Dear Srihari, After the landmark case of Bangalore Water Supply case (Bangalore Water Supply and Sewerage Board v. A. Rajappa 1978 AIR 548, 1978 SCR (3) 207) , the interpretation of the term "industry" as per Section 2(j) of the ID Act 1947 has undergone dramatic change. 'Industry', as defined in Section 2(j) and explained by Justice Krishna Iyer in this case, has a wide import. The Supreme Court laid down the following definition of “industry”:
(a) Where there is (i) systematic activity, (ii) organized by co-operation between employer and employee, (the direct and substantial element is chimerical)(iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss e.g. making, on a large scale, prasad or food), prima facie, there is an 'industry' in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint private or other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.
(d) If the organisation is a trade or business it does not cease to be one because of philanthropy animating the undertaking.
So, being a charitable organisation does not absolve you from the rigors of ID Act.