The nine-judge Bench on 'industry': what is at stake in the reconsideration of Bangalore Water Supply

The reference has a long lineage. In 1978, a seven-judge Bench of the Supreme Court in Bangalore Water Supply and Sewerage Board v. R. Rajappa, (1978) 2 SCC 213, gave the term "industry" in Section 2(j) of the Industrial Disputes Act, 1947, an expansive interpretation. Justice V.R. Krishna Iyer, writing for the majority, laid down a three-part test that turned on systematic activity, cooperation between employer and employee, and the production of goods or services for the satisfaction of human wants. The reach was deliberately wide: it brought charitable institutions, professional services, government departments, hospitals, universities and clubs into the scope of "industry," exposing them to the Act's adjudicatory framework and to the body of rights — retrenchment compensation, dispute resolution, conditions of employment — that it brings.

Almost from the moment the judgment was delivered, the Bench's reach attracted criticism — from the bar, from administrative law commentators, and from successive Law Commission reports. State of U.P. v. Jai Bir Singh (2005) referred the question for reconsideration to a larger bench. The reference, technically pending since then, was activated by the present Chief Justice in February 2026; the nine-judge Bench was constituted; arguments were heard on 17, 18 and 19 March 2026; and judgment was reserved on the third day.

This is, accordingly, a preview piece — not a digest. The judgment is yet to be pronounced. But the contours of the reference are public, the constitutional arguments on either side have been advanced, and the practitioner needs to be ready for any of the possible outcomes.

The Bench

The composition of the nine-judge Bench is itself doctrinally significant. The Chief Justice has constituted a bench drawn from across the seniority profile and across the analytical traditions of the present Court:

• Chief Justice Surya Kant (presiding)
• B.V. Nagarathna, J.
• P.S. Narasimha, J.
• Dipankar Datta, J.
• Ujjal Bhuyan, J.
• S.C. Sharma, J.
• Joymalya Bagchi, J.
• Alok Aradhe, J.
• Vipul M. Pancholi, J.

Reading the composition in light of the appointments to the present Court, the Bench includes judges with both labour-law and constitutional-law backgrounds, and is unusually well-suited to a reconsideration that has elements of both. The bar's expectation, in such cases, is for a judgment that engages with the constitutional reading of "industry" rather than the technical reading alone.

The Bangalore Water Supply test, restated

To frame the reference correctly, the test under reconsideration must be stated precisely. Justice Krishna Iyer's opinion identified three principal elements:

1. Systematic activity — the activity in question must be systematic, organised and conducted with cooperation between employer and employee;

2. Cooperation for production — the cooperation must be aimed at producing or distributing goods or services calculated to satisfy human wants and wishes; and

3. Absence of irrelevant motive — the absence of profit motive does not take the activity out of "industry"; the analysis is functional, not pecuniary.

To these the opinion attached a "dominant nature" qualification: where an enterprise undertakes multiple activities, the dominant activity determines whether the enterprise as a whole is "industry."

The consequence of the test, applied across the spectrum of public and quasi-public institutions, was the expansion of "industry" to encompass municipal water-supply boards, universities, hospitals, religious and charitable trusts, the Sovereign Functions exception aside. The carve-out for sovereign functions narrowed over time, with the Court reading it strictly.

The questions before the nine-judge Bench

The reference order in Jai Bir Singh identified, broadly, three questions for reconsideration. As argued before the present Bench, they may be summarised as:

Whether the Bangalore Water Supply test is consistent with the legislative scheme of the Industrial Disputes Act. The Industrial Disputes Act, 1947, was a colonial-era statute aimed at industrial disputes in industrial undertakings. The argument has been that Bangalore Water Supply's expansive reading goes beyond what the Act's structure can bear, applying its provisions to entities that were never within its intended scope.

Whether the test produces unworkable consequences in modern enterprise structures. Professional services firms, technology platforms, gig-economy structures, hybrid public-private partnerships, and the increasing fluidity of cooperative arrangements have made the "systematic activity / cooperation" test difficult to apply with predictability. The argument is that the test's flexibility, intended as a strength in 1978, has become a source of doctrinal instability.

Whether the constitutional treatment of sovereign functions should be revisited. The narrow reading given to "sovereign functions" by Bangalore Water Supply and its progeny has subjected very large parts of governmental activity to industrial dispute machinery — including activities that the Centre and States argue are core to constitutional functions. Whether this is consistent with constitutional federalism and with the separation between governmental and industrial activity is a strand of the reference.

The Centre's position

The Attorney General R. Venkataramani, with Additional Solicitor General K.M. Nataraj, appeared for the Union and pressed for reconsideration. The Centre's principal submissions, as publicly reported, were:

• An expansive definition of "industry" produces a chilling effect on private investment in services and employment-intensive sectors, particularly in professional services, education and healthcare, where the Industrial Disputes Act's procedural protections substantially raise the cost of exit.
• The test as articulated in Bangalore Water Supply requires the State to treat a large range of governmental functions as industrial activity, undermining the State's ability to discharge constitutional and welfare functions.
• The modern enterprise context — gig work, platform-mediated services, mixed activity — has overtaken the doctrinal architecture of the 1978 reading, and a narrower, more determinate test is required.

The Centre's argument is, in essence, that the test was bold for its time but has not aged well, and that the present Court should restore a more disciplined statutory reading.

The opposition

Senior advocates Shekhar Naphade, Indira Jaising, C.U. Singh, and Sanjay Hegde appeared on the opposite side, defending the Bangalore Water Supply reading. The principal submissions, as publicly reported:

• The doctrinal architecture of Bangalore Water Supply is the foundation of fifty years of protective labour jurisprudence in India. Disturbing it would invalidate the institutional reliance of millions of workers across the spectrum of activities the doctrine covers.
• The test, properly applied, has produced workable doctrine. The bar's experience with applying it across diverse enterprise structures has been one of incremental adaptation, not breakdown.
• The constitutional reading of welfare functions and labour protection demands a wide reading of "industry"; narrowing the term would significantly weaken the constitutional commitment to industrial democracy and worker welfare.

What an answer either way would mean

The nine-judge Bench can do one of three things:

Affirm Bangalore Water Supply. If the Bench reaffirms the 1978 test, the existing body of doctrine remains intact. There will be incremental refinements — the Bench may speak to specific problem areas such as gig work or hybrid structures — but the constitutional architecture of "industry" stays as it has been.

Modify the test. The Bench may retain the structure of the Bangalore Water Supply reading but narrow specific elements — for example, by reading "systematic activity" more strictly, by widening the sovereign-functions exception, or by carving out specific categories (professional services, charitable institutions, hospitals). A modification of this kind would require careful transitional rules to avoid disrupting settled industrial dispute proceedings.

Overrule it in significant part. The Bench may replace the Bangalore Water Supply test with a narrower test more directly anchored in the legislative text of the Industrial Disputes Act. This would be the most far-reaching outcome, exposing large categories of entities currently within the Act to a constitutional reassessment of their coverage. The transitional consequences for pending industrial disputes, awards under enforcement, and reinstatement orders would be substantial.

In none of these outcomes does the Court act in a doctrinal vacuum. The Bench is necessarily reading the reference against the backdrop of the four Labour Codes — the Industrial Relations Code, the Code on Wages, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code — which were intended to consolidate and modernise the central labour statutes. The interaction between the Bangalore Water Supply doctrine and the Labour Codes' definitions and coverage rules is itself a question the Bench will have considered.

Where there is systematic activity, organised by cooperation between employer and employee for the production and/or distribution of goods and services calculated to satisfy human wants and wishes, there is an industry.

What practitioners should do now

For the labour-side bar and for HR counsel, the right posture is to be ready for any of the three outcomes, with structured advice for each.

For employers currently within "industry" under Bangalore Water Supply. Inventory the operations affected, the workers covered, and the pending industrial proceedings. If the test is narrowed, transitional questions about pending matters and existing awards will arise; preparing the factual ground now will materially advantage the response.

For unions and worker representatives. Be prepared to make the constitutional reliance argument — that even on a narrower test, the workers' settled rights and reasonable expectations under existing awards and settlements deserve constitutional protection from retroactive removal.

For entities currently outside "industry." A narrowing of the test may bring new clarity but will not necessarily expand the carve-out beyond what Bangalore Water Supply already allowed. The institutional position should be reviewed against the test as it emerges.

When the judgment is likely

The Bench reserved judgment on 19 March 2026. Constitution Bench reserved-judgment timelines have varied considerably; for a nine-judge bench on a question of this complexity, a multi-month timeline is not uncommon. The 29 May 2026 directions of the Court on reserved judgments do not bind Supreme Court benches in the same way they bind the High Courts, but the doctrinal posture of the Court on the question of pronouncing reserved judgments — set out in the 29 May directions — will be a relevant frame.

When the judgment comes, expect a substantial doctrinal opinion across multiple separate opinions, with the Chief Justice's view leading the analysis.

The bottom line

The Bangalore Water Supply reconsideration is one of the largest constitutional questions on the Court's docket. The doctrinal architecture under reconsideration has shaped Indian labour law for nearly half a century; whatever the Bench decides will reshape it for the next several decades. The reference is reserved, the bar's submissions are complete, and the bench's composition is unusually well-suited to a structural answer. For practitioners with exposure to industrial dispute work — and that is a large bar — this is the most-watched pending judgment of 2026.

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This is a preview, not a digest. The judgment has not been pronounced. When it is, the doctrinal contribution will be analysed in a follow-on digest; this piece is meant to orient the practitioner to the reference as it stands.