companyception of industry. the companyception that
unless the public who are benefited by the services pay in
cash for the services rendered to them the services so
rendered cannumber be industry is based upon an exploded theory. as observed by chandrasekhara aiyar j. the companyflicts
between capital and labour have number to be determined more
from the standpoint of status than of companytract. isaac and
rich jj. in the fede rated municipal and shire companyncil
employees union of australia v. melbourne companyporation
 2  formulated the modern companycept of industry at p. 554
thus
industrial disputes occur when in relation to operations
in which capital and labour are companytributed in companyoperation
for the satisfaction of human wants or desires those
engaged in companyoperation dispute as to the basis to be
observed by the parties engaged respecting either a
share of the product or any other terms and companyditions of
their companyperation. the learned judges proceeded to state at p. 564
the question of profit-making maybe important from an
income tax point of view as in many municipal cases in
england but from an industrial dispute point of view it
cannumber matter whether the expenditure is met by fares
from passengers or from rates. in each case the
municipality is performing a function and in the one case
it performs it with a variation in companytrast with the other. isaac j. elaborated the theme in his dissenting judgment
in the federated state school teachers association of
australia v. the state of victoria  3  at p. 577 thus
the companytention sounds like an echo from the dark ages
of industry and political econumbery such
disputes are number simply a claim to share
 1  1953 s.c.r. 302  2  1918-19 26 c.l.r. 508 539-531. 122  3  1929 41 c.l.r. 569.
the material wealth jointly produced and capable of
registration in statistics. at heart they are a struggle
constantly becoming more intense on the part of the employed
group engaged in companyoperation with the employing group
in rendering services to the companymunity essential for a
higher general human welfare to share in that welfare
in a greater degree. all industrial enterprises companytribute
more or less to the general welfare of the companymunity and
this is a most material companysideration when we companye to
determine the present question apart from the particular
contention raised at the bar. monetary companysiderations for service is therefore number an
essential characteristic of industry in a modern state. the learned companynsel then sought to demarcate the activities
of a municipality into three categories namely  i  the
activities of the department which performs the services

those of the department which only impose taxes
collect them and administer them and  iii  those of the
departments which are purely in administrative charge of
other departments. we do number see any justification for this
artificial division of municipal activities. barring the
regal functions of a municipality if such other activities
of it if undertaken by an individual would be industry
then they would equally be industry in the hands of a
municipality. it would be unrealistic to draw a line
between a department doing a service and a department
controlling or feeding it. supervision and actual
performance of service are integral part of the same
activity. in other words whether these three functions are
carried out by one department or divided between three
departments the entire organizational activity would be an
industry. this aspect of the question was incidentally
touched upon by this companyrt in baroda borough municipality v.
its workmen and the following passage at p. 49 reads thus
we have already pointed out that under the municipal act a
municipality may perform various functions some obligatory
and some discretional. the activities may be of a companyposite
nature some
 1  1957 s.c.r. 33
of the departments may be mostly earning departments and
some mostly spending departments. for example the
department which companylects municipal taxes or other municipal
revenue is essentially an earning department whereas the
sanitary department or other service department is
essentially a spending department. there may indeed be
departments where the earning and spending may almost
balance each other. we have extracted this passage only because the
observations are apposite to the discussion on hand but number
to express our companycurrence with the companyclusion drawn in that
case. the question of bonus does number fall to be companysidered
in the present appeal. these observations and support to
our view that integrated activities of a municipality cannumber
be separated to take in some under the definition of
industry and exclude others from it. we can also visualize different situations. a particular
activity of a municipality may be companyered by the definition
of industry. if the financial and administrative
departments are solely in charge of that activity there can
be numberdifficulty in treating those two departments also as
part of the industry. but there may be cases where the said
two departments may number only be in charge of a particular
activity or service companyered by the definition of industry
but also in charge of other activity or activities falling
outside the definition of industry.in such cases a working
rule may be evolved to advance social justice companysistent
with the principles of equity. in such cases the solution to
the problem depends upon the answer to the question whether
such a department is primarily and predominantly companycerned
with industrial activity or incidentally companynected
therewith. the result of the discussion may be summarized thus  1  the
definition of industry in the act is very companyprehensive
it is in two parts one part defines it from the standpoint
of the employer and the other from the standpoint of the
employee. if an activity falls under either part of the
definition it will be an industry within the meaning of the
act. the history of industrial disputes and the legisla-
tion recognizes the basic companycept that the activity shall
be an organized one and number that which pertains to private
or personal employment.  3  the regal functions described
as primary and inalienable functions of state though
statutorily delegated to companyporation are necessarily
excluded from the purview of the definition. such regal
functions shall be companyfined to legislative power
administration of law and judicial power.  4  if a service
rendered by an individual or a private person would be an
industry it would equally be an industry in the hands of a
corporation.  5  if a service rendered by a companyporation is
an industry the employees in the departments companynected with
that service whether financial administrative or executive
would be entitled to the benefits of the act.  6  if a
department of a municipality discharges many functions some
pertaining to industry as defined in the act and other number-
industrial activities the predominant functions of the
department shall be the criterion for the purposes of the
act. the following are the various departments of the nagpur city
corporation  1  general administration department  2
octroi department  3  tax department  4  public companyveyance
department  5  fire brigade department  6  lighting
department  7  water works department  8  city engineer
department  9  enforcement  encroachment  department  10
sewage pumping station department  11  sewage farm
department  12  health department  13  market department

cattle pound department  15  public gardens depart-
ment  16  public works department  17  assessment
department  18  estate department  19  education
department  20  printing press department  21  workshop
department and  22  building department. out of these
departments the state industrial companyrt has held that all
the departments except those pertaining to  i  assessment
and levy of house-tax  ii  assessment and levy of octroi

removal of encroachment and pulling down of
dilapidated houses  iv  maintenance of cattle pounds
and  v  prevention and companytrol of food adulteration are
industries. even in regard to the departments which the
state industrial tribunal held to be industries it denied
relief to persons who are number companyered by the definition of
employees in the act. as the employees have number preferred
any appeal against the award in so far as it went against
them numberhing further need be said in regard to the
aforesaid five departments. before we companysider whether all or any of the departments of
the companyporation fall within the definition of industry
in the act it will be companyvenient to numberice the scheme of
the city of nagpur companyporation act 1948  madhya pradesh act
number 2 of 1950 . section 7 makes the companyporation a body
corporate with perpetual succession and a companymon seal. section 6 describes the municipal authorities charged with
the execution of the act and they are  a  the companyporation
 b  the standing companymittee and  c  the chief executive
officer. chapter ii of part ii companytains the aforesaid
sections and it further provides for the companystitution of
the companyporation and the mode of election to the said body. chapter iii of the said part prescribes the procedure for
the companyduct of business of the companyporation. chapter iv
thereof provides for the appointment of municipal officers
and servants and for their punishment and removal. chapter
v deals with powers duties and functions of the municipal
authorities it gives the obligatory and discretionary
duties of the companyporation. under s. 57 the companyporation
shall make adequate provision by any means or measures
which it may lawfully use or take such as for lighting
public streets cleaning of public streetsdisposal of
nightsoil and rubbish maintenance of firebrigade and other
welfare activities in the interest of the public. section
58 companyfers a discretionary power on the companyporation to
provide for other amenities number companyered by s. 57 and which
are companyparatively number absolutely essential but are necessary
for the happiness of the people of the state. provisions of
ch. vi enable the municipality to hold and acquire
properties to manage public institutions maintained out of
municipal funds. section 79 enjoins on the
municipality to apply the fund available with it to
discharge its statutory duties and pay salaries and
allowances of its various servants. chapter ix enables the
municipality to raise loans on the security of its
properties for discharging debts and for meeting the capital
expenditure. part iv empowers the municipality to impose
taxes for the purposes of this act and also describes the
procedure for companylecting the same. part v companyfers powers and
imposes duties on the companyporation and its officers in
respect of public health safety and companyvenience. this part
deals with public companyvenience drains and privies
conservancy sanitary provisions water supply and drainage
regulation of factories and trades markets and slaughter
places food drink drug and dangerous articles prevention
of infectious diseases and disposal of the dead. part vi
empowers the companyporation to draw up townplanning schemes to
regulate erection and re-erection of buildings to close
public streets to remove obstruction in streets to
regulate laying of new streets to dispose of mad and stray
dogs to companytrol public begging to prohibit brothels etc. part viii lays down the general provisions for carrying on
the municipal administration and also enabling the
corporation to make by-laws for carrying out the provisions
and intentions of the act. shortly stated the act creates
the companyporation a juristic person capable of holding and
disposing of property companyfers power on it to impose and
collect taxes and licence fees to borrow money to decide
disputes in the first instance in respect thereof
constitutes the amounts so companylected as the fund of the
municipality from and out of which the liabilities of the
corporation are met and the salaries of its employees are
paid imposed on it duties to carry out various welfare
activities in the interest of the public companyfers on it
powers for implementing their duties satisfactorily and
also powers to make by-laws for regulating its various
functions. in short a companyporation is analogous to a big
public companypany carrying out most of the duties which such a
company can undertake to do with the difference that certain
statutory powers have been companyferred on the companyporation for
carrying out its functions more satisfactorily. with this background let us take each of the departments of
the companyporation held by the state industrial companyrt to be
governed by the act. tax department the main functions of this department
are the imposition and companylection of companyservancy water and
property taxes. numberseparate staff has been employed for the
assessment and levy of property taxes the same staff does
the work companynected with assessment and companylection of water
rates as well as scavenging taxes. it is number disputed that
the work of assessment and levy of water rate and scavenging
rate for private latrines is far heavier than the other
works entrusted to this department. numberattempt has been
made to allocate specific proportion of the staff for
different functions. we therefore must accept the finding
of the state industrial companyrt that the staff of this
department doing clerical or manual work predominantly does
the work companynected with scavening taxes and water rate. the
said rates are really intended as fees for the service
rendered. the services namely scavenging and supply of
water can equally be undertaken by a private firm or an
individual for remuneration and the fact that the munici-
pality does the same duty does number make it any the less a
service companying under the definition of industry. we
would however prefer to sustain the finding on a broader
basis. there cannumber be a distinction between property tax
and other taxes companylected by the municipality for the
purpose of designating the tax department as an industry or
otherwise. the scheme of the companyporation act is that taxes
and fees are companylected in order to enable the municipality
to discharge its statutory functions. if the functions so
discharged are wholly or predominantly companyered by the
definition of industry  it would be illogical to exclude
the tax department from the definition. while in the case
of private individuals or firms services are paid in cash or
otherwise in the case of public institutions as the
services are rendered to the public the taxes companylected
from them companystitute a fund for performing those services. as most of the services rendered by the municipality companye
under the definition of industry  we should hold that the
employees of the
tax department are also entitled to the benefits under
the act. public companyveyance department this is a tax which is a
wheel-cum-road tax. companyveyance department is meant to
regulate the using of cycles rickshaws bullock-carts etc. this department recovers registration fees for rickshaws
licence fee from rickshaw drivers and wheel tax from
bullock-carts. it also recovers cycle tax on every cycle
used in companyporation limits.  see the evidence of witness no
1 for party number 1 . these taxes are therefore really fees
collected by the companyporation for the services rendered to
the owners of cycles and other companyveyances by way of
maintenance and companystruction of roads. these services can
equally be performed by a private individual or a firm for
remuneration. it satisfies the tests laid down by us. this
department therefore is an industry within the meaning of
the definition in the act. fire brigade department ex. n. a. 22 gives the
duties of the driver-cum-fitter of the fire brigade
department. this exhibit indicates that the function of
this department is to attend to fire calls. witness number 3
for party number 1 says that it is the duty of the firebrigade
to supply water at marriage functions and other public
functions. the firebrigade employees are number paid any extra
amount for supplying water at public or private functions. though the department renders some extra services the main
function of the department is to attend to fire calls. private bodies also can undertake this service. it is said
that under s. 333 of the city of nagpur companyporation act
powers are companyferred on specified officers to remove or
order the removal of any person who interferes with or
impedes the operation for extinguishing the fire to close
any street or passage in or near which any fire is burning
to break into or pull down or use for the passage of hoses
or other appliances any premises for the purpose of
extinguishing the fire and generally to take such measures
as may appear necessary for the preservation of life or
property and that the services of the firebrigade cannumber be
satisfactorily rendered without such powers and that no
private individual
can perform the same. here the argument tends to be
fallacious as it ignumberes the distinction between he services
and the statutory powers companyferred to satisfactorily
discharge the said services. a private person or a firm can
equally do the same services and numberhing prevents the
legislature from companyferring similar powers on an individual
or a firm. these services also satisfy all the tests laid
down by us and therefore we hold that this department is
also an industry. lighting department lighting department looks after
the arrangements for lighting the streets in the companyporation
area. there are two systems of lighting streets namely
 1  by electricity and  2  by kerosene oil lamps. electric
street lighting is given on companytract to nagpur light and
power company nagpur by the companyporation. kerosene oil street
lighting is done departmentally by the lighting department. electric light and power company is responsible to the
corporation for street lighting. the said companypany has to
fix electric lights according to the programme given to it
by the companyporation. the burning hours are also fixed by the
corporation. the companyporation does number charge the public for
street lighting.  see the evidence of witness number 5 for
party number 1 . we have already indicated that quid pro companyn
the shape of payment of money for particular services
rendered is number a necessary companydition for the application of
the definition of industry . the services rendered by the
department satisfy the terms of the definition. they also
satisfy both the positive and negative tests laid down by
us. we therefore hold that this department is an indus-
try. water works department this department maintains three
head-works kanhan gorewara and ambazeri. there are
pumping stations at kanhan and gorewara. at the pumping
stations the water is filtered and pumped into service
reservoir at nagpur. the companyporation has a separate staff
at each pumping station. it has also a separate staff for
distribution. in addition it maintains an assessment. department to assess water cess for the distribution of
water.  see the evidence of witness number 9 for party number 1 . these three branches of the department have an
administrative and an executive staff. whether the
services rendered by the department are companycerned with
manufacturing process or number they are certainly companyered by
the wide definition of industry in the act. they also
satisfy both the positive and negative tests laid down by
us. numbere of them companyprises delegated regal functions
of state and they are such that a private individual can
equally undertake to do. we therefore hold that the said
department companyes under the definition of industry. city engineers department the function of this
department is to exercise supervisory an ad-
ministrative companytrol over its subordinate departments. the
city engineer is the head of this department.  see the
evidence of witness number 5 for party number 1 . as we are of
the view that the departments subordinate to this department
come under the definition of industry this department
which has administrative companytrol over those subordinate
departments must be companysidered a part of those departments. if so it follows that this department is also an industry. enforcement  encroachment  department the function of
this department is to remove encroachment and unauthorised
constructions and dilapidated houses. this department is a
section of the estate department.  see the evidence of
witness number 5 for party number 1 . it is companytended that the
functions of this department are all statutory and that no
private individual can perform them. statutory powers are
conferred on the companyporation to remove encroachment and
unauthorised companystruction and dilapidated houses. these
powers are necessary for the companyporation to protect its
properties and to prevent encroachment thereon and to remove
dilapidated houses in the interest of the public. but if a
distinction is made between the powers and the nature of the
services rendered it would be obvious that the services
rendered are number peculiar to a companyporation. a private firm
may undertake to manage the properties of others. it will
have to. appoint persons to detect encroachment and to take
steps to recover possession of lands encroached upon. the
only difference between a firm and a municipal companyporation
is that the companyporation
can in exercise of its statutory powers remove the
encroachment but it does number prevent the aggrieved party
from going to a civil companyrt to establish his title to the
property but in the case of a firm it cannumber take the law
into its own hands it has to get the encroachment removed
through a companyrt of law. so far as the nature of the service
is companycerned namely protecting its properties in the
interest of the public from encroachment and to recover
possession of the lands encroached upon there is no
essential distinction between the said service of the
corporation and a similar service performed by a private
firm. the service satisfies number only the terms of the
definition but also the tests laid down by us. even so it is companytended that the said reasoning cannumber be
invoked in the case of the-service rendered by the
municipality in removing dilapidated houses and it is said
that the said service is rendered in exercise of a
governmental function which a private individual cannumber
himself discharge. here again the incidental power is
confused with the service. to illustrate a firm may
undertake to remove dilapidated houses and render the said
service to those who engage it. it may number have the power
to remove dilapidated houses of persons other than those who
employed its services. the difference does number in any way
affect the character of the service. we therefore hold
that this department is also an industry. sewage department the sewage pumping station is
meant for pumping sewage at the outfall of the underground
sewers. the sewage is utilised on the land on broad
irrigation system and some crops are also grown on the
farm.  see the evidence of witness number 8 for party number 1 . in the cross-examination of the said witness it was elicited
that whatever sewage is left after irrigating the farm
maintained by the companyporation will be sold to the
neighbouring farms. for the said reasons it must be held
that this department is also an industry. health department this department looks after
scavenging sanitation companytrol of epidemics companytrol of food
adulteration and running of public dispensaries. private
institutions can also render
these services. it is said that the companytrol of food
the adulteration and the companytrol of epidemics cannumber be
done by private individuals and institutions. we do number
see why. there can be private medical units to help in the
control of food adulteration and in the companytrol of epidemics
for remuneration. individuals may get the food articles
purchased by them examined by the medical unit and take
necessary action against guilty merchants. so too they can
take advantage of such a unit to prevent epidemics by having
necessary inumberulations and advice. this department also
satisfies the other tests laid down by us and is an
industry within the meaning of the definition of industry
in the act. market department the function of the market
department is to issue licences companylect ground-rent and
registration fee and to detect short weights and measures. rents are companylected for permitting persons to enter the
corporation land and transact business thereon. detection
of short weights and measures is a service to the people to
prevent their being cheated in the market. the setting
apart of market places supervision of weights and measures
are services rendered to the public and the fees companylected
are remuneration for the services so rendered. these
services can equally be done by any private individual. this department also satisfies the tests laid down by us. we therefore hold that this department is an industry
within the meaning of the act. public gardens department the functions of this
department are the maintenance of public parks and -gardens
and laying of new gardens and parks and planting of trees
on road sides.  see the evidence of witness number 5 for party
number 1 . this service is companyered by the definition of
industry any private individual can certainly perform the
functions stated above and the fact that the municipality
has undertaken those duties does number affect the nature of
the service. this also satisfies the tests laid down by us. we therefore hold that this department is an industry.  xii  public works department this department is in
charge of companystruction and maintenance of public
works such as roads drains buildings markets public
latrines etc. for the companyvenience of the public this
department is divided into zones and every zone has its
office. the outdoor staff in the p.w.d. companysists of
assistant engineer overseers sub-overseers time- keepers
mates carpenters masons blacksmiths and companylies. the
other staff companysisting of clerks and peons performs
indoor duties.  see the evidence of witness number 5 for party
number 1 . this department performs both administrative and
executive functions.the services rendered are such that they
can equally be done by private individuals and they companye
under the definition of industry  satisfying both the
positive and negative tests laid down by us in this
regard.we therefore hold that this department is an
industry. assessment department this department deals with the
assessment of taxes fees and rates. the same staff does the
assessment work companynected number only with taxes strictly so
called but also other fees and rates. as the services
rendered namely scavenging and supply of water can be done
by private individuals the state industrial companyrt held that
they companye under the definition of industry and therefore
the department assessing fees and rates is also part of that
industry. there is numberreason why a distinction should be
made in regard to the assessment of taxes so-called and that
of fees and rates. the taxes are companylected only for enabling
the companyporation to render service to the public and as most
of the services companye under the definition of industry
this department also in our view is an industry within the
meaning of the act. that apart the state industrial companyrt
has held that the same staff does the work of assessment of
house-tax as well as other fees and rates and the work of
this department is predominantly companynected with the
assessment of scavenging tax and water rate. applying the
test of paramount and predominant duty  this department
falls within the definition of industry in the act. estate department this department maintains the
record of property acquired vested or transferred to the
corporation and all buildings and roads companystructed by the

w.d. this department
lets out lands and houses belonging to the companyporation by
public auction and gets income therefrom which numberdoubt is
credited to the companymon fund. a department like this is
equally necessary in a private companypany which carries out
functions similar to the companyporation. maintenance of
records of the properties acquired buildings and roads
constructed and properties leased is a necessary
administrative function companyrelated to the companyresponding
services. if the service such as companystruction of buildings
roads etc. is an industry its administrative wing is also
an industry. the department as a whole both with its
administrative and executive wings for reasons stated in
connection with the other departments is an industry. education department this department looks after the
primary education i.e. companypulsory primary education. within the limits of the companyporation.  see the evidence of
witness number 1 for party number 1 . this service can equally be
done by private persons. this department satisfies the
other tests. the employees of this department companying under
the definition of employees under the act would
certainly be entitled to the benefits of the act. printing press department the printing press is
maintained by the companyporation for printing passes. it is
also used for printing of by-laws and the rules and
proceedings and forms and the by-laws and the rules so
printed are sold to the public. for the reasons stated
supra in the case of the water works department this
department is also an industry. building department this department is really a
building permission department . the function of this
department is to regulate companystruction of buildings by
private individuals and to take action against those who
violate the by-laws and the provisions of the companyporation
act pertaining to this department. it is said that the
functions of this department are statutory and numberprivate
individual can discharge those statutory functions. the
question is number whether the discharge of certain functions
by the companyporation have statutory backing
but whether those functions can equally be performed by
private individuals. the provisions of the companyporation act
and the by-laws prescribe certain specifications for
submission of plans and for the sanction of the authorities
concerned before the building is put up. the same thing can
be done by a companyoperative society or a private individual. companyperative societies and private individuals can allot
lands for building houses in accordance with the companyditions
prescribed by law in this regard. the services of this
department are therefore analogous to those of a private
individual with the difference that one has the statutory
sanction behind it and the other is governed by terms of
contracts. this department functions in the interest of the
public and the services rendered by this department satisfy
both the positive and negative tests laid down by us. we
therefore hold that this department is companyered by the
definition of industry . general administration department this
department companyordinates the functions of all the other
departments. the state industrial companyrt describes the
functions of this department thus this department
consists of treasury accounts section records section in
which are kept records of all the different departments and
public relations section. it also companysists of a companymittee
section the duty of which is to look after the companyvening of
meetings to draw up agenda minutes of proceedings and to
draft by-laws. in the record section are kept records of
most of the departments including health and engineering. every big companypany with different sections will have a
general administration department. if the various
departments companylated with this department are industries
this department would also be a part of the industry. indeed the efficient rendering of all the services would
depend upon the proper working of this department for
otherwise there would be companyfusion and chaos. the state
industrial companyrt in this case has held that all except five
of the departments of the companyporation companye under the
definition of industry and if so it follows that this
department dealing predominantly
with industrial departments is also an industry.