The Court Praised a 1978 Judgment, Then Set It Aside Anyway

The Court Freed a New Law From an Old Precedent Without Overruling It Section

2(j) of the Industrial Disputes Act, 1947 never actually said hospitals, universities and municipal bodies counted as "industries." What said that was a 1978 judgment interpreting it - the "triple test" from Bangalore Water Supply and Sewerage Board v.

A. Rajappa. Section 2(p) of the new Industrial Relations Code, 2020 is a different provision, in a different statute, written forty-two years later. On Thursday, a nine-judge bench held that the second section does not automatically inherit the first section's case law.

That distinction - a statute's text versus the judicial gloss laid over it - is the entire ruling.

The Text Says One Thing, the Precedent Said Another The Bangalore Water

Supply triple test asked whether an activity was systematic, cooperative between employer and employee and aimed at producing goods or services for human wants. On that reading, almost anything organised qualified as an "industry," which is why the 1978 judgment pulled hospitals and colleges into labour law's protective net.

CJI Kant's majority did not say this reading was wrong - it explicitly called the triple test's "core principles" sound and even offered that its "elements could have been articulated differently." What the majority refused to do was let that 1978 interpretation of one statute silently become the "sheet anchor" for a different, newer statute's near-identical language.

In practice: Section 2(p) of the IRC gets interpreted on its own text and context, from scratch - not inherited case law.

Where the Firewall Sits

The ruling's most consequential line is the one protecting the past. Every dispute already pending under the 1947 Act - and there are thousands, involving hospital staff, teachers and municipal workers - will still be decided using the 1978 triple test.

Only prospective classification under the new Code starts on a clean slate. This is Justice P.S. Narasimha's point made explicit: an authoritative reinterpretation of Section 2(j) had "lost its immediacy" once the IRC took over going forward, so there was no need to disturb settled expectations for cases already in the pipeline.

Justice Nagarathna's dissent argues the opposite risk matters more - that any signal of narrowing, even a technical one, "casts a shadow" over interpretation going forward, in an economy where more workers than ever sit in privatised, ambiguous employment relationships.

The exam-relevant insight is this: courts routinely distinguish precedent from the statute it interpreted, but doing so for a term as consequential as "industry"

• which decides who gets access to labour tribunals at all - turns an interpretive technicality into a live redistribution of legal protection, decided nine judges to zero on the principle, five to four on how far it should reach.