Introduction
The Supreme Court of India addressed this long-standing question in State of Uttar Pradesh v. Jai Bir Singh, decided on 20 August 2026 by a nine-judge Constitution Bench. The judgment revisited the principles laid down in the landmark Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978) case.
Background: The Bangalore Water Supply Case
In 1978, a seven-judge Constitution Bench interpreted the meaning of “industry” under Section 2(j) of the Industrial Disputes Act, 1947.
Justice Krishna Iyer developed what became known as the Triple Test. Under this approach, an organisation could generally qualify as an industry where:
It carried on a systematic activity.
The activity involved cooperation between employers and employees.
It produced or distributed goods or services to satisfy human wants and needs.
Importantly, the Court held that the absence of a profit motive did not automatically exclude an organisation from the definition.
This interpretation significantly expanded the scope of labour protections and brought several non-commercial activities within the potential coverage of industrial dispute legislation.
Why Was the Matter Reconsidered?
Over the years, questions arose about whether the broad interpretation was appropriate for every type of organisation. Courts faced disputes involving hospitals, government departments, welfare activities and other institutions.
In State of Uttar Pradesh v. Jai Bir Singh, the Supreme Court was asked to reconsider the correctness of the 1978 interpretation and clarify the scope of the term “industry”.
The matter eventually reached a nine-judge Constitution Bench because the original interpretation had been delivered by a seven-judge Bench.
What Did the Supreme Court Decide in 2026?
The nine-judge Bench delivered a split decision containing multiple opinions.
The majority opinion authored by Chief Justice Surya Kant, along with three other judges, proposed refining the Triple Test by requiring an activity to possess a discernible commercial character analogous to trade or business.
However, the Court did not simply replace the earlier interpretation for all existing disputes. The refined formulation was intended as prospective guidance.
Other judges expressed different views, with several supporting the original Triple Test without requiring its reconsideration.
The important practical outcome was that pending disputes under the Industrial Disputes Act, 1947, must continue to be decided according to the principles laid down in the Bangalore Water Supply judgment.
Does the Judgment Apply to the New Industrial Relations Code?
This distinction is particularly important.
The Industrial Relations Code, 2020, has replaced the Industrial Disputes Act framework. The new Code contains its own definition of “industry” under Section 2(p).
The Supreme Court clarified that the interpretation developed in the 1978 judgment should not automatically determine the meaning of “industry” under the new Code. The new statutory definition must be interpreted independently.
Therefore, readers should not assume that the nine-judge judgment automatically changes the coverage of every organisation under the current labour-law framework.
Why Is This Judgment Important?
The ruling is significant for employers, employees, labour lawyers and organisations involved in industrial disputes.
It clarifies which interpretation should govern pending proceedings under the repealed legislation and distinguishes those disputes from matters arising under the new Industrial Relations Code.
It also demonstrates how constitutional courts balance judicial precedents, legislative changes and the need for legal certainty.
Conclusion
The 2026 nine-judge decision in State of Uttar Pradesh v. Jai Bir Singh is an important development in Indian labour jurisprudence. Rather than treating the 1978 interpretation as automatically applicable to every future dispute, the Supreme Court clarified its continuing relevance to pending cases under the old legislation while leaving the new Code to be interpreted on its own terms.
For law students, employers and employees, understanding this distinction is essential when examining the scope of industrial dispute protections in India.