Does hospital administration fall below the definition of “business”?

Does hospital management fall under the definition of “industry”? written by Surya Sunilkumar student at the Ramaiah Institute of Legal Studies

State of Bombay & Ors vs. Majdoor Sabha Hospital (1960)


The dispute between workers and management in an industry is resolved according to the procedures set out in the Industrial Dispute Act of 1947. The aim of this law is to provide provisions for the investigation and settlement of industrial disputes for other purposes. In-State of Bombay v The Hospital of Majdoor Sabha, the question arose about the interpretation of the word industry and whether cases of this kind can be heard before the labor court under Section 10 of the above-mentioned law.

Facts of the case

The complainant has a group of hospitals that have been established since 1845. The group is under the administrative control of the complainant’s surgeon general and its daily affairs are controlled by the superintendent. The complainant here bears the costs and salaries of the employees. The hospital administration fired two staff members and replaced them with two staff members who were released from the civil care department. The staff filed a written petition with the Bombay High Court stating that the curtailment orders were not invalid. The matter was then brought before the Court of Appeals, which ruled that the orders did not fall within the scope of Section 25F of the Act and were therefore invalid. The court also ruled that the labor dispute law applies to hospitals and issued a mandamus charter. Therefore, the applicants turned to the Supreme Court to set aside the judgment.


  • Whether the provisions of the Industries Dispute Act of 1947 apply to the word hospital, does hospitals come under the meaning of industry under that act?
  • Whether the dismissal order of two employees for non-compliance with Section 25F of the law is invalid?


The court’s observations on the case are:

  • The staff were laid off to make room for those who had been on duty in the civilian supplies department for extended periods. This happened due to the closure of the department.
  • Section 25F of the Industrial Disputes Act lists the conditions for dismissing workers. Section (b) of this section clearly states: “… (b) the worker was paid, at the time of the reduction, compensation equal to the average salary of fifteen days 2 [for every completed year of continuous service] or part of it that lasts longer than six months… ”This condition, as well as the other two, if the clause is met, provide that no worker will be dismissed until the condition in question is met. Section 251 of the Act provides for the recovery of funds owed by employers in accordance with Chapter V. However, Section 25F (b) is a mandatory provision and cannot be ignored. Any curtailment order that is inconsistent with Section 25F (b) of the Act will be void and ineffective.
  • In view of the fact that the words used in s. 25F (b) are mandatory and their effect is clear and precise. The Supreme Court has found that it is right to be ruled by the Court of Appeal.
  • The court referred to several cases to determine the importance of industry under Section 2 (j) of the Labor Disputes Act. The Hon’ble Court ruled that hospitals are covered by the word industry, so the Labor Court has jurisdiction over the petitioner’s case.
  • As a result, the court issued a judgment confirming the High Court’s decision on the respondents’ written application and rejecting the appeal.

Case analysis

  • This case has tried to interpret the real meaning of the industry. Pursuant to Section 2 (j), “industry” means any business, trade, company, manufacture or occupation of employers and includes any occupation, service, occupation, craft or trade or occupation of workers. “The court found that the scope of the definition is broad and therefore the hospital cannot be excluded from the importance of industry.
  • The bank also referred to the doctrine of noscuntur a sociis. It is a concept that the meaning of a doubtful word can be determined by referring to the meaning of the words associated with it. This doctrine gave a broader aspect to the interpretation of the word industry.
  • A combination of different doctrines and jurisdictions helped the court determine the scope and application of Section 2 (j).
  • It should rightly be noted that when a word of the provision needs to be interpreted, the court should take into account the subject matter and intent of the legislature who made the law.


The Supreme Court upheld the High Court’s decision. The cut was found to be invalid and ineffective. And the word industry has a wider scope, so hospitals are also considered industry.

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