The case of Bangalore Water Supply and Sewerage Board vs A. Rajappa is a landmark judgment delivered by a seven-judge bench of the Supreme Court of India on February 21, 1978. The core issue was to clarify the meaning of "industry" under Section 2(j) of the Industrial Disputes Act, 1947. The problem it solved was the ambiguity and "zigzag course" of judicial decisions that had previously restricted the application of the Act to institutions like hospitals, universities, and government departments.
The judgment, authored by Justice V.R. Krishna Iyer, established the "Triple Test" to determine if an activity is an "industry". This test requires three elements: a systematic activity, cooperation between employer and employee, and the production or distribution of goods or services to satisfy human wants and wishes. The Court also introduced the "Dominant Nature Test," holding that the predominant nature of the activity determines its character, and the absence of a profit motive is irrelevant. Applying this, the Court held that the Bangalore Water Supply and Sewerage Board was an "industry".
This judgment significantly expanded the scope of the Industrial Disputes Act, 1947, bringing charitable institutions, educational bodies, and public utility undertakings under its purview, thereby extending labour law protection to their employees. The case connects directly to the Industrial Disputes (Amendment) Act, 1982, which sought to replace the definition of "industry" in Section 2(j) to explicitly exclude certain activities like hospitals and educational institutions. However, this 1982 Amendment was never notified and thus never came into force, meaning the Triple Test from the Bangalore Water Supply case remained the operative law for nearly five decades. Recently, a nine-judge bench of the Supreme Court has revisited the interpretation of the Triple Test. The Industrial Disputes Act, 1947, has now been replaced by the Industrial Relations Code, 2020, which contains a new definition of "industry".