While noting that the Dharmarath Trust was having commercial operations and was carrying out the activities, which were not purely religious/spiritual, in a selfless and volunteer manner, the Jammu & Kashmir and Ladakh High Court has held that the Trust can be described as an ‘industry’ under the Industrial Disputes Act, 1947.

The petitioner approached the High Court seeking quashment of an order of the Industrial Tribunal, Jammu, whereby an award was passed in favour of the respondent employee on a reference made to it by the Government of Jammu and Kashmir.

The Single Bench of Justice M A Chowdhary held, “In view of Triple Test as referred to hereinabove applied to the activities of the Dharmarth Trust, it can safely be held that the petitioner Trust was having the activities in a systemic and organized manner, and the activities of the Trust were for the production and distribution of services, designed to satisfy human wants or wishes including spiritual or religious in nature, the Trust was also having commercial operations and given to the functional nature of its activities, it can be stated that the petitioner Dharmarth Trust was carrying out the activities, which were not purely religious/spiritual in a selfless and volunteer manner. In view of the functional nature of its specific activities, the petitioner-Trust can be described to be an ‘industry’ under the Industrial Disputes Act, 1947 so as to subject the same to the provisions of the Industrial Disputes Act.”

Advocate Ashwani Thakur represented the Petitioner.

Factual Background

The second respondent was engaged as a Safaikaramchari for a period of three months, with effect from April 18, 1991. The second respondent allegedly absented from duty w.e.f. October 22, 2000, to October 26, 2000, and was issued a show cause notice by the petitioner-Trust. The second respondent again absented himself w.e.f. November 2, 2000, to November 7, 2000, and the Administrator of Shri Raghunath ji temple recommended his disengagement, not being satisfied after notice to him to explain his conduct. The second respondent again absented himself and was finally disengaged by the Administrator Shri Raghunath ji temple.

By virtue of the impugned order, the Tribunal held the termination of the services of the second respondent illegal and quashed the termination order. The Tribunal also held the second respondent to be in continuous service of the petitioner-Trust and held him entitled to receive back-wages to the extent of 50% from the date of his termination till the passing of the award, in favour of the second respondent. Aggrieved by the impugned order, the petitioner assailed the said award before the court.

Arguments

The petitioner challenged the impugned award on the ground that the award of the Industrial Tribunal/Labour Court was passed without jurisdiction and was based on misconception of law on the counts that Dharmarath Trust is not an industry within the meaning of Section 2(j) of the Industrial Tribunal Act, 1947 and secondly, Section 25-F of the Act has no application at all.

Reasoning

The Bench explained that in order to determine whether the Industrial Disputes Act can apply to the Dharmarth Trust, it has to be seen whether the activities of the Trust are commercial or analogous to trade or business or even if the surplus generated is used for charitable purposes. “Therefore, the applicability of the Industrial Disputes Act to the petitioner Dharmarth Trust has to be determined by the functional nature of its specific activities not just its overall charitable designations”, it added.

The Bench noted that the courts have consistently applied the Triple test and dominant nature test established as crystallised in the landmark case of Bangalore WaterSupply and Sewerage Board Vs. R. Rajappa & Ors., reported in (1978), to determine if an entity is an ‘industry’ under Section 2(j) of the Act. These include the questions of whether the organisation engages in a systemic and organised activity. Secondly, whether there is cooperation between the employer and the employees, and thirdly, whether the activity of the organisation is for the production or distribution of goods or services, designed to satisfy human wants or wishes (excluding those that are merely spiritual or religious in nature).

Applying the triple test, the Bench found that the petitioner Trust could be described as an ‘industry’ under the Industrial Disputes Act, 1947 so as to subject the same to the provisions of the Industrial Disputes Act. Considering that the activities of the Dharmarth Trust, fall within the definition of the ‘industry’ as defined under Section 2(j) of the Industrial Disputes Act, the Bench held that the relationship between the respondent and the petitioner Trust could be stated to be that of employer and workman as contemplated under the Industrial Disputes Act.

Coming to the facts of the case, the Bench also took note of the inaction on the petitioner to assail the reference or its validity till the petition was filed in 2005, after the filing of the impugned award in ex parte. Thus, in light of such facts and circumstances, the Bench dismissed the petition while upholding the impugned award.

Cause Title: Dharmarth Trust J&K v. Industrial Tribunal (Neutral Citation:2025:JKLHC-JMU:419)

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Jammu & Kashmir & Ladakh High CourtJustice M A Chowdhary

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.