Management of Safdarjung Hospital v Kuldip Singh Sethi

Facts

• Kuldip Singh Sethi, an employee of Safdarjung Hospital, raised an industrial dispute regarding terms of his employment, which required determining whether the hospital, a charitable medical institution, was an "industry" for the purposes of invoking the machinery of the Industrial Disputes Act
• The hospital contended that its philanthropic, non-commercial character took it outside the scope of "industry" as statutorily defined

Issue

1. Whether a charitable hospital, carrying on medical activities without a profit motive, constitutes an "industry" within the meaning of Section 2(j) of the Industrial Disputes Act.

Held

• The Supreme Court held that for an activity to constitute an "industry," it must involve systematic activity analogous to trade or business, carried on through the cooperation of employer and employees, for the production or distribution of goods or services calculated to satisfy human wants
• A charitable or philanthropic institution, such as a hospital run without a profit motive and primarily for humanitarian purposes, does not fall within this definition, since its character is fundamentally different from a trade or business undertaking
• The Court accordingly held that Safdarjung Hospital was not an "industry" under Section 2(j), and the machinery of the Industrial Disputes Act was not attracted

Ratio Decidendi

An activity carried on without any profit motive, of a purely charitable, philanthropic, or humanitarian character such as a charitable hospital, does not amount to an "industry" under Section 2(j) of the Industrial Disputes Act, since it lacks the trade or business analogy central to the statutory definition. (Subsequently substantially reconsidered by Bangalore Water Supply v Rajappa, 1978.)