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In which one of the following judgments did the Supreme Court lay down the 'Triple test' in respect of the definition of 'industry' under the Industri
Question

In which one of the following judgments did the Supreme Court lay down the 'Triple test' in respect of the definition of 'industry' under the Industrial Disputes Act, 1947?

A.

State of Bombay v. the Hospital Mazdoor Sabha, AIR 1960 SC 610

B.

Bangalore Water Supply and Sewerage Board v. R. Rajappa, AIR 1978 SC 548

C.

State of U.P. v. Jai Bir Singh, (2005)5 SCC 1

D.

M/s Bharti Airtel Limited v. A.S Raghavendra [Civil Appeal No. 5187 of 2023]

Correct option is B

The correct answer is: (b) Bangalore Water Supply and Sewerage Board v. R. Rajappa, AIR 1978 SC 548

Explanation

In this historic judgment, a seven-judge bench of the Supreme Court, led by Justice V.R. Krishna Iyer, sought to end the "zigzag" course of previous conflicting decisions and provide a definitive meaning to the term "industry." The Court established the Triple Test to determine whether an enterprise falls within the definition:

  1. Systematic Activity: The enterprise must be engaged in a continuous and organized activity.
  2. Co-operation: There must be a relationship of co-operation between the employer and the employee.
  3. Production of Goods/Services: The activity must be directed toward the production and/or distribution of goods and services intended to satisfy human wants and wishes (excluding purely spiritual or religious services).

The Court held that if these three criteria are met, the entity is an "industry," regardless of whether it has a profit motive or involves capital investment.

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