Bangalore Water Supply Test Continues, Nine-Judge Bench: Jai Bir Singh [2026 INSC 897]

In State of Uttar Pradesh v. Jai Bir Singh (2026 INSC 897), a nine-Judge Bench of the Supreme Court answered the long-pending reference on whether the "Triple Test" for "industry" laid down by Krishna Iyer, J. in Bangalore Water Supply & Sewerage Board v. A. Rajappa (1978) needed reconsideration. Surya Kant, CJI (for himself, Satish Chandra Sharma, Alok Aradhe and Vipul M. Pancholi, JJ.) held the reference maintainable and set out a "hypothetical" reformulation of the test, while clarifying that pending matters may be decided under Bangalore Water Supply (Surya Kant CJI, para 287). B.V. Nagarathna, J., Dipankar Datta, J. (for himself and Ujjal Bhuyan, J.) and Joymalya Bagchi, J. held that Bangalore Water Supply needs no reconsideration, and P.S. Narasimha, J. held that an authoritative determination has become unnecessary after the repeal of the ID Act (Nagarathna J, para 21; Datta J, paras 76–80; Bagchi J, para 125; Narasimha J, para 27).

Status: Reference answered through five separate opinions dated 20.08.2026; Bangalore Water Supply continues to govern disputes under the repealed Industrial Disputes Act, 1947; pending matters to be placed before an appropriate Bench (Surya Kant CJI, paras 287–289; Datta J, paras 78, 81).

Headnote: Definition of "Industry" Under Section 2(j) of the ID Act

Industrial Disputes Act, 1947 – Section 2(j) – Definition of "industry" – Triple Test in Bangalore Water Supply & Sewerage Board v. A. Rajappa – Dominant nature test – Sovereign functions exception – Welfare activities of Government departments – Larger Bench reference – Maintainability – Stare decisis – Industrial Disputes (Amendment) Act, 1982 (never notified) – Industrial Relations Code, 2020, Section 2(p) – Prospective operation.

Held: (i) Six of the nine Judges (Surya Kant CJI with three Judges, Narasimha J and Bagchi J) held that the reference was validly made and could be answered on merits; Nagarathna J and Datta J (with Bhuyan J) held it was unnecessary (Surya Kant CJI, paras 136–139, 287(i); Narasimha J, para 27(i)–(ii); Bagchi J, para 125(I); Nagarathna J, para 21(A); Datta J, para 76).

(ii) Surya Kant CJI (for four Judges) set out a reformulated Triple Test requiring a "discernible commercial character" analogous to trade or business, which raises a prima facie presumption of "industry", but described it as "no more than our considered opinion" and not displacing the law for pending cases (Surya Kant CJI, paras 247, 287(ii)–(iii)).

(iii) Nagarathna J, Datta J (with Bhuyan J) and Bagchi J held that the Triple Test in paras 140–144 of Bangalore Water Supply correctly interprets Section 2(j) and does not require reconsideration (Nagarathna J, para 21(C); Datta J, paras 77, 80; Bagchi J, paras 1, 125(II)).

(iv) Narasimha J held that an authoritative interpretation, though compelling when the reference was made, has become unnecessary after the repeal of Section 2(j), and that pending cases should be decided on the Bangalore Water Supply ratio (Narasimha J, paras 24–27).

(v) Every opinion records that disputes pending under the repealed ID Act are to be decided under Bangalore Water Supply and that the definition of "industry" in Section 2(p) of the Industrial Relations Code, 2020 must be interpreted on its own text, uninfluenced by this reference (Surya Kant CJI, paras 278–284, 287(iii)–(vi); Nagarathna J, para 21; Narasimha J, para 27(iv)–(v); Datta J, para 78; Bagchi J, para 125(VII)).

(vi) The Industrial Disputes (Amendment) Act, 1982 was never brought into force and has no bearing on the interpretation of Section 2(j) (Surya Kant CJI, paras 282–283; Nagarathna J, para 21; Datta J, para 77; Bagchi J, para 125(V)).

(paras 136–139, 247, 277–289 of the opinion of Surya Kant CJI; para 21 of Nagarathna J; paras 23–27 of Narasimha J; paras 73–81 of Datta J; paras 1, 125 of Bagchi J)

Case Details: State of U.P. v. Jai Bir Singh (2026 INSC 897)

Final Outcome: Reference answered by five separate opinions; no reformulation of Bangalore Water Supply commands a majority; pending disputes under the repealed ID Act to be decided under Bangalore Water Supply; IR Code, 2020 left to independent interpretation; matters to be placed before an appropriate Bench.

Case: State of Uttar Pradesh v. Jai Bir Singh, with connected civil appeals and special leave petitions

Neutral Citation: 2026 INSC 897

Case No.: Civil Appeal No. 897 of 2002 with connected matters

Court: Supreme Court of India (Civil Appellate Jurisdiction) – Nine-Judge Bench – Reportable

Date of Decision: 20 August 2026

Bench: Surya Kant, CJI (author, for himself, Satish Chandra Sharma J, Alok Aradhe J and Vipul M. Pancholi J); B.V. Nagarathna J (separate opinion); P.S. Narasimha J (separate opinion); Dipankar Datta J (author, for himself and Ujjal Bhuyan J); Joymalya Bagchi J (separate opinion)

Relevant Acts & Sections: Industrial Disputes Act, 1947 – Section 2(j); Industrial Disputes (Amendment) Act, 1982; Industrial Relations Code, 2020 – Section 2(p); General Clauses Act, 1897 – Section 6

Reference: Five-Judge Bench reference in State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1, followed by the seven-Judge Bench order dated 02.01.2017; questions framed by order dated 16.02.2026 (Surya Kant CJI, paras 82, 87; Bagchi J, para 51)

Counsel: Mr. R. Venkataramani, Attorney General for India, for the Union of India; Mr. Jamshed P. Cama and Mr. Parthasarathi Sengupta, Senior Advocates, as Amici Curiae (Surya Kant CJI, paras 142, 144; Datta J, paras 23, 82)

Source: Supreme Court of India (official website)

Key Holdings of the Supreme Court

• The reference was validly made and could be answered on merits – view of six Judges (Surya Kant CJI, para 287(i); Narasimha J, para 27(i)–(ii); Bagchi J, para 125(I)).
• Nagarathna J held the reference "misconceived" and Datta J (with Bhuyan J) held it "not necessary", while still recording that Bangalore Water Supply needs no reconsideration (Nagarathna J, para 21(A); Datta J, paras 76, 80).
• Surya Kant CJI (for four Judges) proposed that "industry" be tested by a systematic activity, organised through employer-employee cooperation, producing goods or services with a discernible commercial character analogous to trade or business, raising a prima facie presumption (para 287(ii)).
• That reformulation was expressly confined to an opinion, operating prospectively without reopening concluded or pending proceedings (Surya Kant CJI, paras 278, 287(iii)–(iv)).
• Four Judges (Nagarathna J, Datta J, Bhuyan J and Bagchi J) held that Krishna Iyer J's Triple Test correctly defines "industry" (Nagarathna J, para 21(C); Datta J, para 77; Bagchi J, para 125(II)).
• Welfare activities of Government departments are not outside Section 2(j) merely because the State carries them on; the sovereign functions exception is narrow (Nagarathna J, para 21; Bagchi J, para 125(III); Surya Kant CJI, para 287(ii), clause IV(b) of the reformulation).
• The IR Code, 2020 must be interpreted on its own text, and Bangalore Water Supply is not its "sheet anchor" (Surya Kant CJI, paras 280–281, 287(vi); Narasimha J, para 27(v); Bagchi J, para 125(VII)).

Brief Facts of the Case

The lead appeal raised the question whether the Social Forestry Department of the State of Uttar Pradesh, created as a welfare-oriented environmental initiative, is an "industry" under Section 2(j) of the ID Act (Surya Kant CJI, para 1).

In 1978, a seven-Judge Bench in Bangalore Water Supply laid down the Triple Test through the leading opinion of Krishna Iyer J (for himself, Bhagwati J and Desai J), with concurring opinions of Beg CJ and Chandrachud J and a partly dissenting opinion of Jaswant Singh J (for himself and Tulzapurkar J) (Surya Kant CJI, paras 16–19).

A five-Judge Bench in State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1, doubted that ratio and referred it to a larger Bench, and the matter was later placed before a Bench of nine Judges (Surya Kant CJI, paras 87, 106; Nagarathna J, para 1.2).

In the meantime, the IR Code, 2020 came into force on 21.11.2025 and the ID Act was formally repealed on 02.02.2026. By order dated 16.02.2026, the Court framed the questions for the nine-Judge Bench (Surya Kant CJI, paras 81–82).

Issues Before the Supreme Court

• Whether the test in paras 140–144 of Krishna Iyer J's opinion in Bangalore Water Supply lays down correct law, and whether the Industrial Disputes (Amendment) Act, 1982 and the IR Code, 2020 affect the interpretation of "industry" (Bagchi J, para 51).
• Whether social welfare activities and schemes of Government departments or their instrumentalities are "industrial activities" under Section 2(j) (Bagchi J, para 51).
• Which State activities are "sovereign functions" outside Section 2(j) (Bagchi J, para 51).
• Any other issue arising before the nine-Judge Bench, including the maintainability of the reference (Bagchi J, para 51; Surya Kant CJI, para 88).

Court's Findings and Reasoning

Maintainability of the reference: Surya Kant CJI tested the reference against Central Board of Dawoodi Bohra Community and held that it was neither barred by res judicata nor by stare decisis; a reference that had travelled through several Benches should not end on technical objections (paras 136–139). Narasimha J and Bagchi J agreed that the reference was valid (Narasimha J, para 27(i); Bagchi J, paras 1, 125(I)). Nagarathna J held that the perceived conflict between Jagannath Kondhare and Pratamsingh Parmar did not justify a reference (para 21(A)), and Datta J (with Bhuyan J) held that it "serves no practical, jurisprudential or doctrinal purpose" (para 76).

Reformulation proposed by Surya Kant CJI: After examining noscitur a sociis, the text of Section 2(j) and the treatment of institutions such as professions, clubs, educational and research bodies, the four-Judge opinion identified "limited aspects" that "might have served the law better" and reformulated the Triple Test with a commercial-character requirement, a prima facie presumption, the dominant nature test, and a sovereign functions exemption that does not cover welfare activities (paras 246–247, 255, 287(ii)).

Effect of the reformulation: The same opinion held that the reformulation is only its considered opinion, will not reopen concluded matters or disturb pending ones, and that pending matters may be adjudicated under Bangalore Water Supply (paras 277–278, 287(iii)–(iv)).

Bangalore Water Supply upheld – Nagarathna J: The ID Act stands repealed, the IR Code has a new definition, the ratio has held the field for 48 years, Parliament never notified the 1982 Amendment, and reconsideration would send pending disputes back to their original fora; the majority in Bangalore Water Supply is good law and binding (para 21(B)–(C)).

Bangalore Water Supply upheld – Datta J (with Bhuyan J): What Krishna Iyer J described as transient has, through four decades of executive inertia, become settled law, and nothing justifies disturbing it; the reference is rejected and Bangalore Water Supply requires no reconsideration (paras 74–76, 80).

Bangalore Water Supply upheld – Bagchi J: The Triple Test extends the beneficial object of the Act to organised, systematic activities akin to trade, while excluding casual and non-systematic activities such as domestic service and individual professionals. Sovereignty is confined to core inalienable duties, and charities, temples and educational institutions are judged by the employer-employee relationship, not their object (para 125(II)–(IV)).

No third set of principles – Narasimha J: Modifying the ratio only for pending cases would create a third category of law, and a narrower reading would push long-pending disputes out of the ID Act into civil courts (paras 25–26).

Final Outcome and Directions

• The reference stands answered through five separate opinions; the PDF contains no separate common order of the Bench.
• Pending references and disputes under the repealed ID Act are to be decided under the law laid down in Bangalore Water Supply (Surya Kant CJI, para 287(iii); Narasimha J, para 27(iv); Datta J, para 78; Bagchi J, para 125(VII)).
• Concluded judgments, awards and settlements remain undisturbed (Surya Kant CJI, para 287(iv)).
• No opinion is expressed on the IR Code, 2020 or the 1982 Amendment, and nothing affects any challenge to the IR Code (Surya Kant CJI, paras 279–284; Datta J, para 79).
• Pending matters to be placed before an appropriate Bench on orders of the Chief Justice; no order as to costs (Datta J, para 81; Surya Kant CJI, paras 289–290).

Legal Principle Laid Down

The Triple Test of Bangalore Water Supply continues to govern whether an establishment is an "industry" under Section 2(j) of the repealed Industrial Disputes Act, 1947 for pending and legacy disputes. A refined test with a commercial-character element was proposed by four Judges only as an opinion. The definition of "industry" in Section 2(p) of the Industrial Relations Code, 2020 is to be interpreted afresh on its own text and context.

Precedents Relied Upon

• Bangalore Water Supply & Sewerage Board v. A. Rajappa, (1978) 2 SCC 213 – Considered; Triple Test examined in all five opinions.
• State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1 – Five-Judge Bench order of reference; examined (Nagarathna J, para 1.2; Datta J, para 76).
• Central Board of Dawoodi Bohra Community v. State of Maharashtra, (2005) 2 SCC 673 – Applied to test the reference (Surya Kant CJI, paras 89–95; Bagchi J, para 125(I)).
• Management of Safdarjung Hospital, New Delhi v. Kuldip Singh Sethi, (1970) 1 SCC 735 – Discussed as overruled in Bangalore Water Supply.
• D.N. Banerji v. P.R. Mukherjee, AIR 1953 SC 58; Corporation of the City of Nagpur v. Employees, AIR 1960 SC 675; State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610 – Discussed as part of the pre-1978 jurisprudence.

Important Paragraphs of the Judgment

Verbatim extracts from the judgment. For the full text, refer to the judgment PDF below.

Para 287 (Surya Kant CJI): "the reformulated Triple Test articulated in this judgment is to be understood as no more than our considered opinion on the proper interpretation of Section 2(j) of the Industrial Disputes Act, 1947."

Para 277 (Surya Kant CJI): "Judicial correction must be tempered by judicial restraint, particularly where settled rights and obligations have crystallised over time."

Para 21 (Nagarathna J): "I hold that the majority judgments of the seven-Judge Bench is good law and therefore, binding."

Para 27 (Narasimha J): "It is prudent to dispose of the pending cases on the basis of the ratio laid down in Bangalore Water Supply (supra) without attempting to create a third set of principles applicable only to pending cases."

Para 76 (Datta J): "institutional credibility lies in respecting finality, not in perpetuating doubt"

Para 125 (Bagchi J): "Mere vesting of a duty in the State by statute or by the Constitution, even a duty undertaken to fulfil the lofty mandate of Part IV, does not clothe it with sovereign immunity from industrial law."

Practical Impact of the Ruling

• For Labour Courts and Industrial Tribunals: Pending references under the ID Act continue to be decided by the Bangalore Water Supply Triple Test, so hospitals, educational institutions, clubs, charities and welfare departments are assessed as before.
• For Government departments: A plea of "sovereign function" will not shield welfare schemes and statutory activities run through employer-employee relationships.
• For employers and workmen under the IR Code: Disputes under Section 2(p) of the IR Code, 2020 will be argued afresh, as the Court has deliberately kept this reference from shaping that definition.
• For lawyers citing this case: The reformulated test of Surya Kant CJI is a four-Judge opinion, not a majority ratio; careful reading of all five opinions is needed before relying on any single view.

FAQs on the Definition of "Industry" Under Section 2(j)

1. Did the nine-Judge Bench overrule Bangalore Water Supply?

No. Four Judges held it correct, one found a fresh ruling unnecessary, and the four-Judge opinion of Surya Kant CJI offered a reformulation only as its considered opinion while allowing pending matters to be decided under Bangalore Water Supply (Nagarathna J, para 21; Datta J, para 80; Bagchi J, para 125; Narasimha J, para 27; Surya Kant CJI, para 287).

2. What change did Surya Kant CJI propose to the Triple Test?

The activity should involve goods or services with a discernible commercial character analogous to trade or business; if the elements are met, a prima facie presumption of "industry" arises (para 287(ii)).

3. Which law applies to pending industrial disputes?

Disputes pending under the repealed ID Act are to be decided under the law laid down in Bangalore Water Supply (Surya Kant CJI, para 287(iii); Datta J, para 78; Narasimha J, para 27(iv)).

4. Does this judgment govern the Industrial Relations Code, 2020?

No. The definition of "industry" in Section 2(p) of the IR Code must be interpreted on its own text, and Bangalore Water Supply is not its sheet anchor (Surya Kant CJI, paras 280–281; Narasimha J, para 27(v)).

5. Are Government welfare schemes outside "industry"?

Not merely because the State runs them. Bagchi J held that only core inalienable sovereign duties are exempt, and Nagarathna J held that the nature of the activity, not who carries it out, decides the question (Bagchi J, para 125(III); Nagarathna J, para 21).

Keywords: 2026 INSC 897, State of U.P. v. Jai Bir Singh, nine-Judge Bench, definition of industry, Section 2(j) Industrial Disputes Act, Bangalore Water Supply triple test, sovereign functions exception, welfare activities, Industrial Relations Code 2020 Section 2(p), larger bench reference, stare decisis, Justice Surya Kant, Justice B.V. Nagarathna, Justice Dipankar Datta, Justice Joymalya Bagchi, labour law

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Download Judgment PDF – State of U.P. v. Jai Bir Singh

Judgment PDF: 2026 INSC 897 – State of Uttar Pradesh v. Jai Bir Singh (Civil Appeal No. 897 of 2002 with connected matters) – Download Judgment PDF

Source: Supreme Court of India (official website).