State of Bombay & ors. vs. The Hospital Mazdoor Sabha

State of Bombay & ors. vs. The Hospital Mazdoor Sabha
In the Supreme Court of India
AIR 1960 SC 610
State Of Bombay and Ors.
The Hospital Mazdoor Sabha
Date of Judgement
29th January, 1960
P.B. Gajendragadkar, J; K. Subbarao, J; KC Das Gupta, J


The disputes between the workers and the management of the industry are happening for a long time. The disputes can be over various things such as wages, dismissal of employees without proper compensation, etc. Industrial Disputes Act, 1947, was enacted to solve such disputes and tribunals were established to resolve those disputes by judicial minds. It is important that only industrial disputes can be referred to such tribunals, which means the Act only applies to industries. Now the problem arises as to what constitutes industry and what not. In the present case also i.e. State of Bombay & others v. The Hospital Mazdoor Sabha,[i] there was a question of interpretation whether Government Hospitals form part of the industry and can such disputes be referred to tribunal Under Section 10 of Industrial Disputes Act, 1947.


The definition of Industry under Section 2(j) of the Act is very wide and extensive. It covers various governmental functions also but it does not cover the primary functions i.e. sovereign functions of the government since these functions are for the socio-economic progress of the State.[ii] In Baroda Borough Municipality v. Its Workmen,[iii] even a municipality was held to be an industry under this Act. Further, an amendment was made after the present case was referred to the industrial tribunal which added Defence, Hospital & Dispensary and fire brigade services within the ambit of the industry under this Act.

Statutory Provisions Discussed:

Section 2(j), 25F(b), 251 of Industrial Disputes Act, 1947.

Facts of the case:

Factual Matrix-

The group of Hospitals consists of five Hospitals. First being established in the year 1845. Most of the expenses were met by the Appellant. The group is under the administrative control of the Surgeon- General of the Appellant and its daily affairs are controlled by the Superintendent who is an employee of the Appellant and their salaries are paid entirely by the Appellant. This group serves as a clinical training ground for students of a Government Medical College run of the Appellant. The group is thus run and managed by the appellant to provide medical relief and to promote the health of the people of Bombay.

Procedural History-

The Hospital administration dismissed 2 of its employees by notice and in their place, two servants who were discharged from the Civil Supplies Department were appointed. The employees filed a writ petition before Bombay High Court which held that the retrenchment orders were not void. The matter was then taken to Court of Appeal which held that the orders do not comply with Section 25F of the Act and hence they are invalid. The Court also held that the Industrial Disputes Act applies to Hospitals and issued a writ of mandamus. Thus, the Appellants have approached the Supreme Court to get the Judgment of the Court of Appeal Set-aside.


a. Whether the Provisions of the Industries Dispute Act, 1947 applies to Hospital meaning thereby does Hospitals come under the meaning of Industry under this Act?

b. Whether the retrenchment order of two employees is invalid due to non-compliance of Section 25F of the Act?

Arguments Advanced:

Arguments by the Appellant-

The Appellants contended that provisions of the Act do not apply to them since they are not industry within the Act. They also contended that the Appellate Court was wrong in holding them liable for a contravention of Section 25F of the Act. They also claimed that while construing the words in Section 2(j) of the Act, the doctrine of noscuntur a sociis which means that, when two or more words which are susceptible to analogous meaning are coupled together they are understood to be used in their cognate sense. It means that the words which are close to each other should be interpreted in a general to the less general one. It is also contended by the Appellant that an undertaking should be analogous to trade or business. The Appellant also contends that the person who is carrying on such activity must receive some consideration in return i.e. quid pro quo.

Arguments by the Respondents-

The respondents contended that they had not been paid at the time of retrenchment compensation as prescribed by Section 25F(b). The respondents contend that the failure to comply with the said requirement makes the order of retrenchment invalid.


Ratio Decidendi:

The Judgment of the Court was delivered by Justice Gajendragadkar. The Court considered various arguments and facts of the case. The Court held that Section 2(j) does not define “industry ” in the usual manner because the second clause deliberately refers to several other items of industry and brings them in the definition in an inclusive way. The words used in an inclusive definition denote a wide meaning and it cannot be restricted. The Court also held that the Doctrine of noscuntur a sociiscannot be applied in the present case because the Object and Scope of the Act are very wide and the Categories mentioned in Section 2(m) of the Act makes the Doctrine inapplicable.

The Court also held that the absence of profit motive or absence of capital investment does not make any material difference. If a hospital is run by a private person without charging any fee it would still be an undertaking under Section 2(j). It doesn’t matter whether the hospital is run by a private person or government. The addition of the hospital under Section 2(n)(vi) also shows the intention of the legislature which means that the hospital is an undertaking under the Act.

The Court relied upon Sri Vishuddhananda Saraswathi Marwari Hospital v. Their Workmen,[iv] in which the Labour Appellate Tribunal held that the definition of the industry in s. 2(j) was of wide amplitude and that there was no good reason for cutting down its natural meaning to limit its operation to profit-making enterprises only. The tribunal held that hospitals form part of the industry under this Act.

The Court upheld the judgment of the Court of Appeal and held that hospitals are an industry under this Act, meaning their provisions of the Act apply to them. The Court also confirmed the order of the High Court on the 2nd Issue and held the retrenchment of employees invalid and inoperative.

Obiter Dicta:

On a plain reading of Section 25F (b) of the Act, it is clear that the requirement prescribed by it is a condition precedent for the retrenchment of the workman. The section provides that no workman shall be retrenched until the condition in question has been satisfied. Section 251 of the Act provides for the recovery of monies due from employers under Chapter V. But Section 25F(b) is a mandatory provision and it cannot be ignored. Any retrenchment order which does not comply with Section 25F(b) of Act is invalid and inoperative.


As pointed out by the Supreme Court, the Word Industry under this Act has a very wide meaning and even government hospitals form part of it. The word ‘industry’ cannot be construed to its limited sense. The Court, in this case, made it clear that only Sovereign Government Functions are excluded from the ambit of ‘industry’ and not all the governmental functions.

“The views of the authors are personal


[i] State of Bombay &others v. The Hospital Mazdoor Sabha, AIR 1960 SC 610.

[ii] Coomber v. Justices of Berks, (1883) App. cas. 61.

[iii] Baroda Borough Municipality v. Its Workmen, AIR 1957 SC 110.

[iv] Sri Vishuddhananda Saraswathi Marwari Hospital v. Their Workmen, (1952) II LLJ 327.