CSIR’s Central Institute Of Medicinal And Aromatic Plants Not An ‘Industry’ Under Industrial Disputes Act: Allahabad High Court

The High Court held that institutions engaged primarily in scientific research, without any commercial or economic character, cannot be treated as industrial establishments.

The Court was hearing a batch of writ petitions challenging a common award passed by the Central Government Industrial Tribunal-cum-Labour Court, Kanpur, which had held CIMAP to be an “industry” and had assumed jurisdiction to adjudicate industrial disputes raised by workmen.

The decision was rendered by Justice Irshad Ali, who observed that “the Central Institute of Medicinal and Aromatic Plants, Lucknow, being a purely research and scientific organisation functioning under the Council of Scientific and Industrial Research, does not fall within the definition of 'Industry' under Section 2(j) of the Industrial Disputes Act, 1947”.

Background

Conciliation proceedings were initiated by certain workmen before the Regional Labour Commissioner (Central), Kanpur, alleging illegal disengagement by CIMAP. Upon failure of conciliation, the disputes were referred to the Central Government Industrial Tribunal-cum-Labour Court.

CIMAP contested the proceedings, asserting that it was not an “industry” under the Industrial Disputes Act, 1947, and that service disputes of its employees were governed by the Administrative Tribunals Act, 1985, as CSIR had been notified under Section 14(2) of the said Act.

Despite these objections, the Tribunal proceeded to pass a common award holding CIMAP to be an industry, without adjudicating the issue based on settled legal principles governing research institutions.

Aggrieved, CIMAP and other CSIR institutes approached the High Court under Article 226 of the Constitution.

Court’s Observation

The Allahabad High Court examined the definition of “industry” under Section 2(j) of the Industrial Disputes Act, 1947, and noted that the same contemplates activities which are analogous to trade, business, manufacture, or commercial undertaking. The Court observed that the statutory definition does not extend to institutions engaged solely in academic or scientific research lacking any commercial character.

Placing reliance on the Supreme Court’s decision in Physical Research Laboratory v. K.G. Sharma (1997), the Court noted that institutions carrying on systematic research activity do not become industries merely because employees are engaged, unless the activity is intended to produce and distribute services meant to satisfy human wants in a commercial sense.

The Court also relied on a coordinate Bench decision which had held that CSIR’s Central Drug Research Institute, Lucknow, was not an industry under the Industrial Disputes Act, following the ratio in Physical Research Laboratory.

On the facts of the matter, the Court found that CIMAP is primarily engaged in scientific research relating to medicinal and aromatic plants, functions under CSIR, and is funded through government grants. Its object is not to carry on trade, business, or profit-making activity, but to conduct research in the national interest and for public welfare.

The Court further observed that CSIR and its constituent institutes fall within the ambit of the Administrative Tribunals Act, 1985, and therefore, service-related disputes of their employees are governed by the said statutory framework, not by the Industrial Disputes Act.

In light of these findings, the Court held that the Industrial Tribunal lacked jurisdiction to adjudicate the disputes, as CIMAP could not be classified as an industry in law.

Conclusion

Accordingly, the writ petitions filed by CIMAP and other CSIR institutes were allowed, and the impugned common award was set aside insofar as it related to them. Certain writ petitions filed by individual workmen were dismissed.

Cause Title: Central Institute of Medicinal and Aromatic Plants & Ors. v. Sri Rishi Dev Mishra & Ors (Neutral Citation: 2025:AHC-LKO:79913)

Appearances

Petitioners: Asit Kumar Chaturvedi, Dharmendra Kumar Dixit, Advocates

Respondents: Mata Prasad Yadav, Advocate

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