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Nine-judge Bench modifies 1978 industry definition test
LiveLaw··20 Aug
On 20 August 2026, a nine-judge Supreme Court Bench modified by 5-4 the triple test used since 1978 to define industry under Section 2(j) of the Industrial Disputes Act. Chief Justice Surya Kant said some elements of Bangalore Water Supply versus Rajappa needed reformulation. Four judges dissented, including Justices BV Nagarathna, Dipankar Datta, Ujjal Bhuyan and Joymalya Bagchi.
Prism
What It Means For You
- If you have a pending industrial dispute under the 1947 Act, the Court said that case will still be decided on the 1978 Bangalore Water Supply triple test.
- New disputes after 20 August 2026 are the ones the majority said should use the reformulated test.
- The Industrial Relations Code, 2020, already in force from November 2025, was left uninterpreted, so that statute's definition of industry is a separate question.
What's Happening
- The Bench comprised Chief Justice Surya Kant and Justices BV Nagarathna, PS Narasimha, Dipankar Datta, Ujjal Bhuyan, Satish Chandra Sharma, Joymalya Bagchi, Alok Aradhe and Vipul M Pancholi.
- Judgment had been reserved on 19 March 2026 after three days of hearing.
- Justice Nagarathna said social welfare schemes of government departments can still be industrial activity depending on their nature, and that the 2005 reference was unnecessary.
How The 1978 Triple Test Reached A Nine-Judge Bench
- Justice VR Krishna Iyer's 1978 majority had treated profit motive as largely irrelevant and excluded only core sovereign functions such as defence, law and order and the judiciary.
- Attorney General R Venkataramani told the Bench that the tests were sound but had been applied too widely to governmental and welfare work.
- Senior advocate Indira Jaising argued the 1947 Act was beneficial legislation and that commercial motive should not become a threshold for workers' remedies.
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