Can temples be treated as ‘industry’? SC reserves verdict on 1978 definition

The Supreme Court on Wednesday reserved its judgment on a reference examining the definition of “industry”, with the question of whether temple activities can fall within its ambit emerging as a key flashpoint during hearings before a nine-judge Constitution bench.

Also Read: From hospitals to govt offices: What counts as ‘industry’? & why a 9-judge Supreme Court bench is revisiting a 1978 ruling

The Tamil Nadu Hindu Religious & Charitable Endowments (HR&CE) Commissioner told the court that bringing temples under the definition would be legally untenable, as their activities lack any commercial or profit motive. Appearing for the body, senior advocate Jaideep Gupta argued that temples are sustained largely through donations and surplus generated by a few institutions, and cannot be equated with industrial establishments.


He submitted that an “industry” must involve a structured employer-employee relationship aimed at producing goods or services to meet human needs, and must carry a commercial character—conditions that temple administration does not satisfy under the Industrial Disputes Act, 1947.

The submissions came as the Constitution bench, led by Chief Justice of India Surya Kant, reserved its verdict on whether to revisit the expansive interpretation laid down in the landmark 1978 Bangalore Water Supply and Sewerage Board vs A Rajappa case.

Expansive test under scrutiny

At the heart of the matter is the so-called “triple test” evolved in the 1978 ruling, which defined an industry as any systematic activity involving cooperation between employer and employee for the production or distribution of goods and services. The judgment brought a wide range of entities—including hospitals, educational institutions and government departments—within the ambit of labour laws.

Over time, however, this sweeping definition has faced criticism for stretching the scope of labour regulation too far.

During the hearing, Justice B V Nagarathna pointed to the shift in India’s economic landscape since the ruling, noting that liberalisation, privatisation and globalisation have significantly altered the role of the state and private sector.

She observed that as more functions earlier performed by the state move to private hands, the court must reconsider whether the definition of “industry” should remain as expansive or be recalibrated to strike a balance.

Long legal journey

The issue has been under judicial consideration for over two decades. In 2005, in State of UP vs Jai Bir Singh, a five-judge bench flagged concerns that the definition had been stretched excessively, potentially burdening employers and contributing to a surge in litigation.

The matter was subsequently referred to larger benches, culminating in a 2017 direction by a seven-judge bench to place the issue before a nine-judge Constitution bench for authoritative resolution. Final hearings commenced this week.

The court is also examining whether subsequent legislative changes, including the Industrial Disputes (Amendment) Act, 1982 and the Industrial Relations Code, 2020, warrant a reinterpretation of the term.

High-stakes outcome

The ruling is expected to have far-reaching implications for labour law in India, determining which organisations fall within the regulatory framework governing wages, industrial disputes and worker protections.

A broader definition would extend labour law compliance to a wide array of entities, while a narrower interpretation could exclude several sectors—particularly in an economy increasingly shaped by privatisation.

The court is also grappling with related questions, including whether government welfare activities qualify as “industry” and how to delineate sovereign functions that may lie outside the scope of labour laws.

Also Read: Definition of word 'industry': SC refers matter to 9-judge bench

For workers, the outcome could redefine the contours of job protections across sectors—from traditional industries to institutions such as hospitals, educational bodies, NGOs and potentially even religious establishments.

With the bench reserving its judgment, the case now hinges on how the court chooses to reconcile a decades-old legal framework with the realities of a transformed economic order.

(With inputs from TOI)