Court’s Decision
The Bombay High Court, in a landmark ruling delivered by Justice Milind N. Jadhav, dismissed the writ petition filed by the Maharashtra Police Academy and upheld the Industrial Court’s decision directing reinstatement of a daily-wage computer operator whose services were terminated after eight years of continuous employment.
The Court held that the Academy falls within the definition of “industry” under Section 2(j) of the Industrial Disputes Act, 1947 (ID Act) and that the respondent employee, who had completed over 240 days of work each year, qualified as a “workman” under Section 2(s).
Rejecting the Academy’s claim that it performed sovereign functions exempt from labour law, the Court observed:
“The petitioner’s functions may be sovereign to the extent of training police officers, but the moment it charges fees from private security agencies and civilians, it performs economic activities that bring it within the definition of ‘industry’.”
Accordingly, the Court directed the Academy to reinstate the employee as a High-Grade Stenographer within two weeks, grant continuity of service with full back wages, and regularize her position with permanency benefits. The effect of the order, however, was stayed for six weeks to enable the Academy to appeal to the Supreme Court.
Facts
The Maharashtra Police Academy was established in 1906 as the Central Police Training School and later renamed in 1989. In 2010, the Academy appointed the respondent as a Computer Operator on a daily-wage basis without any formal recruitment process.
A Government Resolution (GR) dated 5 February 2016 granted limited autonomy to the Academy in matters of training, curriculum, and examination, and directed its registration under the Societies Registration Act, 1860 and Bombay Public Trusts Act, 1950. The Academy was accordingly registered and began operating semi-independently.
Despite working continuously for eight years, the respondent’s services were terminated on 11 January 2018, without any notice, retrenchment compensation, or publication of a seniority list. The Academy retained junior employees, prompting her to file a complaint before the Labour Court under Section 28 read with Items 1(a), (b), (d), (f), and (g) of the MRTU & PULP Act, 1971, alleging unfair labour practices and seeking reinstatement.
The Labour Court ruled in her favour, and after multiple rounds of litigation before the Industrial Court, the High Court was approached by the Academy challenging the final order dated 9 May 2025, which upheld her reinstatement.
Issues
- Whether the Maharashtra Police Academy qualifies as an “industry” under Section 2(j) of the Industrial Disputes Act, 1947.
- Whether the respondent qualifies as a “workman” under Section 2(s) of the Industrial Disputes Act.
- Whether the termination of a daily-wage employee without notice or compensation violates Section 25-F of the Industrial Disputes Act.
Petitioner’s Arguments
Counsel for the Academy argued that the institution was established under the Indian Police Act, 1861, and performed sovereign and statutory functions related to law enforcement training. Being fully controlled and funded by the State Government, it could not be classified as an “industry.”
He relied on State of U.P. v. Jai Bir Singh (2005) 5 SCC 1, asserting that institutions performing sovereign functions, like policing, fall outside the ID Act’s scope. The Academy, he contended, merely trained police officers and thus was part of the government’s sovereign machinery.
He cited several precedents, including Bangalore Water Supply v. A. Rajappa (1978) 2 SCC 213, but argued that the judgment’s “dominant nature test” excluded organizations performing sovereign functions. The counsel further argued that the employee’s initial appointment was irregular—made without advertisement or interviews—and thus she was not entitled to regularization or reinstatement.
He also submitted that the Maharashtra Administrative Tribunal, not the Labour Court, had jurisdiction over the matter since the Academy was a government body.
Respondent’s Arguments
Counsel for the respondent submitted that the Academy, though created for police training, had evolved into a semi-autonomous commercial entity that conducted courses for private security agencies and civilians for substantial fees. The presence of a canteen, swimming pool, hostels, and other revenue-generating amenities showed that it was engaged in organized economic activity—thereby meeting the “functional test” of an industry.
He emphasized that the respondent had continuously worked for over eight years, performing clerical duties under the supervision of officers, and had completed over 240 days of work each year, fulfilling the statutory condition under Section 25-B of the ID Act.
The termination, he argued, amounted to retrenchment under Section 2(oo) of the ID Act, and since no notice or compensation was paid as required by Section 25-F, it was illegal. Citing Ramesh Kumar v. State of Haryana (2010) 2 SCC 543, he asserted that even temporary workers are entitled to statutory protection against arbitrary retrenchment.
He also pointed to the 2016 Government Resolution and subsequent Executive Committee decisions, which had resolved to regularize daily-wage employees and pay them according to the sanctioned scale. The Academy’s failure to implement its own resolutions, he argued, proved bad faith and amounted to unfair labour practice.
Analysis of the Law
Justice Jadhav framed three central questions — whether the Academy was an industry, whether the employee was a workman, and whether the termination complied with Section 25-F of the ID Act.
Referring to the Bangalore Water Supply case, the Court reiterated that “sovereign functions” are limited to activities like defence, lawmaking, or justice delivery, and do not extend to welfare or economic activities conducted by the State. Since the Academy charged fees for training and operated facilities accessible to civilians, it could not claim complete sovereign immunity.
The Court further noted that the employee performed clerical and computer-related work, not policing duties, and therefore fell squarely within the definition of “workman” under Section 2(s).
Finally, it held that the termination was clearly retrenchment within the meaning of Section 2(oo) and that compliance with Section 25-F was mandatory even for daily-wage workers. Since no notice or compensation was given, the termination was illegal.
Precedent Analysis
The Court relied upon several authoritative precedents:
- Bangalore Water Supply & Sewerage Board v. A. Rajappa (1978) 2 SCC 213
– Laid down the “triple test” for determining what constitutes an industry: systematic activity, employer-employee cooperation, and production of goods/services for human wants.
– The Court applied the “dominant nature test” and held that the Academy met these criteria. - Ramesh Kumar v. State of Haryana (2010) 2 SCC 543
– Held that termination of a casual employee completing 240 days without notice or compensation is illegal, even if the initial appointment was irregular. - Dharam Singh v. State of Uttar Pradesh (2025 SCC OnLine 1735)
– Emphasized that the State, as a constitutional employer, must not perpetuate ad-hocism and cannot justify exploiting daily-wage workers on grounds of financial constraints.
Applying these precedents, the High Court affirmed that the Academy’s conduct violated both statutory and constitutional protections for workers.
Court’s Reasoning
Justice Jadhav observed that the Academy’s own Executive Committee resolutions acknowledged that several daily-wage employees were performing permanent functions and should have been regularized. The Court termed the Academy’s failure to do so as an “exploitative practice contrary to constitutional fairness.”
He held that the sovereign character of the Academy does not immunize it from labour obligations, noting:
“The State cannot balance its budgets on the backs of those who perform its most basic and recurring public functions.”
The Court also cited the Supreme Court’s remarks in Dharam Singh that continued ad-hocism corrodes public confidence and offends Articles 14, 16, and 21 of the Constitution.
Conclusion
The High Court upheld the Industrial Court’s judgment, holding that:
- The Maharashtra Police Academy is an “industry.”
- The respondent is a “workman.”
- The termination without notice and compensation was illegal and violative of Section 25-F of the ID Act.
Accordingly, the Academy was directed to reinstate the employee as High-Grade Stenographer, grant full back wages, continuity of service, and permanency benefits within two weeks.
The judgment was stayed for six weeks to allow the Academy to approach the Supreme Court.
Implications
This judgment strengthens the legal position that:
- Sovereign bodies performing mixed functions are not immune from labour laws.
- Daily-wage workers completing 240 days’ service cannot be terminated arbitrarily.
- Public institutions must regularize long-serving employees performing perennial tasks.
- The State, as a constitutional employer, must uphold fairness, transparency, and dignity of labour.
The ruling resonates with contemporary judicial emphasis on dismantling ad-hocism and promoting permanent, equitable public employment structures.
