What did the Supreme Court decide?

It held that the Telecommunications Department is an “industry” under Section 2(j) because it provides commercial services, not sovereign functions.

Which test did the Court rely on?

The Court reaffirmed the Bangalore Water Supply test for determining “industry.”

Are government departments always outside the ID Act?

No. If they do commercial or service activities, they can be an “industry.” Only core sovereign functions are excluded.

What happened to earlier contrary cases?

Decisions like Theyyam Joseph and Bombay Telephone Canteen Employees’ Association were found incorrect on this point.

Why is this case important for workers?

It confirms that workers in such departments can claim ID Act protections if the unit qualifies as an “industry.”

GM, Telecom v. A. Srinivasa Rao (1997) 8 SCC 767

Is the Telecom Department an “industry” under Section 2(j) of the Industrial Disputes Act, 1947?

Citation: (1997) 8 SCC 767 Supreme Court Labour / Industry ~6 min read India

Author: Gulzar Hashmi Published: 23 Oct 2025 Keywords: Section 2(j), industry, sovereign functions

Hero image for GM, Telecom v. A. Srinivasa Rao case explainer

Quick Summary

The Supreme Court held that the Telecommunications Department is an industry under Section 2(j) of the Industrial Disputes Act, 1947.

It provides commercial services to the public. It is not performing sovereign functions in this context. The Bangalore Water Supply test applies.

Issues

Can the Telecom Department be treated as an “industry” under Section 2(j)?
Do workers engaged there get ID Act protection based on that status?

Rules

Section 2(j) (ID Act): A unit is an industry if it carries on systematic activity of goods/services for the community, with employer–employee cooperation.

Sovereign functions (like core law-making, defense, justice) are excluded. Commercial/service activities are generally included.

Facts (Timeline)

Timeline: engagement of contract labour, tribunal, High Court, Supreme Court decision

Contract work: A. Srinivasa Rao worked as contract labour in the central government’s Telecom Department, doing daily operational tasks.

Demand: Rao and others sought regularisation, saying their work was core, not casual or peripheral.

Department’s stand: Claimed it performed sovereign functions; therefore not an “industry.”

Industrial Tribunal: Held Telecom is an industry due to its commercial/service nature; workers covered by ID Act.

High Court: Affirmed Tribunal—Telecom provides paid public services; not sovereign in this sense.

Supreme Court (Final): Dismissed appeal; confirmed that the Department is an industry under Section 2(j).

Arguments

Appellant: GM, Telecom

Department is part of the State; functions are sovereign.
So, ID Act definition of “industry” does not apply.
Earlier cases suggested similar immunity.

Respondent: A. Srinivasa Rao

Daily telecom services are commercial/public services for a fee.
This is not a core sovereign task like defense or justice.
Apply Bangalore Water Supply test → it is an “industry.”

Judgment

The Supreme Court dismissed the appeal. The Telecom Department is an industry under Section 2(j).

The Court stressed: commercial/service character → industry; sovereign functions are limited and do not cover such telecom services.

Judgment visual representing Supreme Court ruling on industry definition

Ratio Decidendi

Units giving organised services to the public for consideration are “industries,” unless they perform core sovereign functions. Telecom services are commercial, hence included.

Why It Matters

Clarifies when a government department falls under the ID Act.
Protects workers in public service entities that operate commercially.
Reaffirms Bangalore Water Supply as the guiding test.

Key Takeaways

Commercial/service nature → “industry.”
Sovereign functions = narrow exception.
Government label alone does not exclude ID Act.

Mnemonic + 3-Step Hook

Mnemonic: “TEL = TRADE” — Telecom equals trade → industry.

Service? Public service for a fee?
Systematic? Organized activity with staff?
Sovereign? If no → It’s an “industry.”

IRAC Outline

Issue	Rule	Application	Conclusion
Is the Telecom Department an “industry”?	Section 2(j) + Bangalore Water Supply test.	Provides organised telecom services to public for consideration.	Yes, it is an “industry.”
Do sovereign functions exclude it?	Only core sovereign tasks are excluded.	Telecom operations here are commercial/service in nature.	Exclusion does not apply.

Glossary

Industry (ID Act): Systematic activity of producing/supplying goods or services, with employer–employee cooperation.
Sovereign Functions: Core state functions like defense, law-making, and administration of justice.
Regularisation: Granting permanent status to workers doing continuous, core work.

FAQs

Telecom Department = “industry” under Section 2(j). Sovereign exception does not cover its routine services.

Bangalore Water Supply test guides the meaning of “industry.”

No. Only core sovereign functions are excluded. Commercial or service activities can be “industry.”

Cases like Theyyam Joseph and Bombay Telephone Canteen were considered incorrect on this point.

Publication Details

CASE_TITLE: GM, Telecom v. A. Srinivasa Rao, (1997) 8 SCC 767
PRIMARY_KEYWORDS: General Manager Telecom v. A. Srinivasa Rao; Section 2(j); Industrial Disputes Act 1947; industry; sovereign functions; Bangalore Water Supply
SECONDARY_KEYWORDS: Telecommunications Department; contract labour; regularisation; Industrial Tribunal; Supreme Court 1997; Article 136