Indian Army's Core Function of National Security Is a Sovereign Function, Cannot Be Categorized as 'Industry': Jammu and Kashmir High Court

In a landmark judgment, the High Court of Jammu and Kashmir and Ladakh addressed the classification of the Indian Army under the Industrial Disputes Act, 1947 (ID Act). The court ruled that the Indian Army's primary function of national security is a sovereign function and, therefore, it cannot be categorized as an 'industry' under the ID Act. This decision has significant implications for labor disputes involving the armed forces, particularly concerning the jurisdiction of labor courts.

Background of the Case

The case originated from a dispute involving individuals employed as porters by the Indian Army. These porters were engaged on a casual basis to assist in transporting supplies and equipment in challenging terrains. After their disengagement, the porters sought legal recourse, claiming that their termination was unjust and that they were entitled to reinstatement with back wages. The matter was initially brought before the Labor Court, which ruled in favor of the porters, directing their reinstatement with full back wages. The Indian Army challenged this decision, leading to the present appeal before the High Court.

Key Legal Issues Addressed

The High Court's deliberation focused on two pivotal legal issues:​

1. Whether the Indian Army qualifies as an 'industry' under the Industrial Disputes Act, 1947.
   
   

2. Whether the Labor Court possesses jurisdiction to adjudicate disputes involving the Indian Army.
   
   

Definition of 'Industry' Under the Industrial Disputes Act

The term 'industry' is defined in Section 2(j) of the Industrial Disputes Act, 1947, as:​

"any business, trade, undertaking, manufacture, or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen."​

This definition has been subject to extensive judicial interpretation to determine its applicability to various entities and functions.​

Supreme Court's Interpretation in Bangalore Water Supply Case

A seminal case in this context is Bangalore Water Supply & Sewerage Board v. A. Rajappa (1978), where the Supreme Court of India laid down a comprehensive test for determining whether an entity qualifies as an 'industry.' The court established the 'triple test,' which considers:​

1. Systematic Activity: The entity must engage in a systematic and organized activity.​
   
   

2. Cooperation Between Employer and Employee: There must be cooperation between the employer and employees to achieve the desired objective.​
   
   

3. Production or Distribution of Goods or Services: The activity should involve the production or distribution of goods or services calculated to satisfy human wants and needs.​
   
   

However, the Supreme Court also clarified that sovereign functions of the state, particularly those pertaining to law and order, defense, and related activities, are excluded from the ambit of 'industry.' This exclusion is based on the premise that such functions are primary and inalienable responsibilities of the state, not amenable to industrial adjudication.​

High Court's Analysis and Rationale

Applying the principles from the Bangalore Water Supply case, the Jammu and Kashmir High Court examined the nature of the Indian Army's functions:​

1. Sovereign Function of National Security: The court emphasized that the Indian Army's core mandate is to protect the nation's sovereignty and territorial integrity. Such activities are quintessential sovereign functions, integral to the state's existence and security. Engaging in combat, strategizing defense mechanisms, and ensuring national security are functions that cannot be classified as industrial activities.
   
   

2. Role of Porters in the Army: The porters were engaged to assist in logistical operations, such as transporting rations and ammunition in difficult terrains. The court noted that these activities, although non-combatant, are intrinsically linked to the Army's sovereign functions. The seamless execution of defense operations relies on such support roles, making them integral to sovereign activities rather than industrial operations.
   
   

3. Precedents on Sovereign Functions: The court referenced previous judgments where entities performing sovereign functions were excluded from the definition of 'industry.' For instance, in cases involving the police force and other defense-related organizations, courts have consistently held that such bodies do not fall within the purview of the Industrial Disputes Act due to their sovereign responsibilities.​
   
   

Jurisdiction of the Labor Court

Having established that the Indian Army does not qualify as an 'industry,' the court proceeded to examine the jurisdictional competence of the Labor Court in this context:​

1. Appropriate Government Authority: The Industrial Disputes Act delineates the 'appropriate government' responsible for matters concerning different entities. For central government undertakings, including the armed forces, the Central Government is the appropriate authority. Consequently, any industrial dispute involving such entities falls under the jurisdiction of tribunals constituted by the Central Government. In this case, the porters had approached the Jammu and Kashmir Labor Court, which operates under the aegis of the state government. The court observed that this was a procedural impropriety, as the state labor court lacked jurisdiction over matters pertaining to the Indian Army.
   
   

2. Lack of Jurisdiction: Given that the Indian Army is not an 'industry' and considering the appropriate government authority, the court concluded that the Labor Court did not possess the jurisdiction to adjudicate the dispute. The initial award favoring the porters was, therefore, rendered without legal authority and was subsequently set aside.
   
   

Observations on Employment Practices

While the court's decision was grounded in legal principles, it also offered observations on the employment practices concerning porters:​

1. Compassionate Approach: The court acknowledged the crucial role that port

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