Case Study: Rangaswami and Another v. Registrar of Trade Unions and Another

By Saumya Dhyani 10 Minutes Read

Citation: AIR 1962 Mad 231, 1960 Indlaw MAD 4

Date of Judgement: 4^th November, 1960

Bench: Ramachandra Iyer (J)

Facts:

• A number of persons were employed at Raj Bhavan Guindy and Ootacamund.
• There were two categories of employers:

1. Those whose services were of domestic nature, pensionable and governed by certain rules framed by the Governor of Madras.

2. Those who consist of maistries and gardeners. Their services were not pensionable but were entitled to gratuity at certain rates.

• Both the categories were appointed and under the control of the Comptroller.
• On 9 February, 1959, seven of the employees applied to the Registrar of Trade Unions, Madras for registration of their union as a trade union under the Trade Unions Act of 1926, claiming that their services could not be held to be purely domestic services, so their union was entitled to the benefits of registration under the Trade Unions Act. However, they did not claim that employees were engaged in either trade or industry.
• Petitioner submitted that the term “industry” which is defined to include an undertaking would be comprehensive enough to cover the case of employees engaged in services at the Raj Bhavan who systematically do material service for the benefit of not merely the members of the Governor’s household but also to visitors and guests as well. Therefore, the employees should be held to be employed in an undertaking by the employer within the meaning of that term.
• It was further contended that as the Comptroller directs the sale of unserviceable articles as well as surplus produce of the gardens in the Raj Bhavan, the activity of the employer should be held to partake the character of a trade or business as well.

Registrar’s Decision:

The Registrar held that for the registration of the union, members must be connected with a trade or industry or business of an employer, and since those condition not being fulfilled in the present case so the employees could not be held to be workmen within the meaning of the Act to entitle them to the registration.

Issues:

• Whether Industrial Disputes Act and the Trade Unions Act could be read together as in pari materia, that is, as forming one system and interpreting one in the light of another?
• Whether mere personnel service would be an undertaking within the meaning of the Industrial Disputes Act, 1947?
• Whether the test of co-operation between the employer and employee for advancing the material needs of humanity had been satisfied in present case?
• Whether the sale of unserviceable materials and surplus garden produce will amount to a trade or business activity?

Reasoning:

• Whether Industrial Disputes Act and the Trade Unions Act could be read together as in pari materia, that is, as forming one system and interpreting one in the light of another?

No

The object behind the Industrial Disputes Act is to secure industrial peace and speedy remedy for labour discontent or unrest. A comprehensive meaning of the term “industry” was evidently thought necessary by the legislature in regard to that Act. But the same thing cannot be said to the Trade Unions Act. The history and object of that enactment show that it was intended purely to render lawful, organization of labour to enable collective bargaining. The provisions of the Act contemplate the admission of even outsiders or members and participation in political activities. That would itself dictate that the benefits conferred by the Act should be enjoyed by a clearly defined category of unions.

• Whether mere personnel service would be an undertaking within the meaning of the Industrial Disputes Act, 1947?

No

An undertaking in order to come within the definition would be an activity which involves the co-operation of the employer and the employees with the object of the satisfaction of material human needs, if organized or arranged in a manner in which trade or business is generally organized or arranged, and if it were not of a causal nature nor one for oneself or for pleasure. It is well known that in an industry, capital and organization, on the one hand, and labour, on the other, co-operate to achieve industrial production. Therefore, a mere personal service, however much it might have been organized, would not possibly be an undertaking within the meaning of the Act.[1]

There can thus be no industry where the employer is not engaged in common with the employees with the definite objective of the achievement of the material needs of humanity and that in an organized manner. In the definition of the term “trade union”, the regulation of relationship contemplated is in regard to the conditions of service of the employees which postulates the existence of an employer who is concerned in the business, trade or industry. So, it can be said that persons in control of the Raj Bhavan cannot be held to be an employer in an industry however widely that term may be understood.

• Whether the test of co-operation between the employer and employee for advancing the material needs of humanity had been satisfied in present case?

No

Following the Osmania University, Hyderabad v. Industrial Tribunal, Andhra Pradesh[2] in which it was held that dispute between the Osmania University and its employees could not be held to be an industrial dispute for there are neither co-operation of capital and labour nor were activities of the University strictly connected with the production and distribution of wealth.

In present case also, it cannot be said either that the employer is engages in any such activity and that he requires the services of the employees to be done for that purpose.

• Whether the sale of unserviceable materials and surplus garden produce will amount to a trade or business activity?

No

The court observed that that the mere fact that the employees serve the visitors and States guests of Raj Bhavan, nor the fact that unserviceable materials and surplus produce of the gardens of the Raj Bhavan are occasionally sold would show that there was co-operation between the employer and the employees for the purpose of a trade or business. The services rendered to the State guests are personal services to them and indirectly to the employer. The occasional sales of unserviceable articles and garden products are incidents of the ordinary administration of Government property. They are done in accordance with certain rules framed by the Government. They would not amount to a trade or business.

High Court’s Decision:

Court held that employees at Raj Bhavan are Government servants who could not form themselves into a trade union, it cannot be stated that the workers are employed in a trade or business carried on by the employer. The services rendered by them are purely of a personal nature. The union of such workers would not come within the scope of the Act so as to entitle it to registration thereunder. So, petition was dismissed.

[1] State of Bombay v. Hospital Mazdoor Sabha 1960 Indlaw SC 47.

[2] 1959 Indlaw AP 25.

Saumya Dhyani

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