M/S Arihant Siddhi Housing Society vs. Pushpa Vishnu More is a case which provides answer to the issue whether a cooperative housing society comes under the definition of industry i.e. Section 2(j) of the Industrial Dispute Act,1947 and also whether the services of the watchman should be reinstated or not according to the order passed by the labour court.
M/S ARIHANT SIDDHI HOUSING SOCIETY JUDGEMENT DATE: JUNE 22, 2018
M/S ARIHANT SIDDHI COOPERATIVE HOUSING SOCIETY CITATION: WRIT PETITION NO. OF 787 OF 2007
FACTS OF M/S ARIHANT SIDDHI CASE:
- In this case, Arihant Siddhi society is the petitioner who appointed respondent no.1 as the watchman. It terminated his services upon his completion of 60 years of age, with effect from November 1, 2000.
- The petitioner stated that the termination was with mutual consent and it paid the respondent’s retirement benefit, and he accepted it. Then the respondent demanded for reinstatement.
- The respondent alleged his services were terminated with no proper inquiry and were not provided with proper retrenchment compensation.
- The petitioner then stated that it is a housing society, and the respondent rendered personal services.
- Then the labour court allowed the plea of the respondent and stated that though the society was a housing cooperative society but it earned its profit from its member so it will come in the definition of industry and rejected the claim of petitioner’s non- maintainability.
- Then the petitioner challenged the award passed by the labour court at Mumbai regarding the industrial dispute act.
- Whether the cooperative housing society comes under the definition of industry, i.e. Section 2(j) of industrial dispute act?
- Whether the services of the respondent no. 1 must be reinstated or not with continuity of services and full back wages as ordered by the labour court?
ARIHANT SIDDHI SOCIETY’S CONTENTIONS (PETITIONER):
- The petitioner argued in this case that the termination was with mutual consent and the respondent no. 1 has also agreed to the retirement benefit/ ex gratia payment made by the petitioner.
- The petitioner further stated that it is a housing society and the respondent no.1 has rendered personal services. It will not be considered as an industry under industrial dispute act nor will the respondent no. 1 be considered as workman under the industrial dispute act.
WATCHMAN’S CONTENTIONS (RESPONDENT NO. 1):
- The respondent no. 1 contended that he was a permanent employee of the petitioner.
- He also stated that his termination was without proper enquiry and he was not offered proper retrenchment benefit.
- JUSTICE S.C. GUPTE: The housing society will come under the definition of industry if its predominant function is based on the commercial activity rather than the adjunct functions.
- In this case, the society was charging from its members for displaying neon signs for the advertisement of their coaching classes and dispensary and this is not considered as an industry that is carrying on the business of hiring out of neon signs or allowing advertisements under the definition of industry.
- Justice S.C. Gupte further stated that the services rendered by respondent no. 1 to the society and its members will not be considered as the personal services.
- He further stated that there was an error in the labor’s decision court regarding earning income on the premises, which could not be considered as housing society.
- The court set aside and quashed the order of the labour court, stating with the reference of the previous case of M/S SHANTIVAN II CO. OP. HSG. SOCIETY VS SMT. MANJULA GOVIND MAHIDA (WRIT PETITION NO. 360 0F 2007) wherein the court held that the society was carrying out many activities and its commercial activity was not a predominant activity and is considered as auxiliary activity. Hence, the housing society will not be considered as an industry under the definition of industry of industrial dispute act.
- The court also referred to the triple test laid down in Bangalore Water Supply And Sewarage Board VS A. Rajappa wherein it was held that the main activity or dominant activity is to provide services to its own members and the other activities are merely auxiliary activities, then it will not be considered as an industry for industrial dispute act, 1967.
- The court further set aside the order of reinstatement with continuity of services and full back wages and considered the impugned award by the labour court as an error of jurisdiction in the premises.
From this case, we can conclude that to consider the undertaking as an industry under the definition of industrial dispute act and the triple test laid down in Bangalore Water Supply case; its main activity or the predominant activity must be a commercial activity rather than its adjunct activity. If its pre-dominant activity is not considered a commercial activity, then it will not consider its employee as a workman for the purpose of the industrial dispute act.
Found M/S Arihant Siddhi Housing Society vs. Pushpa Vishnu More Case summary useful? We have a bunch of useful topics from labour law that will help you in your preparation here >>> LABOUR LAW
Check out our YouTube Channel for free legal videos >>> LAW PLANET YT