In a move set to redefine the terrain of Indian labour relations, Supreme Court on Monday announced it will constitute a nine-judge Constitution Bench to resolve a decades-old debate over the legal definition of an “industry.”
According to reports from LiveLaw and Bar and Bench, the high-stakes hearing is scheduled to commence on March 17, 2026. The Bench, led by Chief Justice of India Surya Kant, aims to bring finality to whether modern government welfare schemes and various social institutions should still be governed by the same labour laws that apply to commercial factories.
Legacy of the Bangalore water supply case
The core of the current dispute lies in the 1978 judgment of Bangalore Water Supply & Sewerage Board vs A Rajappa. In that landmark seven-judge bench decision, Justice V Krishna Iyer established an inclusive “triple test” to identify an industry.
As detailed by Bar and Bench, an organistion is considered an industry if it engages in systematic activity, maintains organised cooperation between employer and employee and focusses on the production or distribution of goods and services to satisfy human wants.
This wide-reaching interpretation brought various entities—including hospitals, educational institutions, clubs and government research bodies—under the ambit of the Industrial Disputes Act, 1947, granting their staff the right to unionise and engage in collective bargaining.
Evolution of the legal challenge
The journey to a nine-judge bench has been lengthy. LiveLawnotes that the scepticism toward the 1978 ruling first gained formal momentum in 2005, when a five-judge bench in State of Uttar Pradesh vs Jai Bir Singh referred the matter to a larger bench.
By 2017, a seven-judge bench determined that because the Bangalore Water Supply case was itself a seven-judge decision, only a larger nine-judge bench could effectively overrule or modify it. The current bench, also comprising Justices Joymalya Bagchi and Vipul Pancholi, has now confirmed that the administrative order to notify this 9-judge composition is imminent.
Key issues for the Constitution Bench
The Supreme Court has outlined several critical questions to be answered during the March hearing. Primarily, the court will examine if the “triple test” laid down by Justice Krishna Iyer remains the correct law in the 21st century. Furthermore, LiveLaw reports that the bench will investigate the legal impact of the Industrial Disputes (Amendment) Act of 1982, which seemingly never came into full force, alongside the more recent Industrial Relations Code of 2020.
A major point of contention involves determining whether social welfare schemes and specific activities undertaken by government departments should be construed as “industrial” or if they fall outside the purview of Section 2(j) of the Act.
Procedural timeline and case management
The apex court indicated that the preparatory phase of the litigation is largely complete.
According to Bar and Bench, parties have until February 28, 2026, to update their written submissions or file additional documents.
To ensure efficiency, the apex court has mandated strict timelines, granting petitioners three hours for their main arguments and one hour for rejoinders. Nodal counsel from both sides are required to coordinate an arrangement that ensures all arguments are concluded within the two-day window allocated for the hearing, marking a push for a swift and definitive resolution to this long-standing legal ambiguity.
