P. Chennakesav Reddi, C.J. - 'Industry' has become an expression of enduring interest to employers and workers in an industry-prone rapidly developing nation. 2. What are the attributes or features which make an un­dertaking analogous to trade or business so as to fall within the sweep of "industry” as defined in section 2 (j) of the Indust­rial Disputes Act, 1947 (hereinafter referred to as ' the Act') ? Are Muster Roll workers employed in the Public Works Depar­tment of the Government of Assam "Industrial workers'' and the Public Works Department an industry falling within the terra­in of the Act are the two irresistibly attractive questions of abiding interest arising in the case. 3. The question as to what is an "Industry'' and who is an "industrial worker” has baffled the courts in view of the changed socio-economic ethos and the present changed needs of the time. The question however is no longer res Integra. The tests laid down in several judgments by the Supreme Court to delineate have not been however uniform and have been ever expanding the scope of the definition. Subsequent cases added their gloss to the earlier ones as the tests laid down till then were found unsatisfactory to cover new cases or failed to notice the indigenous, current, sociological perspectives.' 4. To begin with, it is best to look to the Act itself for guidance keeping in mind its objects, the preamble and functions of various provisions and analyse and evaluate the scope and meaning of "Industry" which has been defined with particularity especially from Indian background. 5. The object of the Act, as is evident from the long title is "to make provision for the investigation and settlement of industrial disputes, and for certain other purposes" connected therewith. The object of the Act is to achieve industrial peace and harmony It is of vital importance not only to the emp­loyers and the employees of the industrial concerns, but also to the nation as a whole for lasting peace and harmony in the industrial sector. The object of the Act is to achieve industrial peace and harmony It is of vital importance not only to the emp­loyers and the employees of the industrial concerns, but also to the nation as a whole for lasting peace and harmony in the industrial sector. Dealing with the object of the Act, the Supreme Court in Banerji's case ( AIR 1953 SC 58 ) observed : "When our Act came to be passed, labour disputes had already assumed big proportions, and there were clashes between workmen and employers in several instances We can assume therefore that it was to meet such a situation that the Act was enacted, and it is consequently necessary to give the terms employed in the Act referring to such disputes as wide an import as reasonably possible." 6. Let us, therefore, first look at the definition of "Industry" under section 2 (j) of the Act. "(j) "industry" means any systematic activities carried on by co-operation between an employer and his workmen (whether such workmen are employed by such emplo­yer directly or by or through any agency including a (contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which ate merely spiritual or religious in nature), whether or not : (i) any capital has been invested for the purpose of carrying on such activity : or (ii) such activity is carried on with a motive to make any gain or profits, and includes - (a) any activity of the Dock Labour Board establi­shed under section 5A of the Dock Workers (Regu­lation of Employment) Act, 1948 : (b) any activity relating to the promotion of sales or business or both carried on by an establishment, but does not include: (1) any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause and such other activity is the predominant one. Explanation - For the purpose of this sub-clause, "agricultural operation” does not include any activity carried on in a planta­tion as defined in clause (f) of section 2 of the Plantations Labour. Explanation - For the purpose of this sub-clause, "agricultural operation” does not include any activity carried on in a planta­tion as defined in clause (f) of section 2 of the Plantations Labour. Act, 1951, or (2) hospitals or dispensaries; or (2) educational, scientific, research or training institutions; or (4) institutions owned or managed by organisations wholly or substantially engaged in any charitable social, or phi­lanthropic service; or (5) khadi or village industries; or (6) any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or (7) any domestic service; or (8) any activity, being a profession practiced by an indivi­dual or body of individuals, if the number of persons employed by the individual or body of individuals in relation to such profession is less than ten; or (9) any activity, being an activity carried on by a co-opera­tive society or a club or any other like body of individual% if the number of persons employed by the co­operative society, club or other like body of individuals in relation to such activity is less than ten.'' 7. The definitions of employer under section 2(g) and workman under section 2(s) are relevant for our purpose and may be read. The definitions of employer under section 2(g) and workman under section 2(s) are relevant for our purpose and may be read. "2(g)'' "Employer" means (i) in relation to an industry carried on by or under the authority of any department of the Central Govern­ment or a State Government, the authority prescribed in this behalf, or where no authority is prescribed, the head of the department: (ii) in relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that authority." "2(s) "workman'' means any person (including an appr­entice) employed in any industry to do any manual, un­skilled, skilled, technical, operational, clerical or supervi­sory work for hire reward, whether the terms of employ­ment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dis­pute, includes any such person who has been dismissed, dis­charged or retrenched in connection with, or as a conse­quence of that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person - (i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or (ii) who is employed in the police service or as an offi­cer or other employee of a prison; or (iii) who is employed mainly in a managerial or admi­nistrative capacity; or (iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per menses or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial na­ture." 8. A comprehensive meaning is given of the term "industry'' fey the statutory definition of "industry'5. Two guiding factors eme­rge from the object of the Act : (1) the meaning of the term "industry'' is to be determined in the context and for the pur­pose of matters provided for in the Act : and (2) the limited con­cept of what the industry meant in early times must not now yield place to an enormously wider concept so as to take in myriad and varied forms of industry, so that the dispute arising in connection with them might be settled quickly. It should be noted that the Act was enacted to prevent wide-spread extension of labour unrest and labour disputes which had already assumed 1% proportions, and there were clashes between workman and employers in several instances. The statute was passed having regard to the state of things that existed at the time and the statute was enacted to remedy the evils that existed at the time. Therefore the legislature had to draw definitions of wide import as an adequate measure to solve problems that were likely to arise in the industrial field. The nature, variety and range of disputes that were likely to occur between the employers and employees were the factors that guided the Legislature in enact­ing the definitions of "industry", ''industrial dispute" and "work­man''. Chandrasekhara Liyar, J., in Benerji's case ( AIR 1953 SC 58 ) while examining the concept of "industry'' observed' that a dis­pute in connection with the discharge of normal activities of Government or of a local body cannot be regarded as industrial dispute. In the State of Bombay and ors. vs. The Hospital Mazdoor Sabha and ors, AIR 1960 SC 610 , Gajendragadkar, J. (as he then was) held that profit motive and investment of capital are not material in deciding the question as to whether any activity is an undertaking as defined in section 2(j) of the Act and the doctrine of quid pro quo has no application. In the Corporation of the City of Nagpur vs. Its Employees, AIR 1960 SC 675 , Subba Rao, J. (as he then was) speaking for the Bench observed that " the primary and inalienable func­tions of a constitutional government" cannot be included within the definition of " industry ''. the true test, according to the learned Judge, was concisely stated by Isaacs, J. in his dissen­ting judgment in Federated State School Teachers' Association of Australia vs. State of Victoria, (1928-29) 41 CLR 569, at p.587 : "The material question is : what is the nature of the actual function assumed - is it a service that the State could have left to private enterprises, and, if so fulfilled, could such a dispute be "industrial" ? In Management of Safdar Jung Hospital, New Delhi vs. Kuldip Singh Sethi, AIR 1970 SC 1407 , Hidayatullah, C. J., observed : "It is obvious that Safdarjung Hospital is not embar­ked on an economic activity which can be said to be analogous to trade or business. There is no evidence that it is more than a place where persons can get treated.” This is a part of the functions of Government and the Hospital is run as a Department of Government. It can­not, therefore, be said to be an industry ". In the Secretary, Madras Gymkhana Club Employees' Union vs. the Management of the Gymkhana Club, AIR 1968 SC 554 , Hidayatullab, J. (as he then was) observed that the club was not an industry. Now we come to the latest case of the Supreme Court in the question, namely, the Bangalore Water Supply and Sewerage Board vs. A. Rajappa, AIR 1978 SC 548 . In that case a Bench of seven Judges considered the question and observed that: "Sovereign functions strictly understood (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies." Krishna Iyer, J., speaking on behalf of himself, Bhagwati and Desai, JJ., held as follows: 'Industry', as denned in S. 2 (j) and explained in Banerji ( AIR 1953 SC 58 ) has a wide import. (a) Where (i) systematic activity, (ii) organised by co-ope­ration between employer and employee (the direct and subs­tantial element is chimerical), (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss i.e. making on a large scale prasad or food prima facie, there is an in­dustry in that enterprise. (b) Absence of profit motive or gainful objective is irrele­vant, be the venture in the public, joint, private or other sec­tor. (c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations. (d) If the organisation is a trade or business it doe' not cease to be one because of philanthropy animating the under­taking. II. Although section 2(j) uses words of the widest ampli­tude in its two limbs, their meaning cannot be magnified to overreach itself. (d) If the organisation is a trade or business it doe' not cease to be one because of philanthropy animating the under­taking. II. Although section 2(j) uses words of the widest ampli­tude in its two limbs, their meaning cannot be magnified to overreach itself. (a) 'Undertaking' must suffer a contextual and associational shrinkage as explained in Banerjee and in this judgment; so also, service, calling and the like. This yields the inference that all organised activity possessing the triple elements in I (supra), although not trade or business, may still be 'industry' provided the nature of the activity, viz, the employer-employee basis, bears resemblance to what we find in trade or business. This takes into the fold ' industry ', undertakings, calling, and services, adventures ' analogues to the carrying on of trade or business'. All features other than the methodology of carry­ing on the activity viz., in organising the co-operation between employer and employee, may be dissimilar. It does not matter, if on the employment terms there is analogy. III. Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation for or resul­tant of the economic operations. The ideology of the Act be­ing industrial peace, regulation and resolution of industrial dis­putes between employer and workmen, the range of this statu­tory ideology must inform the reach of the statutory definition. Nothing less, nothing more. (a) The consequences are (i) professions, (ii) Clubs, (iii) edu­cational institutions (iv) co-operatives, (v) research institutes (vi) charitable projects and (vii) other kindred adventures, if they fulfil the triple tests listed in I (supra) cannot be exempted from the scope of Section 2 (f). (b) a restricted category of professions, clubs, co operatives and even gurukulas and little research labs, may qualify for exemption, if, in simple ventures, substantially and going by the dominant nature criterion, substantively, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non-employee character of the unit. (b) a restricted category of professions, clubs, co operatives and even gurukulas and little research labs, may qualify for exemption, if, in simple ventures, substantially and going by the dominant nature criterion, substantively, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non-employee character of the unit. (c) If, in a pious or altruistic mission many employ them­selves, free 01 for small honoraria or like return, mainly drawn by sharing in the purpose or cause, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or abrasives working at the bidding of the holiness, divinity or like central persona­lity, and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship, then, the institution is not an industry even if stray servants, manual or technical and hired. Such eleemosynary or like undertakings alone are exempt-not other generosity, compassion, developmental passion or project. IV. The dominant nature test : (a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total un­dertaking, some of whom are not 'workmen' as in the Univer­sity of Delhi case ( AIR 1963 SC 1873 ) or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated na­ture of the departments as explained in the Corporation of Nagpur ( AIR 1960 SC 675 ) will be the true test. The whole under taking will be ' industry' although those who are not 'workmen' by definition may not benefit by the status. (b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the wel­fare activities or economic adventures undertaken by government or statutory bodies. (c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within S. 2(j). (d) Constitutional and competently enacted legislative pro­visions may well remove from the scope of the Act catego­ries which otherwise may be covered thereby. (c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within S. 2(j). (d) Constitutional and competently enacted legislative pro­visions may well remove from the scope of the Act catego­ries which otherwise may be covered thereby. V. We overrule Safdarjung ( AIR 1970 SC 1407 ), Solicitors' case (AIR 1962 SC 108), Gymkhana ( AIR 1968 SC 554 ), Delhi University ( AIR 1963 SC 1873 ), Dhanrajgiri Hospital ( AIR 1975 SC 2032 ) and other rulings whose ratio runs counter to the principles enunciated above, and Hospital Mazdoor Sabha ( AIR 1960 SC 610 ) is hereby rehabilitated.” 9. The inescapable conclusion that emerges from the afore­said discussion devoted to the relevant provisions of the Act and precedents is that an establishment can be taken out of the pale of "industry" only if it can be said to be discharging sovereign or regal function strictly understood and not welfare activities or economic adventures undertaken by Government or statutory bodies. Merely because the employer is a Government department or a local body and the activities undertaken by the Government or local body are beneficial measures in the interest of socio-economic progress of the country, the activities are not exempted from the operation of the Act. 10. We shall therefore proceed to scrutinise the facts of the case and examine whether the functions carried out by the P. W. Department of the Assam Government are sovereign or regal functions. The petitioner Union is a registered trade union under the Indian Trade Unions Act. The membership of the said union is open to all workmen employed as work charged and Muster Roll labourers under the control and management of the Executive Engineer, North Kamrup Division with headq­uarters at Nalbari. The nature of the work done by the members of the are Labour the west fact jut and maintenance of highways, buildings, irrigation channels, etc. The workers engaged are paid wages on the basis of daily work. Four workmen, namely, Sarbashree Pabitra Patgiri, Pratap Sarma. The nature of the work done by the members of the are Labour the west fact jut and maintenance of highways, buildings, irrigation channels, etc. The workers engaged are paid wages on the basis of daily work. Four workmen, namely, Sarbashree Pabitra Patgiri, Pratap Sarma. Kabin Kalita and Upen Kalita, who were all muster roll workers employed in the construction and maintenance of the National Hig­hway under Tihu section of Barama P. W. D. Sub-Division of the North Kamrup P. W. D. Division, were discharged from their services without any enquiry or notice though they had been working as muster roll workers for several years. A dispute having been raised by the P.W.D. Labour Union on behalf of the workmen the Government of Assam referred the same under section 10(1)(c) of the Act to the Labour Court. Assam for adjudication. The Labour Court by its award dated 31st Octo­ber, 1973 held that the P. W. Department of the Government of Assam cannot be held to be an industry as evidence disclosed that the work done by the P. W. D. in which the discharged workmen were employed was only construction of roads and there was nothing to suggest that the activities of the P. W. D. per-took the nature of business, or trade, or manufacture, or call­ing. Accordingly the Labour Court held that the reference under section 10 (1) (c) of the Act was not maintainable. The correctness of the said award of the Labour Court is questioned before us in this writ petition. It cannot be doubted nor is it disputed that the functions and activities of the P. W. Department of the Assam Govern­ment are several and varied. They may relate to construction and maintenance of roads, buildings, irrigational channels, drai­nage channels, construction of irrigation projects, maintenance of workshops, etc. It is Common ground that muster roll wor­kers are employed in all branches of the P. W. D. The definit­ion of "workman'' under the Act is caged in very wide terms. It includes even a casual worker and a seasonal worker also. The Act applies in relation to an industrial dispute in respect of any such person who has been dismissed, or discharged, or retrenched in connection with or as a consequence thereof. It includes even a casual worker and a seasonal worker also. The Act applies in relation to an industrial dispute in respect of any such person who has been dismissed, or discharged, or retrenched in connection with or as a consequence thereof. The section explicitly excludes certain categories of persons, namely a person who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957, or who is employed in the police service or as an officer or other employee of a prison, or who is employed mainly in a managerial or administrative capacity, or who being employed in a supervisory capacity, draws wages exceeding Rs. 1600/ per mensem, or exercises functions mainly of a managerial nature. 11. It is clear from Chapter III of the Assam Public Works Department Manual that the P.W. Department are divided pri­marily into two classes : original works and repairs. The ori­ginal works relate to all new constructions of roads and buildings and repairs relate to maintenance of roads and buildings. Under Rule 350 and 351 of the Manual, muster roll workers are daily labourers. Under Rule 351, for work done by daily labour, the subordinate in charge will prepare a muster roll showing the work done and the amount payable. Such workers are called muster roll workers. The definition is very wide and the statute has pledged itself to bring about social justice and help rapid all-round economic development. The spirit and efficacy of the statute ought not to be dispirited or blunted. So muster Roll worker who is paid daily wages is also a workman within the meaning of the definition of workmen under section 2(s) of the Act. The Madras High Court in Crompton Engineering Co. (Mad­ras) Pvt. Ltd. vs. Additional Labour Court, Madrai and art., (1975) 3 LLJ 207, took a similar view and held that even a casual emp­loyee falls within the definition of "workman" in section 2(s) of the Act. 12. But still, the more perplexing question that pursues is whether the activities of the P.W. Department of Assam Govern­ment are sovereign or regal functions, and fall outside the ope­ration of the Act. It is now well-settled that all functions of the Government are not sovereign or regal functions. 12. But still, the more perplexing question that pursues is whether the activities of the P.W. Department of Assam Govern­ment are sovereign or regal functions, and fall outside the ope­ration of the Act. It is now well-settled that all functions of the Government are not sovereign or regal functions. Those func­tions which a constitutional government can and must undertake for governance and which no private citizen can undertake are above sovereign or regal functions. No doubt in view of the Directive Principles enunciated in Part IV of the Constitution and in view of the ideal of a welfare state which has been placed before the country Governments both at the level of the States as well as at the Centre undertake several welfare activities. So the definition of the word "employer" given by section 2(j) of the Act becomes relevant and significant. A reading of the defi­nition would clearly show that the Legislature intended the appli­cation of the Act to activities of the Government which fall within section 2(1) of the Act. The P.W. Department of the Government may, however dis­charge a dual function. It may perform sovereign or regal func­tions strictly so called and It may also perform functions co­nnected with the activities undertaken by the Government in pur­suance of their welfare policies and in the interest of socio-eco­nomic progress of the country. Therefore we have to examine whether the activities relating to maintenance of National High­way No. 31 by the Public Works Department are regal functions. 13. National Highways are provided for the use and safety of the public. It is in the interest and alike of the safety and convenience of the public that Highways are constructed and maintained by the State. They are essential to ensure the eco­nomic development and unity of India. Safety and security of the citizens and unity of the country are inherent and necessary attributes of sovereign functions. In Halsbury's Laws of England, Fourth Edn., Volume 8, the following passage occurs in para 972: "Government departments are the agents of the executive and their acts bind the Crown." In Corpus Juris Secundum, Volume 39, at p. 946, under the heading "Constitutional Power in General", it is observed as follows : "The establishment of highways is a government function. In Halsbury's Laws of England, Fourth Edn., Volume 8, the following passage occurs in para 972: "Government departments are the agents of the executive and their acts bind the Crown." In Corpus Juris Secundum, Volume 39, at p. 946, under the heading "Constitutional Power in General", it is observed as follows : "The establishment of highways is a government function. The power of providing highways for the use of the public is a branch of the right of eminent domain, weigh right is, as shown in Eminent Domain $ 2, an inherent and necessary att­ribute of sovereignty existing independently of constitutional provisions, although, as indicated in Eminent Domain $ 3, subject to regulation by constitutions." The Supreme Court in Bangalore Water Supply ( AIR 1978 SC 548 ) observed : "........ it is appropriate to state that if there are industrial units severable from the essential functions and possess an entity of their own it may be plausible to hold that the employees of those units are workmen and those undertakings are industries. A blanket exclusion of everyone of the host of employees engaged by government in depart­ments failing under general rubrics like justice, defence, taxation, legislature may not necessarily be thrown out of the umbrella of the Act. We say no more except to observe that closar exploration, not summary rejection, is necessary.” The Orissa High Court in Superintending Engineer, National Highway Project, Bhubaneswar vs. Baidhar Lanka and anr. 197$ Lab. I. C. 553, held that the National Highway Project, which is entirely controlled and managed by the Public Works Department, is not an 'industry', nor it is analogous to trade or business and the employee is not a workman. A Full Bench of the Punjab High Court in State of Punjab vs. Sh. Kuldip Singh and anr., 1983 Lab. I.C. 83, held that the establishment, construction and maintenance of national and State Highways is an essential governmental function. It is no way even remotely analogous to trade or business. Consequently, it cannot possibly come within the ambit of an "industry" as defined under the Act. The Madras High Court in D. Padmenabhan vs. The State of Tamilnadu, 1976 IILJJ. 83, held that the Public Works Department is not an industry in respect of its activities relating to cons­truction of Government buildings, such as hospitals, colleges, schools and Court buildings. 14. The Madras High Court in D. Padmenabhan vs. The State of Tamilnadu, 1976 IILJJ. 83, held that the Public Works Department is not an industry in respect of its activities relating to cons­truction of Government buildings, such as hospitals, colleges, schools and Court buildings. 14. Therefore, there can be no doubt that the activities of the Public Works Department of Assam Government relating to -establishment, construction and maintenance of National Highways are governmental functions and fall outside the terrain and fron­tiers of operation of the Act. 15. In the result the writ petition fails and it is accordingly dismissed. No costs.