Chief Conservator of Forests v Jagannath Maruti Kondhare (1996)

Two things, and both are examinable on their own.

First, it applies the sovereign function exception after Bangalore Water Supply and shows how narrow that exception really is. The State argued that its Forest Department was discharging an inalienable public function — protecting forests and the environment — and so fell outside "industry". The Court refused. Welfare and environmental work is not a sovereign function "strictly understood".

Second, it is a leading case on the unfair labour practice of keeping workers perpetually temporary: employing people as badlis, casuals or temporaries and continuing them as such for years to deny them permanency.

The appeals were by the Chief Conservator of Forests, State of Maharashtra.

The workmen had been employed on the Pachgaon Parwati Scheme near Pune and on social forestry work in Ahmednagar district. The Pachgaon Parwati Scheme came from a Government Resolution of April 1976, initially for five years, over about 245 hectares on a hill plateau on the southern outskirts of Pune, to create a park by "bio-aesthetic development for the benefit of the urban population". On the State's own affidavit the scheme was "primarily intended to fulfil bio-aesthetic, recreational and educational aspirations of the people which will have inestimable indirect benefit of producing enlightened generation of conservationists of nature inclusive of forests and wild life for the future".

The workmen complained to the Industrial Courts at Pune and Ahmednagar of unfair labour practice under item 6 of Schedule IV. They had been "in the employment of the State for 5 to 6 years and in each year had worked for period ranging from 100 to 330 days".

The State took the jurisdictional point — that the Forest Department was not an "industry" at all — for the first time in the High Court. The Supreme Court allowed it to be argued because of its importance, but, rather than remand and subject the workmen to "second round of litigation causing hardship", directed the State to place the actual data before it.

1. Is the Forest Department of a State Government an "industry" under s. 2(j)?
2. Did the State commit the unfair labour practice in item 6 of Schedule IV?

Both questions answered against the State.

The Forest Department is an industry

The Court applied the dominant nature test from Bangalore Water Supply, quoting Krishna Iyer J's propositions, of which two matter here:

"(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 Section 2(j)."

The State's argument would have swallowed the rule: "if we were to extend the concept of sovereign function to include all welfare activities as contended on behalf of the appellants, the ratio in Bangalore Water-Supply case would get eroded, and substantially." The Court declined, restating the position that "except the strictly understood sovereign function, welfare activities of the State would come within the purview of the definition of industry; and, not only this, even within the wider circle of sovereign function, there may be an inner circle encompassing some units which could be considered as industry if substantially severable."

The argument that the work was inalienable because "the type of work which was undertaken under that scheme could not have been done by a private individual or entity" failed on the State's own description of the scheme — a public park for recreation and education.

Conclusion: the Forest Department "cannot be regarded as a part of sovereign function of the State, and so, it was open to the respondents to invoke the provisions of the State Act. We would say the same qua the social forestry work undertaken in Ahmednagar district. There was, therefore, no threshold bar in knocking the door of the Industrial Courts."

The unfair labour practice

Item 6 of Schedule IV reads:

"To employ employee as 'badlis', casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent employees."

The Industrial Court had found the practice established because the workmen had served five to six years, working between 100 and 330 days in each year. The Supreme Court examined the State's own statement of days worked — one workman, Gitaji Baban Kadam, having worked 4½ days in 1978 but 322 days in 1982 — and upheld the finding.

Note the element the item requires: the continuation as casual must be with the object of denying permanency. That object is inferred from the pattern of long, substantial and repeated engagement.

The welfare and environmental activities of a State Forest Department are not sovereign functions strictly understood, and are therefore an "industry" under s. 2(j). Employing workers as casuals or temporaries and continuing them as such over years of substantial annual service, so as to deny them permanency, is an unfair labour practice within item 6 of Schedule IV.

• Direct question: What are sovereign functions for the purposes of the definition of industry? Use Bangalore Water Supply proposition IV for the rule and this case for its application — with the point that even within a sovereign department, severable units can be industries.
• Problem question pattern: a government department resists an industrial adjudication on the ground that it performs public duties. Unless the function is sovereign in the strict sense — legislation, justice, defence, and the categories later excluded by the 1982 amendment — the objection fails.
• On casual employment: this is the authority for attacking the practice of perpetual temporary status. State item 6 in full and show the object element being inferred from years of near-full-time work.
• Read with: Corporation of the City of Nagpur for the regal/non-regal distinction, and Bangalore Water Supply for the triple test.