A Defence of Triple Test | Why Nine-Judge Bench on ‘Industry’ definition should not interfere with Bangalore Water Supply case
The Supreme Court should refrain from interfering with the Bangalore Water Supply’s interpretative approach which, for five decades, has provided a coherent, accessible framework to define industries.
Saurabh Bhattacharjee
26 March 2026
RECENT HEARINGS by a nine-judge Constitution Bench of the Supreme Court on the definition of 'industry' under the Industrial Disputes Act, 1947 (‘ID Act’) mark a critical moment for India’s labour jurisprudence, which already is at a point of inflection with the notification of the four Labour Codes in November 2021.
The bench, which reserved judgment on March 19, 2026, is set to decide whether to uphold or overturn the 'Triple Test' established in the landmark Bangalore Water Supply and Sewerage Board v. R. Rajappa (‘BWSSB’) case of 1978. In BWSSB, the Supreme Court had held that every establishment which carries out a systematic and organised activity with the cooperation of employees for production or distribution of goods or services will be ‘industry’ even if there is no profit motive. The only exception that the Court recognised was the sovereign function exception.
The hearing by the nine-judge bench is the culmination of a battle spanning two decades. In 2005, a five-judge bench of the Supreme Court in State of Uttar Pradesh v. Jaibir Singh had held that Justice Krishna Iyer's majority opinion in BWSSB could not be treated as authoritative precedent and called for reconsideration by a larger bench.
Stakes are very high since the scope of the term, ‘industry’ is pivotal for application of industrial relations law, particularly the provisions on strikes, retrenchment and closure and access to labour adjudication.
Stakes are very high since the scope of the term, ‘industry’ is pivotal for application of industrial relations law, particularly the provisions on strikes, retrenchment and closure and access to labour adjudication. Furthermore, even though the nine-judge bench noted during the hearing that it is not concerned with the new labour codes, the continuity between the ratio of the BWSSB case and the definition of ‘industry’ in Section 2 (p) of the Industrial Relations Code, 2020 (‘IRC’) means that the observations of the bench are likely to shape the interpretation of the new Code also.
How BWSSB reflects the breadth of the statutory definition
Critics argue that Justice Krishna Iyer's Triple Test is too sweeping or that its application has gone overboard. These claims, however, fail to account for both the broad inclusive text of Section 2(j) and the longer pedigree of the ‘Triple Test’ itself.
Section 2(j) of the ID Act deliberately uses expansive terms like "undertaking," "manufacture," "calling," "service," "employment," and "avocation." Further, the use of the word "includes" in the second part of the definition signals an inclusive rather than exhaustive definition. It is also notable that Justice Iyer did not conjure the ‘Triple Test’ out of thin air. In D.N. Banerjee v. P.R. Mukherjee (1953), the Supreme Court recognized that the limited, traditional concept of industry must yield to an "enormously wider concept." Subsequently, in State of Bombay v. Hospital Mazdoor Sabha (1960), the Court explicitly adopted the functional approach, and notably, the ‘Triple Test’ itself, stating that "too much reliance cannot be placed on what are described as the essential attributes or features of trade or business as conventionally understood." Hospital Mazdoor Sabha also deemed the absence of a profit motive irrelevant. BWSSB simply reiterated this functional approach and clarified its scope.