Supreme Court's complex ruling on 'industry' definition under repealed ID Act impacts labour rights, raising questions for the new Industrial Relations Code.
On August 20, 2026, the Supreme Court of India delivered its judgment on the reference concerning the correctness of the Bangalore Water Supply and Sewerage Board vs A. Rajappa (1978) judgment.
The reference specifically addressed the test for defining "industry" under the repealed Industrial Disputes Act, 1947.
A nine-judge Bench heard the matter, even though the Industrial Disputes Act, 1947 had been repealed by the Industrial Relations Code, 2020 on November 21, 2025.
Several judges, including Justice D. Datta, Justice U. Bhuyan, and Justice B.V. Nagarathna, deemed the reference "unnecessary and only academic in nature" due to the repeal.
The Chief Justice of India's opinion, supported by four judges, acknowledged the repeal and described its reformulated Triple Test as "hypothetical," stating it would not apply to pending cases.
Detailed Insights:
The reference originated from the State of U.P. vs Jai Bir Singh (2005) case, which questioned the "worker-oriented approach" of the BWSSB judgment.
The Supreme Court explicitly stated that the principles laid down in BWSSB should not be considered the "sheet anchor" for interpreting the Industrial Relations Code, 2020 in future cases.
The article highlights an underlying "anxiety" to move away from the "pro-worker" stance of the BWSSB judgment, which provided broad protection to workers.
The Constitution of India emphasizes social justice, with Article 42 mandating just and humane conditions of work and Article 23 prohibiting forced labour.
The Kesavananda Bharati (1973) judgment recognized social, economic, and political justice as part of the Basic Structure Doctrine of the Constitution.
The new labour codes, including the Industrial Relations Code, 2020, are perceived to narrow the scope of worker protection compared to the Industrial Disputes Act, 1947.
Key Concepts Involved:
Industrial Disputes Act, 1947: Former central legislation governing industrial relations, investigation, and settlement of industrial disputes in India.
Industrial Relations Code, 2020: New central legislation that consolidates and amends laws relating to trade unions, conditions of employment, and industrial dispute resolution.
Bangalore Water Supply and Sewerage Board vs A. Rajappa (1978): A landmark Supreme Court judgment that broadly defined "industry" under the ID Act, 1947, extending its coverage to various organizations.
Triple Test: Criteria established in the BWSSB judgment to determine if an activity qualifies as an "industry" for the purpose of the Industrial Disputes Act.
Basic Structure Doctrine: A judicial principle, established in Kesavananda Bharati (1973), that certain fundamental features of the Indian Constitution cannot be altered by parliamentary amendment.
Article 42: A Directive Principle of State Policy in the Constitution of India that directs the State to make provisions for securing just and humane conditions of work and for maternity relief.
Article 23: A Fundamental Right in the Constitution of India that prohibits traffic in human beings and forced labour.