1. Petitioners Nos. 1 to 16 were employed as Octroi Moharirs in the services of the respondent Municipal Council, Bhahdara. Petitioner No. 17 was a confirmed peon but was doing the work of a Naka Moharir as a relieving Moharir. Petitioners Nos. 1 to 4 were confirmed in the year 1967. "With a view to get more income from the Octroi Department, the Government directed the various Municipal Councils to suitably revise the rates of the octroi duty within the maximum and minimum prescribed and also directed that the expenditure on recovery of the octroi duty should be maintained at the minimum so that the new rates of octroi will give the maximum increase in the income. It is also stated that the proposal to abolish the octroi tax was under the consideration of the Government and if by increasing- the octroi tax and reducing the expenditure the Municipal Councils showed more income, they would be more benefited by the reimbursement which the Government shall be making to them in respect of the loss of that income. It Was found, so far as the respondent Municipal Council was concerned, that out of the several octroi Nakas, two Nakas were absolutely unproductive and there were others also of which expenditure was not commensurate with the income derived. It was, therefore, decided by the Municipal Council to close down five octroi Nakas and to reduce the proportionate staff which should have been necessary to man these five Octroi Nakas.
2. It was in pursuance of this policy that a resolution was passed by the Municipal Council in its special meeting held on August 21, 1968, whereby it decided to close down five octroi nakas and to terminate the services of the 17 petitioners with effect from October 10, 1968. Accordingly, notices were issued to each of these 17 petitioners on September 6, 1968, directing them to hand over charge of their posts to the Octroi Superintendent on October 9, 1968, afternoon.
3. The termination of services was challenged by the present petitioners on various grounds, but during the arguments, the challenge is confined only to one matter and that Was, that the Octroi Department was an "industry" within the meaning of Section 2(j) of the Industrial Disputes Act, 1947 and the termination of services was, in effect, retrenchment within the meaning of H, 2 (00) of the Act and hence the procedure laid down in Chapter VA of the Industrial Disputes Act should have been followed, and that not having been followed, the retrenchment was illegal and the petitioners are entitled to be reinstated in their posts. This petition was filed on October 7, 1'968 and an ad interim stay order was issued on October 8, 1968. This interim stay order was further confirmed on October 16, 1968, with the result that the petitioners have been continued in their posts, as a result of this stay order.
4. It was contended by the learned Counsel for the petitioners that before the petitioners could be retrenched by the Municipal Council, one month's notice in writing had to be given to these employees indicating the reasons for the retrenchment or they should have been paid in lieu of such notice wages for the period of notice. Secondly, it was contended that the workmen had to be paid at the time of the retrenchment, the compensation which shall be equivalent to 15 days' average pay for every completed year of continuous! service or any part thereof in excess of six months and notice in the prescribed manner has to be served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette. A notice of one month terminating the services of the 17 petitioners has been given in this case by the respondent Municipal Council. It is, however, contended that the retrenchment compensation also ought to have been paid as per Clause (b) of Section 25P of the Industrial Disputes Act and since the retrenchment compensation has not been paid in this case, the termination or retrenchment is bad and the notice dated September 6, 1968, cannot have the effect of terminating the services of the 17 petitioners. It is not seriously disputed that the termination of the employment of the 17 petitioners amounts to retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act, and if this Octroi Department of the Municipal Council were to be held as an "industry" then the requirement of Clause (b) of Section 25F had to be complied with by the Municipal Council. It is urged on behalf of the petitioners that the Octroi Department of the Municipal Council at Bhandara is an "industry" within the meaning of the Industrial Disputes Act and as such, the provisions of Section 25F of the Industrial Disputes Act will apply to this Department. On the other hand, it has been urged on behalf of the respondent that the Octroi Department is not an "industry" within the meaning of Section 2(j) of the Industrial Disputes Act and as such, it was not necessary for the Municipal Council to comply with the requirements of Section 25F of the Act before terminating the services of the petitioners. This is the only point which has been canvassed before us and it needs to be considered as to whether the Octroi Department, of which the 17 petitioners were the employees, is an "industry" within the meaning of the provisions of Section 3(j) of the Industrial Disputes Act so as to attract the provisions of Section 25F of the said Act.
5. The respondent Municipal Council has been formed under the Maharashtra Municipalities Act, 1965, which came into force from September 14, 1965. The Municipal Council has been collecting, what is known as, 'octroi tax' and for that purpose it had defined the octroi limits and erected octroi posts at 12 places. For the collection of octroi tax on the goods imported within the octroi limits of the Municipal Council several persons known as Naka Moharirs were appointed at each of these octroi posts and their duty was to collect the tax on the goods that were brought within the octroi limits at the rates prescribed and to credit the amount so realised with the Municipal Council. The present petitioners were doing such duty of the Naka Moharirs during their service.
6. Term "industry" has been denned to mean any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial occupation or a vocation of workman. Chapter IX of the Maharashtra Municipalities Act deals with the topic of 'Municipal Taxation' and Section 105 provides for compulsory imposition of taxes mentioned therein. One of these compulsory impositions is an 'octroi tax' in Clause (6) of Sub-section (1) of Section 105. Sub-section (1) of Section 105 provides that subject to any general or special orders which the State Government may make in this behalf, a Council shall impose, for the purposes of this Act, the taxes listed in that sub-section and one of these taxes is an 'octroi tax'. Under the Municipalities Act, therefore, the Municipal Council is bound to impose an octroi tax unless there is any general or special order by the Government in that behalf. It was under this directive that this tax has been imposed by the Municipal Council.
7. The question whether the Municipal Council or the Municipal Committee is an "industry" or not, came rip for consideration before the Supreme Court in the Judge Judge Municipality case which is D.N. Sanerji v. P.R. Mukherjee  2 K.B. 486. Subsequently, similar question arose in the Hospital Mazdoor Sabha case reported as State of Bombay v. Hospital Mazdoor Sabha where the question was whether a hospital was an "industry" or not. A case of municipality was again considered in the case of Nagpur Corporation v. Its Employees . In the last case' certain tests were laid down by
the Supreme Court to find out whether a particular Department of the Municipality is an "industry" or not and the result was summarised in this way:
...(1) The definition of ' industry ' in the Act is very comprehensive. It is in two parts : one part defines it from the standpoint of the employer and the other from the standpoint of the employees. If an activity falls under either part of the definition, it will be an industry within the meaning of the Act. (2) The history of industrial disputes and the legislation recognizes the basic concept that the activity shall be an organized one and not that which, pertains to private or personal employment. (3) The regal functions described as primary and inalienable functions of State though statutorily delegated to a corporation are necessarily excluded from the purview of the definition. Such regal functions shall be confined to legislative power, administration of law and judicial power. (4) If a service rendered by an individual or a private person would be an industry, it would equally be an industry in the hands of a corporation. (5) If a service rendered by a corporation is an industry, the employees in the departments connected with that service, whether financial, administrative or executive, would be entitled to the benefits of the Act. (6) If a department of a municipality discharges many functions, some pertaining to industry as defined in the Act and other non-industrial activities, the predominant functions of the department shall be the criterion for the purposes of the Act.
In the proceedings out of which the appeals before the Supreme Court arose, the State Industrial Court had held that the department concerned with the assessment and levy of octroi was not an "industry" within the meaning of the Act. It, however, appears that the employees of that Department did not prefer any appeal against the award and hence this question, whether the Octroi Department was an "industry" or not did not come up for consideration before the Supreme Court, It would appear from this decision that the legal functions of the Corporation were excluded from the purview of the definition and the test laid down was that the activity carried on by a Corporation which could as well have been carried out by a private individual or a firm, would bring- it within the definition of the word "industry". The Supreme Court then considered the several departments of the Corporation to find out whether they satisfied the aforesaid test and held some of those departments as coming- within the term "industry".
8. This matter again came up for consideration before the Supreme Court and the latest decision of the Supreme Court is Madras Gymkhana Club Employees' Union v. Management in which all the
earlier cases have been considered. In this case, it was contended that the Madras Gymkhana Club was an "industry" within the meaning of Section 2(j) of the Industrial Disputes Act. The Madras Gymkhana Club was a Members' Club and not a Proprietary Club. The object of the Club was to provide a venue for sports and games and facilities for recreation and entertainment. As part of the latter activities it arranged dance, dinner and other parties and ran a catering department, which provided food and refreshments not only generally but also for dinners and parties on special occasions. It employed some officers, clerks, peons, stewards, butlers, gate attendants etc. It was held in this case that the Club was only a Members' Club and not an industry, holding that no doubt, the material needs or wants of a section or community were catered for, but that was not enough as it was not done as a part of trade or business or as undertaking analogous to trade or business. While dealing with the definition of "employer''' it was observed that a local authority may become an "employer" if it carries on an industry and it cannot be disputed on the basis of the earlier authorities also that if a local authority carries 011 certain activities which may amount to an "industry", then the local authority would be an "employer" within the meaning- of Section 2(o) of the Industrial Disputes Act and the employees working in that industry would be the 'employees' and would be governed by the provisions of the Industrial Disputes Act. The question, however, is whether the whole local authority, if it carries on some activity in some of its departments, can be termed as an "industry" or whether a particular department of the Municipal Council or the local authority which carries on an activity which might be termed as an "industry" would be an "industry" and whether the Act would be applicable only in so far as that particular department is concerned. In fact, this was done in Nagpur Corporation v. Its Employees, where the Supreme Court took the matter departmentwise and looking to the activities which were carried on by that particular department, it was held that it was or was not an "industry" within the meaning of Section 2(j) of the Industrial Disputes Act.
9. This has been emphasised, by the Supreme Court in its latest decision in Madras Gymkhana- Club Employees' Union v. Management in which the Supreme Court observed (p. 558) :
The definition of ' employer ' in our Act clearly shows that a local authority may become employer if it carries on an industry. This means that a municipality if it indulges in an activity which may be properly described as industry may be involved in an industrial dispute. Local bodies are primarily subordinate branches of governmental activity. They function for public purposes but some of their activities may come within the calling of employers although the municipalities may not be trading corporations.
Thus, it will have to be seen as to whether the activity of the Octroi Department of which the petitioners are the employees can be described as an "industry" so as to make the Industrial Disputes Act applicable to them.
10. Ordinarily, imposition, collection and levy of a tax is the function of the State and no one else can impose, collect or levy the taxes. It is thus primarily a governmental function which cannot be carried out by any individual or a firm like other activities, for example, supply of water, lighting, markets or such other activities. However, the Government has given away a part of this function to the local bodies by authorising the local bodies to collect some of the taxes which was primarily the duty and responsibility of the Government. In the case of the Municipal Councils this power has been delegated by the Government to the Municipal Councils and by Section 105 of the Maharashtra Municipalities Act, the Government has authorised the Municipal Councils to impose, levy and collect the octroi taxes amongst others, and it is this function which the Government has passed on to the Municipal Councils that they are carrying on by imposing, levying and collecting the octroi tax. If the Government were to impose this tax without delegating that part to the Municipal Councils, it would have been a governmental or a regal function which nobody else could do and it would not have been an activity which would come within the purview of the definition of the word "industry". Such is the function which is being done by the Municipal Council in imposing, collecting and levying this octroi tax as a part of the affair of the Government in that particular area and thus, the Municipal Council exercises its powers of regulation and subordinate taxation. This activity, therefore, of the Octroi Department which is charged with the duty of collecting the octroi tax on the goods brought within the octroi limits would be a regal or governmental function and as such, could not be termed an activity which would amount to "industry". In the Madras Gymkhana Chili's case, the Supreme Court has observed (p. 558) :
...Local bodies are primarily subordinate branches of governmental activity. They function for public purposes but some of their activities may come within the calling of employers although the municipalities may not be trading corporations. Local authorities take away a part of the affairs of Government in local areas and they exercise the powers of regulation and subordinate taxation. They arc political sub-divisions and agencies for the exercise of governmental functions. But if they indulge in municipal trading or business or have to assume the calling of employers they are employers whether they carry on or not business commercially for purposes of gain or profit.
It would thus be seen that every department of the Municipal Council cannot be held to be an "industry", but it will depend upon the nature of the activities that are carried on by each particular department. Here, in this department, there is no activity carried on which would bring it within the meaning of the word "industry". What is done is to engage certain persons to work as what are known as Naka Moharirs. Their duty is to see that the persons bringing goods from outside within the octroi limits pay the octroi tax on those goods according to the prescribed rates if such goods are liable to pay the octroi tax and after collecting the octroi taxes, to hand them over to the Municipal Council. This work, by itself, cannot be said to be carrying on of any activity which would come within the meaning of the word '; industry ".
11. It is, however, argued on behalf of the petitioners that this amount which is collected as an octroi tax goes into the general municipal fund out of which several activities are carried on by the Municipal Council in the public interest and the Municipal Council renders material services to the community and as such, the Octroi Department which helps the Municipal 'Council in parrying on such material services by collecting octroi tax must also be held 1o be an "industry". In our view, this contention stretches the matter too far. No material services, as such, are done in the public- interest or the community by the Octroi Department as such. The material services are done by such departments as have been mentioned in the Nagpur Corporation case, namely, the Public Conveyance Department, Fire Brigade Department, Lighting Department, Water works Department, Health Department, Market Department and others because those departments look after the welfare of the community by providing them with water, lighting, sanitation, fire prevention etc. No such activity is being done by the Octroi Department to the public in general or to any community as such directly. It may be that the money realised by the Octroi Department may be utilised for rendering material services to the public, but the Octroi Department, as such, does not render any such material services. The contention, therefore, of the learned Counsel for the petitioners cannot be accepted. The activity which is carried on must be such activity as can be regarded as an undertaking analogous to trade or business. By no stretch of imagination, can it be said that the collection of the octroi duty from persons bringing goods into the town is any trade or business and if it is not such an undertaking, which could be said to be analogous to trade or business, then it cannot come under the definition of the word '' industry" in the Industrial Disputes Act. Thus, even on this ground, the activities of the Octroi Department cannot be held to amount to an "industry" and as such, the provisions of the Industrial Disputes Act, and more particularly, of Chapter VA and those of Section 25F(b) would not be applicable in the present case.
12. We were also referred to other decisions, namely, Sirur Municipality v. Its Workmen (1960) 62 Bom. L.R. 905 : s.c.  A.I.R. Bom. 75, and S. Vasudevan v. S.D. 'Mital which were based on the decisions of the Supreme Court in the Hospital Mazdoor Sabha case and the Nagpur Corporation case referred to above. In view of the latest decision of the Supreme Court in Madras Gymkhana Club's case, which has also dealt with the earlier Supreme Court cases, it is not necessary to deal in detail with these cases. After dealing with the several earlier decisions, this decision has laid down certain principles in order to find out whether a particular activity is an "industry" or not and it has been said that (p. 562) :
...Every human activity in-which enters the relationship of employers and employees, is not necessarily creative of an industry. Personal services rendered by domestic and other servants, administrative services of public officials, service in aid of occupations of professional men, such as doctors and lawyers, etc., employment of teachers and so on may result in relationship in which there are employers on the one side and employees on the other but they must be excluded because they do not come within the denotation of the term 'industry.' Primarily, therefore, industrial disputes occur when the operation undertaken rests upon co-operation between employers and employees with a view to production and distribution of material goods, in other words, wealth, but they may arise also in cases where the co-operation is to produce material services. The normal eases are those in which the production or distribution is of material goods or wealth and they will fall within the expression trade, business and manufacture.
The activity of the Octroi Department, in our view, is not an activity of trade, business or manufacture and not even analogous to them and such an activity, therefore, could not be called an "industry" within the meaning of the Industrial Disputes Act. The activity is only a governmental or a regal function which has been passed on by the Government to the Municipal Council in order to provide funds to the Municipal Council for carrying on the purposes of the Act and this has no direct bearing- on other activities of the Municipal Council which render material services to the community at large. Dealing with the word "undertaking" in the definition of the word "industry", the aforesaid case of the Supreme Court observed thus (p. 563) :
The expansion of Governmental or municipal activity in fields of productive industry is a feature of all developing welfare states. This is considered necessary because it leads to welfare without exploitation of workmen and makes the production of material goods and services cheaper by eliminating profits. Government and local authorities act as individuals do and the policy of the Act is to put Government and local authorities on a par with private individuals. But Government cannot be regarded as an employer within the Act if the operations are governmental or administrative in character. The local authorities also cannot be regarded as industry unless they produce material goods or render material services and do not share by delegation in governmental functions or functions incidental thereto. There is no essential difference between educational institutions run by municipalities and those run by universities. And yet a distinction is sought to be made on the dichotomy of regal and municipal functions. Therefore, the word 'undertaking' must be denned as 'any business or any work or project which one engages in or attempts as an enterprise analogous to business or trade'. This is the test laid down in D. N. Banerjee v. P. R. Mukherjee and followed in Baroda Borough Municipality v. Its Workmen . Its extension in the Corporation case was
unfortunate and contradicted the earlier cases.
13. It will thus be seen that this Octroi Department not only does not produce material goods, nor render material services but only shares by delegation in the governmental functions, namely, imposing, collecting and levying the octroi tax and as such, the activities of the Octroi Department cannot be held to amount to an "industry". In view of this, we are of opinion that the Octroi Department of which the petitioners are the employees cannot be held to be an "industry" and as such, the provisions of the Industrial Disputes Act, and particularly those of Section 25F thereof, cannot be made applicable to the present employer. Therefore, there was no need for the respondent Municipal Council to follow the procedure laid down in Section 25F(b) of the Industrial Disputes Act and the non-payment of the retrenchment compensation provided therein does not make the termination or the retrenchment invalid. The petitioners have been given a proper notice and there is no infirmity on that account.
14. Mr. H.W. Dhabe, the learned Counsel on behalf of the respondent Municipal Council had raised certain preliminary objections, but in the view we have taken on the merits of the case, we do not think it necessary to go into the preliminary objections raised by him.
15. In the result, the rule is discharged. The stay order passed in this case earlier stands vacated. In the circumstances of the case, we make no order as to costs.