Madhya Pradesh High Court
Army Welfare Housing Organisation vs Shivram Verma & Anr. on 11 February, 2026
Author: Maninder S. Bhatti
Bench: Maninder S. Bhatti
NEUTRAL CITATION NO. 2026:MPHC-JBP:12200
1 WPS-1706-2004
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE MANINDER S. BHATTI
ON THE 11th OF FEBRUARY, 2026
WRIT PET. (SERVICE) No. 1706 of 2004
ARMY WELFARE HOUSING ORGANISATION
Versus
SHIVRAM VERMA & ANR.
Appearance:
Shri Manoj Chandurker - Advocate for the petitioner.
None for the respondent.
ORDER
This petition has been filed by the petitioner under Article 226/227 of
the Constitution of India while praying for following reliefs:-
“I. to quash the impugned Award dated 4.7.2003
(Annex. P-4) and to hold that the respondent No.1 is not
entitled for re-instatement.
II. to grant any other relief as deemed fit and proper by
this Hon’ble Court.
III. to award cost of the petition.”
2. The facts as detailed in the body of the petition reveal that the
respondent No.1/workman had approached the Labour Court questioning the
termination of his service. The Labour Court vide impugned award dated
04.07.2003, issued a direction for the reinstatement of the
workman/respondent No.1. Assailing the said award, this petition is filed.
3. Learned counsel for the petitioner contends that the impugned award
is unsustainable on the count that a specific objection was taken in response
to the written statement by the present petitioner that the present petitioner is
Signature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:12200
2 WPS-1706-2004
a Housing Cooperative Society registered under the provisions of the
Cooperative Society Act and was thus, not covered within the definition of
the ‘Industry’ which is stipulated in Section 2(j) of the Industrial Disputes
Act, 1947. It is contended by the counsel that as the society does not indulge
itself in any commercial activity, and in fact functions on non-profit basis.
Hence, the same could not be brought within the four corners of the
definition of ‘Industry’ as provided under Section 2(j) of the Industrial
Disputes Act. It is further contended by the counsel that society functions
within the group of members, and not beyond the group of members. The
society does not venture into any kind of commercial activity outside the
members of the society. In support of his contention, the petitioner has relied
upon the decision of the High Court of Judicature at Bombay in the case of
M/s. Arihant Siddhi Cooperative Housing Society Ltd. vs. Pushpa Vishnu
More and Others in W.P.No.787 of 2007 decided on 22.06.2018.
4. It is contended by the counsel that apart from the aforesaid, a
specific ground was taken by the present petitioner that the
respondent/workman was engaged for a fixed period commencing from
21.11.1990 to 1993 and as it is a fixed-term appointment, it was not a case of
illegal retrenchment. However, this aspect was also not considered by the
Labour Court while passing the impugned order. Hence, counsel submits that
the same deserves to be quashed.
5. Having considered the submission advanced on behalf of the
petitioner, and a perusal of the record produced by the counsel for the
petitioner reflects that the respondent/workman approached the Labour Court
Signature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:12200
3 WPS-1706-2004
seeking reinstatement, as according to the respondent/workman, he was
employed with the petitioner/employer on 11.01.1990 as Chowkidar. The
petitioner was initially appointed on a probation period, and thereafter, he
continued his services till October/November 1993. In support of the claim,
the workman examined himself. The respondent filed a response to the said
statement of the claim and in paragraph 5 of the reply, a specific stand was
taken that the dispute before the Labour Court was not maintainable as the
petitioner’s society/employer was not carrying out any kind of commercial
activity and was operating amongst the members of the society only and no
commercial activity was being carried out by the petitioner’s society outside
the members of the society. In support of the stand, one D.S. Patil was
examined by the respondent.
6. After considering the rival stand, the Labour Court passed the
impugned award. A perusal of the said award passed by the Labour Court
reflects that the objection regarding the petitioner’s status as an Industry was
considered by the Labour Court in paragraphs 9 and 10, and the Labour
Court concluded as under:
“| 9 | तीय प ारा यह आप ली गई क तीय प सं थान उ ोग क ण े ीम
नह ं आता। य क यह आम वेलफेयर सोसायट है । तथा सोसाइट ए ट के अ तगत
पंजीब है । उसका काय क याणकार काय है । जससे वह उ ोग क ण े ी म नह ं
आता जससे आवेदक का आवेदन प चलन यो य नह ं है । इस संबंध म 2002
ए.आई.आर. सु ीम कोट डबल यू. 2804 एवं 2002 एल.आई. सी. 2468 का याय
ा त तुत कए गए। तुत याय ा त म ितपा दत िस ा त सवमा य है ।
क तु वह इस करण से सवथा िभ न है जससे तीय प को कोई लाभ ा नह ं
होता।
| 10 | अनावेदक, दार तुत उ आप वीकार कए जाने यो य नह ं है । इस संबंध
म मान. उ च यायालय पंजाब एवं ह रयाणा दारा सी. ड यू. पी. नंबर 1695/82 म
पा रत आदे श 9.2.88 अवलोकनीय है । इस याय ा त के प र े य म तीय प
सं थान उ ोग क ण े ी म आता है । जससे उसका यह आवेदन प चलन यो य है ।
अनावेदक क आप अमा य क जाती है ।”
7. A perusal of the aforesaid paragraphs reflects that the Labour Court
Signature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:12200
4 WPS-1706-2004
while dealing with the objection of the present petitioner regarding
maintainability of dispute before the Labour Court observed that the decision
in the case of Som Vihar Apartment Owners Housing Maintenance Mazdoor
reported in 2002 AIR SCW 2804 = (2002) 9 SCC 652 was not applicable so
far as the facts of the present case were concerned. The decision in the case
of Som Vihar Apartment (supra) was basically in respect of a dispute which
was raised by a workman against the society of apartment owners. The
society of apartment owners had employed personnel for rendering personal
services to their members, and accordingly, considering the aforesaid, the
Apex Court concluded that the group of employees engaged by the flat
owners for rendering personal services did not label the said society to be an
industry for the purposes of the Industrial Disputes Act.
8. The Apex Court in the case of Som Vihar Apartment (supra) in
paragraph 7 has held as under:
“7. Indeed this Court in Rajappa’s case (supra) noticed the
distinction between such classes of workmen as domestic servants
who render personal service to their masters from those covered
by the definition 2(J) of the Industrial Disputes Act. It is made
clear if literally interpreted these words are of very wide amplitude
and it cannot be suggested that in its sweep it is intended to
include service however rendered in whatsoever capacity and for
whatsoever reason. In that context it was said that it should not be
understood that all services and callings would come within the
purview of the definition; service rendered by a domestic servant
purely in a personal or domestic matter or even in a casual way
would fall outside the definition. That is how this Court dealt with
this aspect of the matter. The whole purpose of the Industrial
Disputes Act is to focus on resolution of industrial disputes and
the regulation will not meddle with every little carpenter or a
blacksmith, a cobbler or a cycle repairer who come outside the
idea of industry and Industrial dispute. This rationale which
applies all along the line to small professions like that of domesticSignature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:122005 WPS-1706-2004
servants would apply to those who are engaged by a group of flat
owners for rendering personal services even if that group is not
amorphous but crystallised into an Association or a society. The
decision in Rajappa’s case if correctly understood is not an
authority for the proposition that domestic servants are also to be
treated to be workmen even when they carry on work in respect of
one or many masters. It is clear when personal services are
rendered to the members of a society and that society is
constituted only for the purposes of those members to engage the
services of such employees, we do not think its activity should be
treated as an industry nor are they workmen. In this view of the
matter so far as the appellant is concerned it must be held not to be
“industry”. Therefore, the award made by the Tribunal cannot be
sustained. The same shall stand set aside.”
9. The Labour Court, thereafter in paragraph 10 of his judgment,
concluded that the present petitioner’s society was falling within the
definition of Industry in terms of the decision of the Punjab and Haryana
High Court in CWP No.1695/1982 (Indian Red Cross Society vs. Additional
Labour Court and Others) decided on 09.02.1988. To deal with the aforesaid
findings so arrived at by the Labour Court, it is apposite to refer to the
landmark decision of the Apex Court in the case of Bangalore Water Supply
& Sewerage Board v. A. Rajappa reported in (1978) 2 SCC 213.
10. The Apex Court in the case of Bangalore Water Supply
(supra), while dealing with the definition of Industry as provided in the
Industrial Disputes Act, has held in paragraphs 140, 141, 150, 158, 159 and
160 as under:-
“140. “Industry’, as defined in Section 2( j) and explained
in Banerji, has a wide import.
“(a) Where (i) systematic activity, ( ii) organized by co-operation
between employer and employee (the direct and substantial
element is chimerical) (iii) for the production and/or distribution of
goods and services calculated to satisfy human wants and wishes
(not spiritual or religious but inclusive of material things orSignature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:122006 WPS-1706-2004
services geared to celestial bliss e.g. making, on a large
scale prasad or food), prima facie, there is an ‘industry’ in that
enterprise.
(b ) Absence of profit motive or gainful objective is irrelevant, be
the venture in the public, joint, private or other sector.
(c) The true focus is functional and the decisive test is the nature
of the activity with special emphasis on the employer-employee
relations.
(d ) If the organization is a trade or business it does not cease to be
one because of philanthropy animating the undertaking.”
141. Although Section 2( j) uses words of the widest amplitude in
its two limbs, their meaning cannot be magnified to overreach
itself.
“(a) ‘Undertaking’ must suffer a contextual and
associational shrinkage as explained in Banerji and in
this judgment; so also, service, calling and the like. This
yields the inference that all organized activity
possessing the triple elements in I, although not trade or
business, may still be ‘industry’ provided the nature of
the activity, viz. the employer-employee basis, bears
resemblance to what we find in trade or business. This
takes into the fold of ‘industry’ undertakings, callings
and services, adventures ‘analogous to the carrying on
the trade or business’. All features, other than the
methodology of carrying on the activity viz. in
organizing the co-operation between employer and
employee, may be dissimilar. It does not matter, if on
the employment terms there is analogy.”
***
150. Each of us is likely to have a subjective notion about
“industry”. For objectivity, we have to look first to the words used
in the statutory provision defining industry in an attempt to find
the meaning. If that meaning is clear, we need proceed no further.
But, the trouble here is that the words found there do not yield a
meaning so readily. They refer to what employers or workers may
do as parts of their ordinary avocation or business in life. When
we turn to the meaning given of the term “worker” in Section 2(s)
of the Act, we are once more driven back to find it in the bosom of
“industry”, for the term “worker” is defined as one:
“employed in any industry to do any skilled or unskilled
manual, supervisory, technical or clerical work for hireSignature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:122007 WPS-1706-2004
or reward, whether the terms of employment be express
or implied, and for the purposes of any proceeding
under this Act in relation to an industrial dispute,
includes any such person who has been dismissed,
discharged or retrenched in connection with or as a
consequence of, that dispute, or whose dismissal,
discharge or retrenchment has led to that dispute”.
The definition, however, excludes specifically those who are
subject to the Army Act, 1950 or the Air Force Act, 1950, or the
Navy Discipline Act, 1934, as well as those who are employed in
the Police Service or officers and other employees of a prison, or
employed in mainly managerial or administrative capacities or
who, being employed in supervisory capacity, draw wages
exceeding Rs 500 per mensem.
***
158. It seems to me that the definition was not meant to provide
more than a guide. It raises doubts as to what could be meant by
the “calling of employers” even if business, trade, undertaking or
manufacture could be found capable of being more clearly
delineated. It is clear that there is no mention here of any profit
motive. Obviously, the word “manufacture” of employers could
not be interpreted literally. It merely means a process of
manufacture in which the employers may be engaged. It is,
however, evident that the term “employer” necessarily postulates
employees without whom there can be no employers. But, the
second part of the definition makes the concept more nebulous as
it, obviously, extends the definition to “any calling, service,
employment, handicraft or industrial occupation or avocation of
workmen”. I have already examined the meaning of the term
“workmen” which refers us back to what is an “industry”. It seems
to me that the second part, relating to workmen, must necessarily
indicate something which may exclude employers and include an
“industry” consisting of individual handicraftsmen or workmen
only. At any rate, the meaning of industrial disputes includes
disputes between workmen and workmen also. Therefore, I cannot
see how we can cut down the wide ambit of last part of the
definition by searching for the predominant meaning in the first
part unless we were determined, at the outset, to curtail the scope
of the second part somehow. If we do that, we will be deliberately
cutting down the real sweep of the last part. Neither “noscitur a
sociis” rule nor the “ejusdem generis” rule are adequate for such a
case.
Signature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:12200
8 WPS-1706-2004
159. There is wisdom in the suggestion that in view of these
difficulties in finding the meaning of the term ‘industry”, as
defined in the Act, it is best to say that an industry cannot strictly
be defined but can only be described. But, laying down such a rule
may again leave too wide a door open for speculation and
subjective notions as to what is describable as an industry. It is,
perhaps, better to look for a rough rule of guidance in such a case
by considering what the concept of “industry” must exclude.
160. I think the phrase ‘analogous to industry’, which has been
used in the Safdarjung Hospital case could not really cut down the
scope of “industry”. The result, however, of that decision has been
that the scope has been cut down. I, therefore, completely agree
with my learned Brother that the decisions of this Court
i n Safdarjung Hospital case and other cases mentioned by my
learned Brother must be held to be overruled. It seems to me that
the term “analogous to trade or business” could reasonably mean
only activity which results in goods made or manufactured or
services rendered which are capable of being converted into
saleable ones. They must be capable of entering the world of “res
commercium” although they may be kept out of the market for
some reason. It is not the motive of an activity in making goods or
rendering a service, but the possibility of making them marketable
if one who makes goods or renders services so desires, that should
determine whether the activity lies within the domain or circle of
industry. But, even this may not be always a satisfactory test.”
11. Thus, in view of the aforesaid decision of the Apex Court, it is
undisputed that the absence of profit, motive or gainful objective is irrelevant
while considering the factum of entity to be an industry or not. It is further
important to take note that the Apex Court considered the aspect of where the
goods or services are rendered in order to satisfy human wants and wishes,
although not trade or business, still brought within the definition of Industry.
12. The Apex Court also considered the term “analogous to trade or
business” and concluded that the said terms could reasonably mean only
activity which results in goods made or manufactured or services rendered
which are capable of being converted into saleable ones. They must be
Signature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:12200
9 WPS-1706-2004
capable of entering the world of res commercium, although they may be kept
out of the market for some reasons. It is not the motive of an activity in
making goods or rendering services, but the possibility of making goods
marketable if one who makes goods or renders services so desires, that
should determine whether the activity lies within the domain of the circle of
industry.
13. The present petitioner in paragraph 5 of the reply to the statement
claim stated as under:-
“5. It is submitted that in so far as the functions of the respondent
is concerned, it carries out charitable and welfare functions, and
therefore, it cannot be regarded as “an industry” within the
meaning of the Industrial Disputes Act, 1947. It is submitted that
the respondent under the ageis of the Adjutant General’s Branch,
Army Headquarters, is carrying out its welfare functions by
supervising and promoting the construction of residential dwelling
units for serving and retired army personnel, on a “no profit no
loss basis” and that the fund for which are solely financed by the
registrants of the dwelling unit purely on “self financing basis”. It
is pertinent to state that the Central Covernment has pursuant to
the amendment of Income Tax Act, 1961, by the Finance Act
1981 introduced the section 10 (23) (AA) whereby an exemption
has been granted to the respondent for “welfare and charitable
nature” and scope in application of it’s activities which it executes
for the welfare and the benefit of serving and retiring army
personnel. The respondent as such, therefore, cannot be deemed to
be industry within the scope of Industrial Disputes Act-1947, and
therefore, the Labour Court has no jurisdiction to entertain and
adjudicate upon the claims of the Petitioner herein, which
otherwise are frivolous, mis-conceived and base-less.”
14. If the contents of paragraph 5 of the reply to the statement claim
are placed in juxta position with the aforesaid observations made by the
Apex Court in the case of Bangalore Water Supply (supra) it would reveal
that the activities which are being carried by the petitioner’s society, bring the
Signature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:12200
10 WPS-1706-2004
same within the definition of industry as provided in Industrial Disputes Act.
The petitioner merely alleges that the petitioner’s society is operating
amongst its members and its functioning on a non-profit basis, which does
not immune the same from the applicability of the Labour Welfare
Legislation. Undisputedly, in furtherance of the activity of the society, which
has the colour of trade/business activity, as observed in paragraphs 140 and
141 by the Apex Court in the case of Bangalore Water Supply (supra), the
same cannot claim any immunity from the applicability of the Industrial
Disputes Act.
15. The petitioner has placed strong reliance on the decision of the
M/s. Arihant Siddhi (supra) by the High Court of Bombay. The High Court
of Bombay concluded in paragraphs 4 and 5 as under:-
“4. This Court, in its judgment in the case of M/s. Shantivan II
Co. Op. Hsg. Society vs. Smt. Manjula Govind Mahida1 has
considered whether a cooperative housing society can be termed
as an industry within the meaning of Section 2(j) of the Industrial
Disputes Act merely because it carries on some commercial
activity, not as its predominant activity, but as an adjunct to its
main activity. This Court has held that such society is not an
industry. In a case like this, that is to say, where there is a complex
of activities, some of which may qualify the undertaking as an
industry and some would not, what one has to consider is the
predominant nature of services or activities. If the predominant
nature is to render services to its own members and the other
activities are merely an adjunct, by the true test laid down in the
case of Bangalore Water Supply and Sewerage Board vs. A.
Rajappa2, the undertaking is not an industry.
5. The Labour Court appears to have been swayed by the fact that
a few members of the society were carrying on business such as
coaching classes and dispensary and the society was charging
advertisement charges for the neon signs put up by the members.
The Court was of the view that the society was thereby earning
income and, in the premises, could not be termed as a mereSignature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:1220011 WPS-1706-2004
housing society. The Court also observed that in the premises the
services rendered by Respondent No.1 to the society and its
members could not be termed as personal services. The Court
observed that the judgment of Som Vihar Apartment Owners’
Housing Maintenance Society‘s case accordingly had no
application to the facts of the present case. There is a fundamental
fallacy in this reasoning. As held by the Supreme Court in
Bangalore Water Supply case when there are multiple activities
carried on by an establishment, what is to be considered is the
dominant function. In the present case, merely because the society
charged some extra charges from a few of its members for display
of neon signs, the society cannot be treated as an industry carrying
on business of hiring out of neon signs or allowing display of
advertisements. In the premises, the impugned award of the
Labour Court suffers from a serious error of jurisdiction.”
16. The Bombay High Court in the case of M/s. Arihant Siddhi (supra)
considered another decision of the High Court of Bombay in the case of M/s.
Shantivan-II Cooperative Housing Society vs. Smt. Manjula Govind Mahida
in W.P. No.360/2007 decided on 21.06.2018 and concluded that a co-
operative housing society cannot be termed as an industry within the
meaning of Section 2(j) of the Industrial Disputes Act. Merely because it
carries some commercial activity, not as its predominant activity, but as an
adjunct to its main activity. The Bombay High Court then observed that the
predominant nature of society being to render services to its members, the
other commercial activities being merely an adjunct, the society was not an
undertaking which was falling with the definition of the industry.
17. The Bombay High Court referred to the previous decision of the
Bombay High Court in the case o f M/s. Shantivan (supra) and the said
decision was also referred by the High Court of Allahabad in the case of
Arun Vihar Residents Welfare Association vs. State of U.P. and Others
reported in 2019 SCC OnLine ALL 5908.
Signature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:12200
12 WPS-1706-2004
18. The decisions in Som Vihar Apartment (supra), M/s. Shantivan
(supra), Arihant Siddhi (supra) and Arun Vihar (supra) were the cases where
the employer was a society which was formed among the residents of
apartments or the flat owners. In the aforesaid cases, no construction activity
pertaining to alienation of the immovable property was being carried out by
the society. The Bombay High Court, in its decisions, while considering the
predominant nature, placed reliance on the decision of the Apex Court in
Som Vihar Apartment (Supra), and proceeded to conclude that the housing
society was not an industry for the purposes of the Industrial Disputes Act.
19. The decisions as rendered by the Bombay High Court in the case
of M/s. Shantivan (supra) and Arihant Siddhi (supra) are clearly
distinguishable on the very ground that the same applies to a society which is
formed among the members of apartment owners or residents for better
functioning of their society, which is not the case in the present matter. So
far as the present matter is concerned, the issue in this regard is no more res
integra in view of the law laid down by the Apex Court in the case
o f Bangalore Water Supply (supra), where the Apex Court has taken into
consideration the satisfaction of the triple test theory as already discussed
hereinabove had very clearly concluded that if an entity is providing any
service though on a non-profit basis or charitable basis can be termed as
industry if such services are capable of entering the world of res
commercium. After the decision of the Apex Court in the case of Bangalore
Water Supply (supra), the petitioner’s society herein could not have claimed
any exemption from the applicability of the Industrial Disputes Act merely
Signature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41
NEUTRAL CITATION NO. 2026:MPHC-JBP:12200
13 WPS-1706-2004
under the garb of the assertion that the same is a society formed to satisfy the
housing needs of its members and works on a non-profit, no-loss basis.
20. In view of the aforesaid, this Court is of the considered view that
the Labour Court did not commit any error while passing the impugned
award dated 04.07.2003 contained in Annexure P/4 and the said award does
not require any interference in view of the decision of the Apex Court in the
case of Bangalore Water Supply (supra) .
21. Accordingly, the petition is hereby dismissed.
(MANINDER S. BHATTI)
JUDGE
sp
Signature Not Verified
Signed by: SAVITRI PATEL
Signing time: 09-03-2026
11:42:41