What happened
A nine-judge Supreme Court Constitution Bench clarified how “industry” must be interpreted for disputes under the Industrial Relations Code (IRC), 2020. The Supreme Court held that the 1978 Bangalore Water Supply and Sewerage Board v. R. Rajappa approach does not automatically govern the meaning of “industry” under the IRC.
The Court directed that “industry” under the IRC must be interpreted using the IRC’s own text and statutory context (the way the Code is structured and related provisions fit together).
Background and earlier position: Rajappa (1978) under the 1947 law
In 1978, the Supreme Court in Bangalore Water Supply and Sewerage Board v. R. Rajappa interpreted “industry” under the Industrial Disputes Act, 1947 using a “triple test” (a three-part method to decide whether an activity counts as an industry).
The Rajappa interpretation expanded “industry” to cover many organised, systematic activities, including hospitals, educational institutions, and municipalities, so workers could seek legal remedies and collective bargaining under labour dispute mechanisms.