SC’s nine-judge Bench to decide if sovereign functions, state activities come under ‘industry’

A nine-judge Constitution Bench of the Supreme Court would begin hearing from March 17 a 2002 case regarding the question whether educational institutions, hospitals and sovereign functions of the government and its instrumentalities would fall within the definition of ‘industrial activity’ under the Industrial Disputes Act.

Chief Justice of India Surya Kant, heading a three-judge Bench on Monday (February 16, 2026), chose the case for constituting the first nine-judge Constitution during his tenure.

The question of law in the reference before the proposed nine-judge Bench concerns a 1978 judgment delivered in Bangalore Water Supply and Sewerage Board v. A. Rajappa by Justice V.R. Krishna Iyer as a member of a seven-judge Bench.

The 1978 judgment had expanded the definition of ‘industry’ under Section 2(j) of the Industrial Disputes Act, 1947. The judgment had introduced a triple test and included hospitals, educational institutions and municipalities as industries.

Significantly, the Chief Justice framed a question whether “social welfare activities and schemes or other enterprises” undertaken by government departments or its instrumentalities could be construed as industrial activity under Section 2(j) of the Industrial Disputes Act.

Another question framed by the Supreme Court for consideration by the proposed nine-judge Bench is a clarification on what ‘state/sovereign activities’ would fall within the definition of industry under Section 2(j).

Section 2(j) defines ‘industry’ to include “any business, trade, undertaking, manufacture or calling of employers and includes any calling service, employment, handicraft or industrial occupation or avocation of workmen”.

The 1978 judgment had expanded the ambit of ‘industry’ to hold that any systematic activity, whether or not done for a profit motive, including charitable and government-run services, were an industry if they met the ‘triple test’ parameters. The judgment was designed to benefit employees to claim the status and legal protection as industrial ‘workers’. The 1978 judgment had only exempted sovereign functions from the ambit of the definition of ‘industry’.

The nine-judge Bench would be constituted on an administrative order of Chief Justice Kant. The court has fixed the hearing on two days, March 17 and March 18, 2026.