Housing Society Is Not An Industry And Its Employees Are Not Workmen: Allahabad HC [Read Judgment]

The Allahabad High Court reiterated that a housing society is not an industry within the Industrial Disputes Act, 1947 and its employees are not workmen.

In a petition filed by Arun Vihar Residents Welfare Association, G.B. Nagar, through Advocate Diptiman Singh, challenging the decision of a Labour Court, Justice Dr. Yogendra Kumar Srivastava held that "…society was registered under the Societies Registration Act, 1860…and its main object is to provide the necessary maintenance facilities to the apartment owners who are its members and as such the same cannot be held to be an industry".

The Labour Court had granted relief to the Respondent herein, whose services had been terminated by the Petitioner-society, stating that "the termination having been made without following the provisions of Section 6N of the U. P. Industrial Disputes Act, 1947, the same would amount to an illegal retrenchment…"

Since the definitions of expressions "industry", "industrial dispute" and "workman" in the ID Act and U.P.I.D. Act were similar, the high court proceeded to adjudicate the conflict in terms of the law laid down by the Apex Court in Bangalore Water Supply and Sewerage Board v. A. Rajappa, (1978) 2 SCC 213.

"…in order for an activity to be held to be covered within the ambit of the term "industry", the activity should be an organized one and not that which pertains to private or personal employment. The distinction between such classes of workers who are employed as domestic servants to render personal services to their masters with those covered by the definition of the term "workmen" in terms of the definition under Section 2(j) of the I.D. Act, 1947 was noticed in the case of Bangalore Water Supply and Sewerage Board, and the services rendered by such domestic servants engaged for providing personal services were held to be outside the purview of the activity which may be referred as being an "industry"", the court observed.

The court also noted that the question whether a society is an industry, was considered in Som Vihar Apartment Owners Housing Maintenance Ltd. v. Workmen, (2002) 9 SCC 652. It was held therein that when personal services are rendered to members of a society which is constituted only for the purposes of those members, the activity would not be treated as an industry nor the employees would be treated as workmen.

Reliance was also placed on M/s Arihant Siddhi Co-operative Housing Society Ltd. v. Pushpa Vishnu More & Ors., 2018 (159) FLR 271, wherein it was clarified that where the predominant nature of the activity of the cooperative housing society was to render services to its own members, even if it carries on any commercial activity as an adjunct to its main activity it could not be termed as an industry within the meaning of Section 2(j) of the I.D. Act, 1947.

"Any ancillary activities which may be carried on by such a housing society would be treated to be merely an adjunct and applying the "dominant nature test" the same would not change the nature of the activity so as to bring it within the purview of the term "industry"", the bench said.

Holding that reliance of the Respondent on the judgment in Karnani Properties Ltd. v. State of West Bengal & Ors., (1990) 4 SCC 472 was misconceived, it was clarified that it was a case of a real estate company owning mansion houses and employing workers for maintenance services which was held to be an industry therein, and the same could not be a precedent for a housing society.

"The whole purpose of the I.D. Act, 1947 was to focus on resolution of industrial disputes and regulation of industrial relations and not to meddle with "every little carpenter in a village or blacksmith in a town who sits with his son or assistant to work for the customers who trek in", the court asserted.

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