The Bijay Cotton Mills Ltd. Vs. Their
Workmen & ANR  INSC 23 (12 February 1960)
GUPTA, K.C. DAS
CITATION: 1960 AIR 692 1960 SCR (2) 982
CITATOR INFO :
R 1960 SC 812 (5) APL 1962 SC1263 (9)
Industrial Dispute-Minimum basic wage fixed
by Tribunal- Modification by Labour Appellate Tribunal according to statutory
notification issued two years after the award-If valid--Appropriate
Government-Industrial Disputes Act, 1947, (14 of 1947), industrial (Development
and Regulations) Act. 1951 (65 of 1951). S. 2(a)(i).
On the refusal of the appellant-employer to
fix the minimum wages and rates for contract work of the workmen-respondents
who alleged that they were paid below the level of bare subsistence wage, the
dispute was referred to the Industrial Tribunal for adjudication. The first
Tribunal could not fix any minimum basic wage and the award of the second
Tribunal which fixed a scale was set aside on the ground that the appointment of
the Tribunal was not published according to law. The third Tribunal ultimately
fixed the basic minimum wage on the industry-cum-region basis after considering
the rates prevalent in various parts of the country and a place nearest to the
appellant company. The minimum awarded by the Tribunal was slightly increased
by the Labour Appellate Tribunal in accordance with a statutory notification
issued under ,the Minimum Wages Act, 1948 (XI of 1948), which had come into
force after two years of the award of the Tribunal and by which a scale of
minimum wage and dearness allowance was fixed. On appeal by the appellant
company by special leave.
Held, that the Labour Appellate Tribunal
committed no error of law in awarding the same minimum basic wage which was
statutorily fixed and which came into force only two years after the award of
In determining the minimum basic wage the
fact that a large amount of dearness allowance was paid to the employees in
other comparable occupations in the same region should not be ignored.
In order that the Central Government might
itself become the appropriate Government within the meaning Of S. 2(a)(i) of
the Industrial (Development and Regulation) Act, 1951, (65 of I 95 1) it must
specify in that behalf that the industry in question was a controlled industry.
If the services of one Tribunal were not
available to the appropriate Government it was perfectly competent to that
Government to appoint another Tribunal to take up the work of adjudication.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 355 of 1958.
Appeal by special leave from the decision
dated December 12, 1956, of the Labour Appellate Tribunal 983 of India, Bombay
in Appeal (Bom.) Nos. 77and 103 of 1956.
A. V. Viswanatha Sastri, S. N. Andley, J. B.
Dadachanji and Rameshwar Nath for the appellant. B. D. Sharma, for respondent
1960. February, 12. The Judgment of the Court
was delivered by GAJENDRAGADKAR, J.-The industrial dispute between the Bijay
Cotton Mills Ltd., (hereinafter called the appellant) and their workmen
(hereinafter called the respondents) which has given rise to this appeal by
special leave has gone through a protracted and tortuous course. The
respondents claimed that the scale of minimum wages and rates for contract
works should be fixed for them because it was alleged that the payments made by
the appellant were below the level of the bare subsistence wage. The appellant
did not accede to the demand thus made by the respondents, and so on December
1, 1950, the-present dispute was referred for adjudication to the Industrial
Tribunal consisting of Mr. D. N. Roy, under s. 10(1) read with s. 12(5) of the
Industrial Disputes Act, 1947 (Act XIV of 1947) (hereinafter called the Act).
Amongst the items thus referred for adjudication, the first two were (1) that
the mill employees be paid minimum wages and rates for contract works as shown
in the two statements enclosed, and (2) that dearness allowance be paid to all
workers at the rate of. Rs. 35 permensem each and it may be increased or decreased
according to rise or fall in prices. In the present appeal we are concerned
with the minimum wages.
It appears that Mr. Roy found himself unable
to fix any basic minimum wage, and to support his view, that it would be
inexpedient to fix any minimum basic wage in the proceedings pending before
him, he referred to the fact that the question of fixation of the basic wage
had been rendered enormously difficult by the state of industrial development
in the State of Ajmer and by the unsteady and frequent fluctuations in prices.
Even so be considered several items of dispute referred to him and announced
his award on October 5, 1951.
125 984 This award was challenged by the
respondents before the Labour Appellate Tribunal. The appellate tribunal there
upon remanded the matter to Mr. Roy with a direction that the issues as to the
basic wage and as to dearness allowance should be specifically determined and
appropriate directions issued on those two items. This remand order was passed
on October 20, 1952.
By the time the proceedings were taken up
before the tribunal on remand, Mr. Roy was not available because he had ceased
to be a District Judge in Ajmer. In his place Mr.
Sharma was appointed. Mr. Sharma then made
his award on September 8, 1953. He fixed Rs. 25 as basic wage and Rs. 10 as
minimum dearness allowance. It appears that the award thus made by Mr. Sharma
was subsequently quashed on the ground that his appointment had not been duly
published as required by the Act. This order was passed on May 25, 1955.
Mr. C. Jacob was then appointed Industrial
Tribunal. He made his award on January 25, 1956. By this award Mr. Jacob in
substance agreed with the view taken by Mr. Sharma and fixed the basic wage at
Rs. 25 per mensem and the minimum dearness allowance at Rs. 10 per mensem. This
award was directed to come into operation as from December 1, 1950. This award
was again challenged before the Labour Appellate Tribunal and the appellate
tribunal has partly allowed the appeal preferred by the respondents and increased
the basic wage from Rs. 25 per mensem to Rs. 30 per mensem. The amount of the
minimum dearness allowance has been affirmed at Rs. 10 permensem. This decision
was announced by the appellate tribunal on December 12, 1956. It is this
decision that has given rise to the present appeal by special leave.
It is common ground that a Statutory
Committee was appointed under Minimum Wages Act, 1948 (Act XI of 1948) in
respect of Ajmer on January 17, 1952. Its report was submitted on October 4,
1952, and a notification was issued in pursuance of the said report on' October
7, 1952. This notification has come into force as from January 8, 1953, and in
985 consequence the basic minimum wage is now statutorily fixed at Rs. 30 per
mensem and dearness allowance at Rs. 26 per mensem. Thus it would be clear that
there is no dispute between the parties as to what would be the basic wage and
the minimum dearness allowance subsequent to January 8, 1953.
It appears that Mr. Jacob who fixed the basic
minimum wage at Rs. 25 per mensem relied upon the fact that the said rate
represented the basic minimum wage on the industry-cum- region basis. He has
observed that the basic minimum wage of an unskilled worker in the textile
mills in Bombay was Rs. 30 per mensem, while at other places it varies from Rs.
22 to Rs. 30 per mensem. Then he has also referred to the two charts, Exhibits
4-A and 4-B, produced by the respondents where the minimum basic wages were
shown to range between Rs. 21 to Rs. 30 in Rajasthan. According to him, in
Rajasthan minimum basic wages were Rs. 26 per mensem and in Beawar which is the
nearest centre from Bijaynagar the minimum wages for an unskilled textile
worker in 1950 were Rs. 25 per mensem. That is one fact on which the tribunal
relied. The other fact on which reliance was placed was that there was an
agreement between the parties in December 1949, under which the respondents
were willing to work on the minimum wage of Rs. 27. In fact it appears that
both the appellant and the respondents had moved this Court for striking down
the notification issued by the Ajmer Government by which the basic wage had
been fixed at Rs. 30 from January 8, 1953. In Bijay Cotton Mills Ltd. v. The
State of Ajmer (1) it was urged on their behalf jointly that the relevant provisions
of the Minimum Wages Act were ultra vires and that it would be in the interests
of the employer and the employees as well to strike down the impugned
notification. This Court rejected the said contention and upheld the validity
of' the Act as well as of the notification. That, however, is another matter.
The agreement on which the respondents were prepared to work for the appellant
was pressed into service by the appellant before the tribunal. The tribunal was
(1) 1 S.C.R. 752.
986 influenced by that fact in finally
determining the amount of basic wage. Two other facts may also have weighed.
The appellant started its textile business in
940 and had to face a serious calamity in 1943, as a result of which it
suffered great loss and incurred liability to the tune of nearly rupees thirty
lakhs. Besides, it was urged before the tribunal that a large section of the
respondents belonged to the agricultural class and they can supplement their
income from agricultural sources. It is presumably on these grounds that Mr.
Jacob fixed the basic wage at Rs. 25 per mensem.
The Labour Appellate Tribunal, on the other
hand, has held that, in the absence of satisfactory evidence on the record, the
statutory notification issued under the Minimum Wages Act affords " the
best and safest guide in the matter of fixation of minimum wage ". It has
observed that even though the notification can have no application prior to
January 8, 1953, still " they were of opinion that the scales of wages
fixed there under should not be departed from even for the period now in
question. That was all the more so because not much useful material was
available on the record to fix . the said wage ". It is on this ground
that the appellate tribunal has increased the basic wage from Rs. 25 to Rs. 30
as prescribed by the notification. It is this modification that is challenged
before us by Mr. A. V. Viswanatha Sastri on behalf of the appellant.
Mr. Sastri contends that the method adopted
by the tribunal was a scientific method; it took into account a basic wage
deducible on the industry-cum-region basis and this should not have been
reversed by the appellate tribunal. It, however, appears that in ascertaining
the wages which labour in comparable trades was getting in the relevant region,
the tribunal has completely lost sight of the fact that in addition to the
basic wages of Rs. 26/- Rs. 43/- was the average minimum dearness allowance
paid to the workers and that made a very large difference in the total earnings
of the workmen. In determining the minimum basic wage the fact that a large
amount of dearness allowance was being paid to employees in 987 other
comparable occupations in the same region should not have been ignored by the
tribunal, and that is one infirmity on which the appellate tribunal was
entitled to comment.
Besides, if the appellate tribunal thought
that more useful assistance can be derived from the statutory fixation of the
minimum wage in Ajmer under the Minimum Wages Act, we do not see how we can
interfere with the said view in the present appeal. It would not be wrong to
assume, as the appellate tribunal did, that in fixing the minimum wage in the
area, the Statutory Committee took into consideration all the relevant factors
and came to the conclusion that that would be a fair minimum to prescribe. On
the other hand, before the tribunal much relevant or useful evidence was not
adduced, and so the appellate tribunal could not be said to have committed any
error of law in preferring to rely on the statutory notification rather than on
the other -unsatisfactory evidence produced in the case. After all, from
January 8, 1953, the minimum basic wage was statutorily fixed, and so, if for a
couple of years before that date the same basic wage was awarded by the
appellate tribunal it cannot be said that any error of law has been committed,
which should be corrected by us in our jurisdiction under Art. 136 of the
Constitution. Therefore, we are not satisfied that any case for interference
has been made out by the appellant on this point.
The next contention raised by Mr. Sastri is
that the appointment of Mr. Jacob who made his award on January 25, 1956, was
invalid, and Mr. Sastri suggests that the said award as well as the decision of
the appellate tribunal should be set aside and the matter should be sent back
to Mr. Sharma for disposal in accordance with law. The argument is that Mr.
Sharma's appointment as Industrial Tribunal made on December 31, 1954, was
subsisting at the time when Mr. Jacob was appointed on June 17, 1955, and it is
urged that when the same industrial dispute had already been referred to Mr.
Sharma, it was not competent to the appropriate authority to refer the same
dispute to Mr.
Jacob. In support of this argument reliance
is placed on the decision of this Court in The 988 State of Bihar v. D. N.
Ganguly & Ors (1). In our opinion there is no substance in this argument.
The notification on which the whole of the argument is based was issued on
December 31, 1954, for the sole purpose of correcting the error which had crept
into the appointment of Mr. Sharma by reason of the fact that his earlier
appointment made on May 4, 1953, had not been duly published and notified as
required by the Act. Indeed, it was because of this infirmity that the award
made by Mr. Sharma on September 8, 1953, had been quashed on May 25, 1955. In
reading the later notification this fact must be borne in mind. No doubt the
notification' purports to refer to Mr. Sharma for his adjudication the matter
referred to him by the Labour Appellate Tribunal on remand; it, however,
appears as pointed out by the appellate tribunal that at the time when the
proceedings after the remand commenced Mr. Sharma's services were not
available, as he was apparently not in the service of the State, and it was
impossible to refer the matter to him for his adjudication. That is the finding
made by the appellate tribunal and this finding is fully justified. Therefore,
since Mr. Sharma's services were not available to the appropriate Government it
was perfectly competent to the said Government to fill in the vacancy and
appoint Mr. Jacob in his place to take up the work of adjudication. Therefore,
there is no substance in the contention that the decision of Mr. Jacob is
invalid in law.
The last contention urged is that the
reference is invalid inasmuch as the Chief Commissioner of Ajmer was not
competent to refer the present dispute for adjudication under s. 10(1) read
with s. 12(5) of the Act. The argument is that the Textile Industry has been
included at serial No. 23 in the First Schedule to the Industrial (Development
and Regulation) Act, 1951 (Act 65 of 1951) and as such the Chief Commissioner
of Ajmer was not the appropriate Government under s. 2(a)(i) of the Act. It is
urged that the present dispute could have been validly referred for
adjudication to the industrial tribunal only by the Central Government.
Section 2(a)(i) inter alia defines the (1)
 S.C.R. 1191.
989 appropriate Government as meaning, in
relation to any industrial dispute concerning any industry carried on by or
under the authority of the Central Government or by a railway company or
concerning any such controlled industry as may be specified in this behalf by
the Central Government, the Central Government. The question which arises is:
has the textile industry been specified as controlled industry in this behalf
by the Central Government ? It is true that the textile industry is controlled
by the provision,,,, of Act 65 of 1951 and in that sense it is controlled
industry; but that would not be enough to attract the application of s. 2(a)(i)
of the Act. What this latter provision requires is that the Central Government
must specify " in this behalf " that the industry in question is a
controlled industry ; in other words the specification must be made by the
Central Government by reference to, and for the purpose of, the provisions of
the Act in order that the Central Government may itself become the appropriate
Government qua such industry under s, 2(a)(i) of the Act.
It is conceded by Mr. Sastri that no such
specification has been made by the Central Government. Indeed, we ought to add
in fairness to Mr. Sastri that he did not very seriously press this point.
The result is the appeal fails and is
dismissed with costs.