Bangalore Water Supply Case
Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978)
1. Court:
Supreme Court of India
2. Citation:
AIR 1978 SC 548
3. Facts:
The Bangalore Water Supply and Sewerage Board (BWSSB) was a statutory body constituted under the Karnataka Water Supply Act.
Employees of the Board sought protection under the Industrial Disputes Act, 1947, claiming that the Board was an "industry" within the meaning of the Act.
The question arose whether BWSSB was a "State" or an "industry" for the purpose of labor laws.
This classification was important because if BWSSB was considered a "State," certain labor laws would not apply.
The Board argued that as a government instrumentality, it was part of the State and hence not covered by labor laws applicable to private industries.
4. Issues:
Whether the Bangalore Water Supply and Sewerage Board is an "industry" under the Industrial Disputes Act, 1947.
Whether the Board is a "State" within the meaning of Article 12 of the Constitution of India.
Whether labor laws applicable to private industry apply to the Board.
5. Decision:
The Supreme Court held that the Bangalore Water Supply and Sewerage Board is indeed an "industry" under the Industrial Disputes Act.
It was held that the Board was not the "State" under Article 12 for the purposes of labor laws.
Therefore, the Board was liable to be treated as an industry, and labor laws would apply.
6. Reasoning:
The Court applied the "Instrumentality or Agency" test to determine whether a body constitutes "State" under Article 12.
It was observed that mere creation by a statute or government control does not automatically make a body part of the State.
The Court held that the Board was created to perform a commercial function — supplying water and sewerage services — on a business basis.
Since the Board was engaged in the production and distribution of essential services, it qualified as an "industry."
The court emphasized the functional nature over the source of creation or funding in classifying the Board.
Therefore, employees of the Board were entitled to the protections granted under the Industrial Disputes Act.
7. Legal Principles Established:
Definition of "Industry": The Court adopted a broad interpretation of "industry" to include activities of economic and commercial character.
State under Article 12: Not every government-created body is "State"; it must be an instrumentality or agency of the government exercising sovereign functions.
Functional Test: The nature of functions (commercial or sovereign) performed by a body is crucial to classification.
Industrial Disputes Act applicability: Bodies carrying on commercial activities can be covered under labor laws despite government creation.
8. Related Case Law:
Rajasthan State Electricity Board v. Mohan Lal (1967): Earlier case on whether State Electricity Boards are "State."
T. C. Basappa v. State of Mysore (1964): Discussed the criteria for classifying an instrumentality of the State.
Ajay Hasia v. Khalid Mujib (1981): Supreme Court clarified principles regarding "State" under Article 12, laying down tests such as control, financial assistance, and functions.
9. Significance:
The judgment expanded the definition of "industry" to include government-owned commercial undertakings.
It clarified the scope of Article 12, providing guidelines to differentiate between the State and statutory corporations.
Ensured employees of such boards are covered by labor laws, granting them protections regarding service conditions, retrenchment, and disputes.
This case serves as a precedent for determining the applicability of labor laws to public sector undertakings and statutory bodies.
10. Summary Table:
| Aspect | Details |
|---|---|
| Case Name | Bangalore Water Supply and Sewerage Board v. A. Rajappa |
| Court | Supreme Court of India |
| Year | 1978 |
| Issue | Whether the Board is "industry" or "State" |
| Held | Board is "industry"; labor laws apply |
| Legal Principle | Functional test to determine "State"; broad definition of "industry" |
| Significance | Clarified scope of labor laws and Article 12 for statutory bodies |
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