The Workmen of Western India Match Co.
Ltd. Vs. The Western India Match Co. Ltd.  INSC 134 (11 April 1962)
11/04/1962 MUDHOLKAR, J.R.
CITATION: 1966 AIR 976 1963 SCR (2) 27
RF 1968 SC 585 (8) RF 1972 SC 343 (10)
Industrial Dispute--Scale of pay--Condition
of service --Dearness allowance--Employees of sales office and factory, if
could be equated--Earlier settlement--Termination of-Charter of demand, if
could be treated as notice of termination of previous settlement--Industrial
Disputes Act, 1947(14 of 1947), s. 19(2).
R the respondent company has got a factory,
with an office attached thereto, in Alambazar a suburb of Calcutta and also has
its sales office in the commercial area of Calcutta.
Without first giving a formal notice under s.
19(2) of the industrial Disputes Act, terminating an earlier settlement, the
Union made fresh demands, contained in a charter of demands, inter alia for the
enhancement of dearness allowance, alteration of the basis of computing it and
the revision of pay scale alleging that what they get is much below what
corresponding employees at the sales office get and that the present rates are
inadequate in view of the rise in cost of living The dispute relating to
dearness allowance alone was first referred to the Tribunal but later the
dispute relating to grades and scale of pay was also referred to the same
The Tribunal after overruling the preliminary
objection of the company that it had no Jurisdiction to proceed with the
reference because no notice terminating the settlement as contemplated by s.
19(2) of the Act was given by the workmen, found that the employees were not
entitled to higher dearness allowance or to the alteration of the basis of
computation of the dearness allowance, but there has been a change in the
circumstances which justified a revision of the scale of pay.
Held, (1) that when during the pendency of
negotiations the Union by a letter had asked the company to treat the charter
of demand as a notice under s. 19(2) of the Act without first terminating an
earlier settlement under an award and the company had agreed to refer the
matter in dispute 28 to the adjudication of a tribunal, the question of a
formal notice under s. 19(2) of the Act was immaterial, for the presentation of
the charter of demand followed by the letter amounted to a notice of
termination of settlement.
(2) that the members of a Union like the one
of employees of the irresponsible’s factory have bank dealt with by the company
on a different footing from the employees of a sales office in Calcutta, the
former being employees of an engineering concern and the latter of a mercantile
one, who are governed by the recommendation of the Bengal Chamber of Commerce
and, therefore, the case of the factory employees cannot be equated with that
of the sales office employees.
The factory employees cannot, as of right,
demand that the benefit of the rates fixed by the Bengal Chamber of Commerce be
also given to them, because the rates were not intended to be applied to them.
Clerks of Calcutta Tramways v. Calcutta
Tramways Co. Ltd.
 S.C.R. 722, applied.
(3) that there is no valid reason for
compelling employers to offer uniform terms of employment to their employees
working in different establishments because various considerations must enter
into the question such as the value of their work to the employer, the
employer's ability to pay, the cost of living the availability of persons for
doing the particular kind of work and so on The action of an employers who does
not offer uniform condition of service to all its employees doing work which,
broadly speaking may be called similar, cannot be regarded as discriminatory or
a breach of any principle of industrial law.
(4) that the Industrial Tribunal in refusing
to extend to the employees of the respondent in the factory in Alambazar
benefit of dearness allowance formulated by the Bengal Chamber of Commerce has
not contravened any principle of natural justice or any important principle of
industrial law. Even assuming that an Industrial Tribunal has exercised its
discretion wrongly in not awarding uniform dearness allowance to all the
employees of the same employer working in different establishments, that is no
ground for interference under Art. 136.
State, of Madhya Pradesh v. G. C. Manager
 S.C.R. and Bengal Chemical & Pharmaceutical Works Ltd. Calcutta V.
Their Workmen,  S. C. R. 136, ralied
on, 29 (5) that an award of an Industrial Tribunal cannot ordinarily be revised
unless there is a circumstances ; but here, there has been a change of
circumstances because cost of living has admittedly gone up since then. This is
so notorious a fact that court is entitled to take notice of it. The object of
awarding dearness allowance is to neutralise, at least partially, the issue in
the cost of living and in the circumstances the factory employees are entitled
to have the old basis revised.
Burn& Co. Ltd. v. Their Workmen, 19561
S.C. R. 781, referred to.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
429 of 1961.
Appeal by special leave from the Award dated
September 16, 1958, of the Fourth Industrial Tribunal, West Bengal, in Cases
Nos. VIII-II of 1958.
N. C. Chatterjee, A. N. Sinha and Dipak Dutta
Choudhri for the Appellants.
C. K. Daphtary, Solicitor-General of India,
B. Sen and B. N. Ghosh for the respondent.
1962. April 11. The Judgment of the Court was
delivered by MUDHOLKAR, J.-This is an appeal by special leave against an award
made by the court of Industrial-Tribunal, West Bengal, Calcutta.
The relevant facts are these : The Western
India Match Co., (respondent) has got a factory with an office attached thereto
in Alambazar, which is a suburb of Calcutta. It has also got a sales office at
Calcutta which is situate in the commercial area. Certain disputes arose
between the factory employees and the respondent, pursuant upon the
presentation of a charter of demands by them to the respondent on January 25,
1957. These demands were seven in number. The demands included enhancement of
the dearness allowance and alteration of the basis of computing it. They 30
also included a demand for the revision of pay scales. The respondent was
unwilling to concede the demands and thereupon the appellant-union approached
the Labour Commissioner, West Bengal. Apparently on his suggestion certain
conferences were thereafter held between the parties and the Conciliation
Officer with a view to arrive at a settlement. During those conferences
certain. counter proposals were put forward by the respondent but they were not
accepted by the union. Eventually the Government of West Bengal by its order
dated January 14, 1958 referred the dispute relating to the dearness allowance
alone to the Fourth Industrial Tribunal at Calcutta but not the other disputes.
Conciliation proceedings regarding other disputes were resumed after the
aforesaid reference was made and on May 23, 1958 a settlement was reached
between the Union and the respondent on all issues excepting the one relating
to grades and scales of pay. It was agreed that this issue be referred for
adjudication to the same tribunal which was dealing with the question of
dearness allowance Upon this the Government of West Bengal referred that issue
to the Fourth Industrial Tribunal, West Bengal by order dated June 3,1958.
Before dealing with the contentions of the
parties it would be desirable to set out some more facts. The Western India
Match Co., has got factories not only at Alambazar but also at Bareilley in
Uttar Pradesh Ambernath in Maharashtra, Tiruvottiyur in Madras and at Port
Blair. The Factory at Alambazar was established in the year 1930. Besides these
factories the respondent maintains separate sales offices at various places in
India to push sales and execute orders.
One of such sales offices is located in the
city of Calcutta.
At the time of the reference 1, 866 persons
were employed in the factory at Alambazar. Out 31 of them 1,504 were
daily-rated or piece-rated employees and the remaining 362 were monthly-rated
employees. Amongst them 27 were officers, 67 clerks and 32 supervisors. The
rest were bearers, watchmen, malis, fitters etc. Apart from the officers all
the monthly-rated employees admittedly Fall within the definition of workers
under the factories Act.
In the year 1946 a union called the Wimco
Mazdoor Union was formed comprising only of the daily-rated and piece-rated
workers. This union was given recognition by the respondent. In the year 1950
another union called the Wimco Employees, Union comprising solely of the
monthly-rated employees, other than officers, was formed and was duly
recognised by the respondent. One of the conditions under which the recognition
was given was that its membership should consist only of monthly-rated employees
of the factory except the officers.
Shortly after the recognition of this Union
it entered into an agreement with the management of the respondent company
whereby the scales of pay, dearness allowance and various conditions of service
of the monthly paid employees at Alambazar factory were settled. The date of
this agreement is September 29,1951.
Certain disputes arose between the Union and
'the respondent in the year 1954 which were referred by the Government of West
Bengal by its order dated September 1, 1954 to the Second Industrial Tribunal,
West Bengal, for adjudication.
In the course of the proceedings, however, an
agreement was reached between the appellant-union and the respondent on April
29, 1955. Eventually on September 15, 1955 an award made in pursuance of the
settlement arrived at was published in the Calcutta Gazette. It may be
mentioned that the 32 settlement related to various matters relating to the
conditions of service of employees including pay and dearness allowance.
Further, under this agreement the production bonus which the monthly rated
workmen received was merged in their basic pay. The aforesaid award was
terminable upon giving two months' notice commencing after December 31, 1956.
Without giving a formal notice terminating the agreement the appellant-union
made fresh demands on January 25, 1957 pertaining to the same matters which
were covered by th at agreement.
What happened thereafter has already been
indicated by us above.
The main ground on which the appellant union
sought revision of the previous award and the alteration of the basis of
computation of the dearness allowance and alteration of the scales of pay is
that what the respondent is paying to the factory employees works out to
something very much below what corresponding employees at the sales office get.
This, they say, is unfair. The second ground on which their claim with respect
to these two matters is based is that other com. parable concerns give better
terms to their employees than the respondent. The third is that the present
rates are inadequate in view of the rise in cost of living and the fourth, that
the respondent in making large profits and can easily afford an upward revision
in dearness allowance and scales of pay.
On behalf of the respondent a preliminary
objection was taken to the effect that the tribunal had no jurisdiction to
proceed with the reference because no notice terminating the settlement as
contemplated by s. 19, sub-s. 2 of the Industrial Disputes Act, 1947 was given
by the appellant.
On merits its contentions were 33 (1) that
the conditions of service of employees of the sales office are different from
those working in the factory;
(2) that there has been no material change of
circumstances since the making of the previous award justifying any revision of
the scales on the lines suggested;
(3) that the conditions of service to scales
of pay and dearness allowance prevailing in the factory at Alambazar are as
good, if no better, than those of employees of other concerns such as Bridge
&. Roof Co., Imperial Chemical Industries, Hindusthan Lever and Marshall
& Sons which. are in fact much larger concerns and cannot be compared with
(4) that the respondent has not the capacity
to pay higher dearness allowance to its monthly-rated employees in the factory,
due to increase in the cost of production, labour charges, enhancement of
excise duty and keen competition of the products which have together resulted
in reducing the percentage of profits.
The preliminary objection was overruled by
It, however, bold that the employees at the
factory were not entitled to a higher dearness allowance or to the alteration
of the basis of computation of the dearness allowance but that there has been a
chanae in the circumstances which justified a revision in the scales of pay.
The Tribunal accepted the contention and adopted the revised scales of pay
offered by the respondent-company to the appellant-union daring the
conciliation proceedings Mr. B. Sen for the respondent-company reiterates the
objection based on s. 19 (2) of the Industrial Disputes Act 1947. That
provision is to the 34 effect that a settlement arrived at between the employer
and the employees shall be binding for such period as is agreed upon by them
and if no such period is agreed upon for a period of six months from the date
of the settlement and shall continue to be binding on them after expiry of that
period until the expiry of two months from the date on which a notice in
writing of his intention to terminate the settlement is given by one of the
parties to the other party. Unquestionably the parties had arrived at a
settlement on April 29, relating, amongst other things, to dearness allowance
and the scales of pay and no formal notice as contemplated by sub. s. (2) of s.
19 was given.
In our opinion, however, it is not open to
the respondent company to raise this contention in so far as revision of Pay
scales is concerned because in the memorandum of settlement May 23, 1958 signed
by the representatives of the parties to this appeal it is clearly provided
that the revision of scales of pay be referred for adjudication to the same
Industrial Tribunal which was dealing with the question of dearness allowance.
Besides, that, this memorandum contains the following recital:
"Parties were met jointly on several
occasions as a result of which the entire dispute, except the issues of (1)
Dearness allowance (which has already been referred to the Fourth Industrial
Tribunal for adjudication) and (2) Revision of scales of pay, has been settled
on the following terms;..........." This recital shows that the respondent
was agreeable to refer to the Tribunal not only the issue relates to revision
of pay scales but also that dealing with dearness allowance. Further, in para
37 of its written statement the respondent-company clearly accepted the'
position that the Tribunal had jurisdiction to deal with the issue of dearness
allowance. This circumstance precludes the respondent from 35 now objecting to
the jurisdiction of the Tribunal, Apart from that we may point out that in its
reply dated March 29, 1957 to the charter of demands sent on behalf of the
appellant-union it was stated that the previous settlement had not been validly
terminated and in answer to that the General Secretary of the Union wrote on April
8,1957 saying that various representations made by the union to the respondent
and the presentation of the charter of demands amounts to a notice of
termination of the settlement. Thus, though no formal notice under s. 19(2) was
given this letter can itself be construed as notice within the meaning of that
provision. It may be noted that the representation was made long after the
expiry of two months from this date. For these reasons we overrule the
contention of Mr. Sen. Now, coming to the merits, the main point urged by Mr. Chatterjee
on behalf of the union is that there has been discrimination between the
employees of the respondent in the Alambazar factory and their counterparts in
the sales office in Calcutta. According to him even though these per.
sons do the same kind of work they are given
different grades and scales of pay and different scales of dearness allowance.
He contends that the employees of the same employer doing the same kind of work
in the same city ought not to be differentiated in this manner and that
decision of the Tribunal denied the members of the appellant-union equality
with their counterparts in the sales office and is contrary to the principles
of industrial law we may, however, point out that the appellant-union claimed party
with-the sales office employees only in the matter of dearness allowance and
have referred to the existence of different pay scales in the sales office only
in support of their claim for an upward revision of the present pay scales. It
is, therefore, not open to learned counsel now to urge that the pay scales also
36 should be same for the factory employees as for the sales office employees.
We shall, therefore, consider the argument based on the ground of unwarranted
discrimination only in so far as it relates to the question of dearness
For considering this argument it is desirable
to bear in mind the history of industrial adjudication in Bengal and also the
precise reason why a different basis for computing dearness allowance is
applied to the respondent employees in the sales office from that applied to
its factory employees.
Towards the end of the year 1945 the Bengal
Chamber of Commerce made an enquiry as to the cost of living of the clerical
staff employed in mercantile firms in the city of Calcutta. On the basis of
that enquiry it fixed a certain amount as dearness allowance for these
employees. It also fixed for the employees what it called the middle class cost
of living index and recommended acceptance of its findings to its constituent
members. Mr. Sen stated that the respondent's sales office is a member of the
Bengal Chamber of Commerce but its factory in Alambazar is not a member of the
Chamber of Commerce and this was not controverted by Mr. Chatterjee.
In the year 1948 disputes arose between the
employees and employers of engineering firms in Calcutta as well as employees
and employers of mercantile concerns in Calcutta.
These disputes were referred to separate
Industrial Tribunals. The first Engineering Tribunal was appointed on July 3,
1948 to which disputes relating to 119 companies, including the respondents
factory, were referred. The award made by it was eventually published in the
Calcutta Gazette and effect was given to it. Further disputes arose between
some engineering concerns and their employees. These were referred to a second
Engineering Tribunal on August 31, 1950 37 and effect was given to its award.
It would, there. 'fore, appear that members of a union like the one of
employees of the respondent's factory at Alambazar have been dealt with on a
different footing from the employees of a sales office in Calcutta, the former
being employees of an engineering concern and the latter of a mercantile one.
It was, however, contended before us that they are not two independent
undertakings but parts of the same one, that is, Western India Match Co., and,
therefore, in the matter of payment of dearness allowance at least they should
be dealt with on the same footing.
As we have already pointed out the employees
in the sales office are governed by the recommendations of the Bengal Chamber
of Commerce which .the respondent was more or less bound to accept to be in
line with other similar establishments and, therefore, the case of the factory
employees cannot be equated with that of the sales office employees. In Clerks
of Calcutta Tramways v. Calcutta Railways Co. Ltd.(1) the clerical staff of the
Calcutta Tramways claimed that since they belonged to the middle class they
should be paid dearness allowance on the basis of the finding of the Bengal
Chamber of Commerce. Their plea was negatived by this Court on the ground that
in the matter of grant of dearness allowance no hard and fast rule is applicable
to all kinds of employees, that there are different grades amongst middle
classes and the clerical staff of the Calcutta Tramways cannot claim to be
awarded dearness allowance at the rates fixed by the Bengal Chamber of Commerce
for mercantile firms. It may further be pointed out that the factory employees
cannot all claim to belong to the middle class because admittedly two-thirds of
them belong to what is known as the subordinate staff.
It may be that the clerical staff both in
Calcutta proper and, in Alambazar does work which (1)  S.C.R. 772.
38 one set of clerks does is not the same as
that of the other set. Clerks in the factories have to do work in connection
with the manufacturing processes in the factory, the labour employed in the
factory, raw materials arriving in the factory, the finished products of the factory
and so on and so forth. The work which the clerical staff in the sales office
has to do is connected with the marketing of the finished product, dealing with
other firms, carrying. on correspondence with the head office and other units
and so on and so forth. There is no identity in the work of the two sets of
clerical staff though there may be similarity.
It is said that the work they do carries more
responsibility. That may or may not be so but clearly 'if the work each set of
employees does is hot identical, it would be open to the employer to place
different values on them. The same thing could be said about the work of the
subordinate staff. If under these circumstances the respondent agreed to adopt
a different mode .of computation of dearness allowance in respect of the
employees in the sales office from that offered by it to the employees in the
factory, could it be said that the respondent was making invidious distinction?
The sales office being a mercantile office the respondent bad to fall in line
with other similar establishments and pay to the employees in the sales office
the same dearness allowance as other mercantile firms were paying to their
employees. In the circumstances the factory employees cannot as of right demand
that the benefit of the rates fixed by the Bengal Chamber of Commerce be also
given to them though those rates were not intended to be applied to them.
Moreover it has to be borne in mind that in
the previous settlement the appellant-union was content to accept, the working
class cost of living index as the basis for determining their dearness 39
allowance and even in their present demands they have alternatively suggested
that the same be adopted with certain variations in the rates in three slabs.
It is true that the employees in Alambazar as
well as in Calcutta are living within the limits of the Corporation of
Calcutta. But that circumstance though relevant is not by itself sufficient to
justify payment to them of the same rate of dearness allowance as the sales office
We cannot ignore the fact that the employees
of other factories situate in that area are not paid dearness allowance at the
rates formulated by the Bengal Chamber of Commerce and, therefore, if those
rates are adopted by the respondent with respect to the factory employees the
existing industrial peace in that region may be destroyed.
The tribunal must, therefore, be said to have
exercised its discretion properly in not acceding to the appellant's demand in
We may also point out that the employees in
the factory have been recruited on terms and conditions which from the
beginning are different from those that govern the sales office employees. It
is not disputed that certain benefits such as those relating to rations, free quarters,
gratuity etc., which are extended to the factory employees are not extended to
the sales office employees. What is said, however, is that the sum total of
these considered along with the pay and dearness allowance of the factory
employees still place them at a disadvantage as compared to the sales office
employees. It is true that the sales office employees are, by and large. in a
comparatively better position; but that again is due to the fact that
recruitments in the two establishments have all along been made on different
terms and conditions.
We do not think that there is any valid
reason for compelling employers to offer uniform terms of 40 employment to
their employees working in different establishments because various
considerations must enter into the question such as the value of their work to
the employer, the employer's ability to pay, the cost of living, the
availability of persons for doing the particular kind of work and so on.
Indeed, the Minimum Wages Act itself proceeds on the basis that the employer
has large discretion in so fax as the most important condition of service is
concerned, that is, pay, so long at it is not below the minimum wage
prescribed. It is a well known fact that the highest employer, the State, does
not offer uniform conditions of service to all employees doing work which,
broadly speaking, may be called similar. Thus to take one illustration, the
clerical staff and the menial staff-now called class IV staff-employed in the
Secretariat are governed by terms and conditions of service different from
those prevailing in other offices such as those under the Delhi Administration.
High powered Pay Commissions have not regarded this as discriminatory treatment
or breach of a principle of industrial law. In the State of Madhya Pradesh v.
G.C. Mandawar (1) it was contended on behalf of the clerical staff in the State
of Madhya Pradesh that they should be paid dearness allowance at the same rate
as the Central Government employees posted in Madhya .Pradesh on the ground that
they were doing similar work at the same place. Their contention was, however,
rejected by this Court.
Looking at the matter thus we cannot say that
the Industrial Tribunal in refusing to extend to the employees of the
respondent in the factory in Alambazar the benefit of dearness allowance
formulated by the Bengal Chamber of Commerce has contravened any principle of
natural justice or any important principle of industrial law. In this
connection we (1) (1955) 1 S.C.R. 599.
41 may refer to the decision in Bengal
Chemical & Pharmaceutical Works Ltd., Calcutta v. Their Workmen (1) where
Gajendragadkar, J., who spoke for the Court observed:
"Though Article 136 is couched in widest
terms, it is necessary for this Court to exercise its discretionary jurisdiction
only in cases where awards are made in violation of principles of natural
justice, causing substantial and grave injustice to parties or raises an
important principle of industrial law requiring elucidation and final decision
by this Court or discloses such other exceptional or special circumstances
which merit the consideration of this Court." Therefore, even assuming
that an Industrial Tribunal has exercised its discretion wrongly in not
awarding uniform dearness allowance to all the employees of the same employer
but who are working. in different establishments, that is no ground for
interference under Art. 136.
The second ground on Which the 'tribunal's
decision regarding dearness allowance is challenged is that even at the stage
of giving evidence Mr. Was mouth, the General Manager of the respondent said
that the respondent still sticks to the offer regarding dearness allowance but
despite 'that the Tribunal did not make any change in the dearness allowance.
It is contended on the basis of this stand of Mr. Was mouth that the respondent
accepted the position that there was scope for raising the dearness allowance.
In answer to this argument Mr. B. Sen urged that the offer which the company
had made was a package deal but since the appellant-union was not willing to
accept the whole of the respondents offer, the Tribunal was right in not
granting any increase in the dearness allowance. We may point out, however,
that the (1) (1959) Supp. 2 S.C.R. 136,140.
42 only outstanding questions between the
parties were two-one relating to the dearness allowance and the other relating
to the scales of pay. A comparative chart showing the union's demand and the
company's offer of the existing scales of pay, dearness allowance,
superannuation, casual leave, sick leave and over-time has been placed on
record and is annexure G.I. We are not concerned with matters other than the
first two and we, therefore, reproduce below only that portion of the chart
which relates to the first two of these matters:
Union's demand Company's offer RS. Rs. 1.
Grade & A 1 35/118/-65/(30yrs.) 30/1/4/ 50--EB-1/4/55/scales of A 2 40/2/8/90/"
35/1/4/55-EB-1/4/60/pay A 3 60/3/8/130/" 60/2/0/80/ B 1 65/5/0/115/-EB-7/55/-4/0/95/EB-5/125/,
185/(20 yrs.) no offer C 1 75/6/0/135/.EB-8/70/5/8/-125/EB-7/ 215/(20 yrs.)
167/-EB-195/C 2 95/8/0/-175/-BB-12/. 85/-7/81-160/EB-10)295/-(20 yrs.)
220/.EB-10/-260/C 3 120/12/0/240/-EB18/110/-10/-210/ EB-16/. 420/-(20 yrs.)
3061-EB-16/-370/C 4 Upto a limit of Rs. 650/Upto a limit of Rs. 500/43 A. As
per sales office
2. Dear Employees No offer ness on allowance
B. Rs. Rs. 1 to 50/-basic 125% 1 to 25/basis 125%** 51 to 100 " 25% 26 to
50 " 40% 101 to 160 " 17% 51 to 150 " 30% 151 to 200 " 12%
151 to 200 " 12% 201 to 250 " 7% 201 to 250 " 7% 251 to 300
" 5% 251 to 300 " 5% In addition 3% for In addition 3% for every 5
pts. rise every 5 pts. rise or fail of work or fail of working class indexing
class index figure. figure.
**Adjusting the existing R. B. with this
It will be clear from this that the union had
made alternative demands in respect of dearness allowance, one was that the
same scale as that for sales office employees should be adopted and the other
was variation in three slabs of the present scheme accepting as the basis the
working class cost of living index figure. The company refused to make any
counter-offer with regard to the primary demand of the appellant-union. But in
regard to the alternative demand it made a counter-offer. If we understand Mr.
Was mouth right the respondent company stood
by its counteroffer based on the working class cost of living index figures
before the Tribunal even though the 44 conciliation proceedings broke down.
During these proceedings this counter-offer was linked with the counteroffer
pertaining to grades and scales of pay.
Presumably, therefore, the company regarded
the package deal not merely as a concession made for putting an end to disputes
but also because it regarded it as fair and the financial commitment entailed
by it to be within its means.
No doubt in the evidence Mr. Was mouth has
said that the respondent-company does not stick to its offer relating to grades
and scales of pay. But that would not render what was a fair and reasonable
offer during the stage of negotiations, no longer fair and reasonable or
The Tribunal has revised the pay scares on
basis of the respondent's offer. If, therefore, dearness allowance is revised
on the basis of the respondent's offer what would in effect be done would be
only that which the respondent company during the conciliation proceedings had
itself offered to do, a thing which was considered to be fair and reasonable
and also necessary. In these circumstances we find it difficult to understand
the principle on which the Tribunal proceeded in refusing to revise the scales
of dearness allowance on the basis of the respondent-company's offer.
Though, therefore, we reject the contention
of the appellant-union that the dearness allowance should be fixed on the same
basis as that obtaining in the sales office we think that in view of the stand
taken by the respondent company throughout the proceeding& dearness
allowance should be revised in accordance with the company's offer. The fact
that it made such an offer is indicative of two things : the necessity and
propriety of revision of the dearness allowance as well as the ability of the
respondent-company to pay higher dearness allowance. It was no doubt contended
45 before us that the offer was made during negotiations and was without
prejudice and we should therefore, keep it out of our mind. But we cannot
overlook the fact that Mr. Was mouth stuck to that offer even after the
conciliation proceedings had ended infructuously and thus in effect revived the
Mr. Sen, however, argued that on the basis of
the decision in Bun & Co. Ltd., v. Their Employees (1) that an award of
industrial Tribunal cannot be reopened unless it is established that there has
been a change in the circumstances on the award is based and that since there
has been no such change the award of' 1955 pertaining to dearness allowance
ought not to be revised. It is true that an award cannot ordinarily be revised
unless there is a change of circumstances. But here, there has been a change of
circumstances because cost of living has admittedly gone up since then. This is
so notorious a fact that we are entitled to take notice of it. The object of
awarding dearness allowance is to neutralise, at least partially, the rise in
the cost of living, and in the circumstances the factory employees are entitled
to say that the old basis needs to be revised. There is thus no substance in
Mr. Sen's argument.
On the question of the grades and scales of pay
the contention of learned counsel is that the Tribunal has not applied its mind
to the question but ha,; mechanically accepted the respondent's offer. This
statement is not wholly accurate, No doubt the Tribunal has accepted as
reasonable, the offer which the respondent has made ; but it has given reasons
for doing so. In its award the Tribunal has stated "The principal point
made in support of the demand is that the grades and scales of pay are too
short and that they should be (1)  S,C,R. 781.
46 extended with such modifications as may
appear necessary in the circumstances of the case. " Then after comparing
the existing grades with the company's offer the Tribunal observed:
"It would appear at a glance at this
chart that the existing rates provide for scales of pay in the case of six
grades upto 16 years and in the case of one it provides for ten years only. The
Union's demand is for extending the scales upto 20 years in place of ten and
sixteen years, and both the minimum and maximum limit of the scales of pay
would be raised in all cases. The Company's offer except in the case of grade
B(1) if much in advance of the existing grades and scales of pay. There are
good justifications for revision of the grades and scales of pay, and the
Company's offer, in my opinion, should have been accepted by the Union. The revision of the grades and scales of pay as in the Company's offer will, to a
great extent, remove the hardships of the employees, who, for the present, must
remain satisfied with such revision.
It has, therefore, applied its mind to the
company's offer and also borne in mind the demand made by the union. Upon
consideration of these matters the Tribunal came to the Conclusion that the
company's offer is a reasonable one.
Its finding in this regard is one of fact and
cannot be permitted to be challenged in an appeal under Art. 136.
In this view we allow the appeal partly and
direct that the award be modified by providing for a revision of the dearness
allowance on the basis of the company's offer.
Subject to this modification, the appeal
will, be dismissed.
In view of the partial success of the parties
we make no order as to costs.
Appeal allowed in part.