What was the main question before the Court?

Whether APMC, a statutory market regulator, is an “industry” under Section 2(j) of the Industrial Disputes Act, 1947.

Did the Supreme Court treat APMC’s work as sovereign?

No. Market regulation and fee collection are organised, non-sovereign activities that private bodies could also perform.

Does Presidential assent to the Karnataka Act displace the ID Act?

No. The Karnataka Act did not override the Industrial Disputes Act for these employees.

What happened to the terminated employees?

They were held to be workmen protected by the ID Act. Labour Court’s reinstatement orders stood.

What test did the Court rely on?

A multi-factor, reality-based approach—look at the nature of functions, organisation, and whether activities are sovereign or could be done by private entities.

Agricultural Produce Market Committee v. Ashok Harikuni

Quick Summary

This case asks two things: Is APMC an “industry” under the Industrial Disputes Act, 1947? And does the Karnataka APMC Act (with Presidential assent) push the ID Act aside? The Supreme Court answered: APMC’s market regulation work is not sovereign. It is organised activity that private bodies could also do. So, APMC is an “industry”; its staff are “workmen” protected by the ID Act. The Karnataka Act does not displace the ID Act here.

Hero image for APMC v. Ashok Harikuni case explainer

Issues

Does APMC, created under the Karnataka APMC Act, qualify as an “industry” under Section 2(j) of the ID Act, 1947?
Does the Karnataka Act with Presidential assent override the ID Act for APMC employees?

Rules

A statutory body is an “industry” if its functions are non-sovereign and involve systematic, organised activity—even if done in the public interest and without profit. Courts use a practical, multi-factor view and ask whether similar work can be done by private bodies. If yes, the ID Act can apply.

Facts — Timeline

Regulator: APMC runs regulated markets in Karnataka to ensure fair prices for farmers.

Appointments: Seven employees were engaged on temporary posts (e.g., Assistant Engineer, Fee Collector, Peon, Work Inspector, Watchman).

Termination: Their services were ended at different times.

Labour Court: Set aside terminations; held APMC is an “industry”; ordered reinstatement.

High Court (Single + Division Bench): Upheld Labour Court; ID Act applies.

Supreme Court Appeal: APMC argued its functions are sovereign and State Act prevails.

Case timeline for APMC v. Ashok Harikuni

Arguments

Employees

APMC’s work is organised regulation and market services, not core sovereign power.
The ID Act should protect them as “workmen”.
Labour Court rightly ordered reinstatement.

APMC/State

Functions are sovereign and statutory; ID Act should not apply.
The Karnataka APMC Act, with Presidential assent, controls the field.
Labour Court lacked jurisdiction.

Judgment

The Supreme Court dismissed the appeal. It held that APMC’s activities—regulating markets, collecting fees, providing market facilities—are non-sovereign and could be done by private bodies. Therefore, APMC is an “industry” under Section 2(j) of the ID Act. The Karnataka Act does not push the ID Act aside in this context. The Labour Court had jurisdiction and its reinstatement orders stood.

Ratio

Function over label: Ask if the activity is sovereign in nature. If work is organised, service-oriented, and possible for private actors, the body is an “industry” and the ID Act can apply.

Why It Matters

Clarifies boundary between sovereign and regulatory functions.
Protects employees of statutory market bodies under the ID Act.
Guides tribunals on using a realistic, multi-factor approach.

Key Takeaways

Not all statutory functions are sovereign.
“Industry” under ID Act depends on the nature of activity, not profit motive.
State Act with Presidential assent does not automatically trump the ID Act.
Reinstatement can follow if ID Act protections apply.

Mnemonic + 3-Step Hook

Mnemonic: “FOP Test” — Function (sovereign or not), Organisation (systematic activity), Possibility (can private bodies do it?).

Check Function: Is it core State power? If no → move on.
See Organisation: Is it structured market regulation/service?
Ask Possibility: Could private actors provide similar services?

IRAC Outline

Issue	Is APMC an “industry” under Section 2(j) ID Act? Does the Karnataka Act override the ID Act for APMC staff?
Rule	Non-sovereign, organised functions that private bodies could perform fall within “industry”. State Act does not displace ID Act unless clearly provided.
Application	APMC regulates markets and collects fees—organised, non-sovereign services. Employees fit within ID Act protection.
Conclusion	APMC is an “industry”; ID Act applies; Labour Court had jurisdiction; reinstatement upheld.

Glossary

Industry (ID Act): Any organised activity where employers and workmen co-operate to provide goods/services—profit motive not essential.
Sovereign Function: Core State functions like law-making, defence, judiciary—usually outside industrial law.
Jurisdiction: Legal power of a court/tribunal to hear and decide a matter.