Clerks of Calcutta Tramways Vs.
Calcutta Tramways Co. Ltd.  INSC 57 (11 October 1956)
MENON, P. GOVINDA BHAGWATI, NATWARLAL H.
AIYYAR, T.L. VENKATARAMA DAS, S.K.
CITATION: 1957 AIR 78 1956 SCR 772
allowance-Clerks-Middle class employees-Whether uniform rates to be
adopted-Decisions of Tribunals-Power of the Supreme Court to interfere.
It is well settled that the decisions of a
Tribunal on questions of fact are final and that the Supreme Court would
interfere only in cases where (1) the Tribunal acts in excess of the
jurisdiction conferred upon it under the statute or regulation creating it or
where it ostensibly fails to exercise a patent jurisdiction; (2) there is an
error apparent on the face of the decision; (3) the Tribunal has erroneously
applied well-accepted principles of jurisprudence.
The Bengal Chamber of Commerce of which the
respondent Company was a member, had made an investigation into the cost of
living index for the middle class families and, fixed the dearness allowance
payable to the employees of the mercantile firms in Calcutta. Before the
Industrial Tribunal as well as the Labour Appellate Tribunal the claim was put
forward on behalf of the appellants (the clerks of the respondent Company) that
the dearness allowance for them should be at the same rates as those decided
upon by the Bengal Chamber of Commerce in respect of the middle classes to
which the appellants belonged and they contended that the procedure adopted by
the Labour, Appellate Tribunal leaving out 20 points of the living cost index
un-neutralised was not justifiable.
Held, that in matters of the grant of
dearness allowance there cannot be a hard and fast rule applicable to all kinds
of employees and except in the very lowest class of manual labourers it is not
proper to neutralise the entire rise in the cost of living by dearness
allowance. There are different grades among the middle classes and the
appellants cannot claim to have the same rates of dearness allowance as those
fixed for the clerks of the mercantile firms by the Bengal Chamber of Commerce.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 105 of 1954.
Appeal by special leave from the judgment and
order dated November 6, 1952, of the Labour Appellate Tribunal, Calcutta in
Appeal No. Cal-3 of 1952 773 arising out of the award dated September 25, 1951,
of the Court of District Judge, Industrial Tribunal, Calcutta in Case No.
VIII-23 of 1951.
S. C. Isaacs, A. K. Datt and Sukumar Ghose,
for the appellants.
M. C. Setalvad, Attorney-General for India,
D. B. Das and S. N. Mukherji, for the respondent.
B. Sen and P. k. Bose, for Intervener (State
of West Bengal).
1956. October 11. The Judgment of the Court
was delivered by GOVINDA MENON J.-This appeal is by special leave against the
decision of the Labour Appellate Tribunal of India, Calcutta, which modified
the award, passed by the Industrial Tribunal, Calcutta, in the matter of a
dispute referred to it by the Government of West Bengal, for adjudication with
regard to the rates of dearness allowance for clerks and Depot cashiers,
employed by the Calcutta Tramway's Coy.
Ltd., numbering about 600, out of a total of
Disputes having arisen between the workmen of
the Calcutta Tramways Coy, Ltd. (which may hereafter be called 'The Company')
on the one hand, and the employers on the other, relating to the dearness
allowance payable to the workmen, there were two previous awards, one dated May
16, 1947, by Sri S. N. Guha Roy, and the other dated October 27, 1948, by Sri
P. K. Sircar. Both of these awards related to all the employees of the Company
and not to the clerks and Depot cashiers alone. Subsequently a reference was
made by the West Bengal Government on June 13, 1951, concerning a dispute
relating to the dearness allowance of the workmen of the Company, excluding
clerks and Depot cashiers. There was an award and an appeal, and in that appeal
the Appel. late Tribunal increased the dearness allowance by Rs. 7/8/for
workmen in the pay ranges below Rs. 50 and up to the pay range of Rs. 250 and
by a flat rate 774 of Rs. 5 in the higher pay ranges taking the cost of living
index of the workmen class at 370 points.
In the present award, which relates to the
clerks and the Depot cashiers alone, the Industrial Tribunal gave Rs.
47/8/as dearness allowance for a pay range of
Rs. 51 to Rs. 100 and provided for a progressive increase of Rs. 5 for each
slab of Rs. 50 in the pay range.
The Appellate Tribunalincreasedthe amounts so
awarded by Rs. 2/8/more than what was granted to the other workmen of the
Company. The cost of living index for the middle class families had been fixed
by an investigating body of the Bengal Chamber of Commerce during the relevant
year at 382 points, whereas the index in the case of working class was fixed at
370 points. The increased amount awarded for the various pay ranges and shown
in the decision of the Labour Appellate Tribunal which need not be repeated
again, was founded on these cost of living indices though the amount was not
the same as recommended by the Bengal Chamber of Commerce.
Before the -Labour Appellate Tribunal, as
well as the Industrial Tribunal, the claim put forward on behalf of the clerks
and Depot cashiers was that the dearness allowance should be on the same rates
as decided upon by the Bengal Chamber of Commerce of which the company is a
member and no difference should have been made between the dearness allowance
recommended by the Bengal Chamber of Commerce and that to be awarded by the
Industrial Tribunal. In fact, what was urged was that the recommendation of the
Bengal Chamber of Commerce ought to have been accepted in its entirety for the
reason not only that the Company is a first class member of the Chamber but
also that the class of persons, namely the middle classes for whom the
recommendation was intended, includes clerks and Depot cashiers of the Company
as well, and the same having been accepted ,by the Mercantile Tribunal which
dealt with the dearness allowance payable to the employees of the mercantile
firms in Calcutta, the Industrial Tribunal, as well as the, Labour Appellate
Tribunal, should have 775 followed the same. The learned Judges of the
Appellate Tribunal held that those recommendations were made to the mercantile
firms where the workmen consist practically of the clerical and subordinate
staff as -opposed to Tramways Company where the large percentage of workmen
belong to other categories, the clerks and Depot cashiers being only a small
minority, though they found that the cost of living index found by the Bengal
Chamber of Commerce should be accepted as the criterion for awarding the
increased dearness allowance in the case of the employees of the Company as
On behalf of the appellants it is urged before
us that a different mode of treatment than the one recommended by the Bengal
Chamber of Commerce should not have been resorted to in the case of the
appellants, for the reason that those recommendations are intrinsically
reasonable, considering the uniformity of life and modes of habit of the middle
classes to which the clerks and Depot cashiers belong. The, respondent Company
being a member of the Bengal Chamber of Commerce should, instead of ignoring
the recommendation have acted upon it as a mandate, so that its action as a
member should not be inconsistent with that followed by others especially since
there have been no valid reasons alleged for the non-acceptance of the
recommendation. It-is further urged that there is no acceptable defence put forward
that the abovementioned recommendation will not apply to institutions having a
mixed staff as the Company in question. On the other hand, what is stated in
the written statement of the Company is that according to the previous award it
had been paying a uniform sliding scale of dearness allowance for all
categories of workmen as detailed in Paragraph 6(b). It is, therefore,
contended that what the Industrial as well as the Appellate Tribunal should
have done was to have evolved a principle to fix the dearness allowance in
relation to the' basic salaries and the cost of living index, as that alone
would satisfy the recommendations of the Bengal Chamber of Commerce.
776 ,We have, therefore, to see whether in
following the course now adopted by the Tribunals below they have ignored any
legal principle or acted in violation of any statute. There can be no doubt
whatever that if the scheme adumbrated by the Bengal Chamber of Commerce is
adopted in the case of clerks and Depot cashiers, they would get amounts far in
excess and out of all proportion to what were awarded to the other workmen
whose appeal had already been disposed of by the Appellate Tribunal though it
has to be recognized that the cost of living index in the case of the
appellants has to be considered to be more than the index of workmen whose
avocations are the result of physical labour rather than of mental faculties.
In short, the clerks and Depot cashiers should be considered as the white
In these circumstances, we have to find out
whether the procedure followed by the Labour Appellate Tribunal, namely leaving
out 20 points un-neutralised and allowing Rs. 5 per 20 points rise in the
living cost index but taking into consideration a higher living cost index of
382 in the case of the appellants as compared with the average index of the
workmen of 370, is a justifiable method to be adopted.
It is difficult to hold that the middle
classes in this country can be said to form a separate stratum of society even
in a city like Calcutta having the same mode of life, the same necessities,
uniform requirements and comforts.
There are different grades even among the
middle classes and it is unwise to predicate the same degrees of comforts and
necessities for everyone who is said to belong to the middle classes. Such
being the case, to say that the clerks in the mercantile firms can be
considered equal in all respects to the 600 clerks and Depot cashiers of the
Company, is an argument which cannot be accepted as sound. The Labour Appellate
Tribunal has not completely ignored the recommendations of the Bengal Chamber
of Commerce, for it is seen that in raising the amount awarded by the
Industrial 777 Tribunal the Appellate Tribunal has based its conclusion on the
higher cost of living index in the case of middle class employees.
Such being the case, the point for
consideration is whether any question of principle is involved, so that this
court might interfere with the conclusions arrived at by the Labour Appellate
Tribunal. Wide and undefinable with exactitude as the powers of the Court are
(see Dhakeswari Cotton Mills Ltd. v. Commissioner of Income Tax, West
Bengal(1)), it is now well settled that generally the necessary pre-requisites
for this court's interference to set right decisions arrived at by Tribunals
whose conclusions on questions of fact are final can be classified under the
following categories, namely, (1) where' the Tribunal acts in excess of the
jurisdiction conferred upon it under the statute or regulation creating it or
where it ostensibly fails to exercise a patent jurisdiction; (ii) where there
is an apparent error on the face of the decision and (iii) where the Tribunal
has erroneously applied wellaccepted principles of jurisprudence. It is only
when errors of this nature exist, that interference is called for. In the
present case the appellants have not been able to show that there is any
deviation from those principles.
If the Tribunal below had failed to-resort to
a basic principle, then something might have been said but what has been done
is, that in computing the dearness allowance it has considered various methods
and adopted one of them.
That being the case, it is' difficult to say
that there is any question of principle at all.
The report of the Central Pay Commission at
page 46, in Paragraph 71, made the following recommendation:
"Without adopting such a complicated
procedure, we think it sufficient to provide by slabs for persons on different
levels of pay, as shown in the accompanying table which also provides for
diminishing rates of dearness allowance as the cost of living index falls,
taking the stages by 20 points at a time".
(1)  1 S.C.R. 941, 949.
778 It refrained from recommending the
neutralisation of the entire higher cost of living by means of dearness
The report of the Committee on Fair Wages
appointed by the Government of India in Chapter IV, dealing with Wage
Adjustments considered in paragraph 43 the various modes and methods of
granting relief to meet the burden of increased cost Of living and came to the
conclusion that there is no practice of uniformity in the extent of
compensation given to employees to meet the increased cost of living. It
observed as follows:"The Pay Commission has accepted, the principle that the
lowest paid employee should be reimbursed to the full extent of the rise in the
cost of living and that, higher categories of employees should receive a
diminishing but graduated scale of dearness allowance. The Pay Commission has
rejected the principal of a flat rate for all categories of employees,
irrespective of their basic salaries".
Finally it came to the conclusion "that
for the lowest categories of employees the target should obviously be
compensation to the extent of 100 per cent. of the increase in the cost of
living. For categories above the lowest we agree that the same consideration
will not apply. A flat rate equal to the rate allowed to the least skilled
worker is not likely to satisfy higher categories".
In the analysis regarding the Industrial
Awards, issued by the Government of India, Ministry of Labour, the question of
dearness allowance is considered somewhat elaborately. At page 33 there is a
discussion regarding the linking of dearness allowance to the cost of index
numbers and as to whether a flat rate of dearness allowance irrespective of the
income group should be allowed or not. They further considered the linking of
dearness allowance to the cost of living index numbers on the scale of income
groups, but at rates diminishing with the income received. A perusal of the
fairly elaborate discussion in Chapter 779 III shows that there cannot be a
hard and fast rule applicable to all kinds of employees. Very much will depend
upon the conditions of labour, the nature of the locality and the mode of
In Buckingham and Carnatic Company Ltd.,
Madras v. Workers of the Company(1) the Tribunal considered the question of
neutralisation of the rise of the cost of living by the grant of dearness
allowance and was of the opinion that cent per cent neutralisation cannot be
allowed, as it would lead to a vicious circle and add fillip to the inflatory
It further held that there was no reason why
the Industrial worker should not make sacrifices line all other citizens.
We can now take it as settled that in matters
of the grant of dearness allowance except tot he very lowest class of manual
labourers whose income is just' sufficient to keep body and soul together, it
is impolitic and unwise to neutralise the entire rise in the cost of living by
dearness allowance. More so in the case of the middle classes.
The criterion to be adopted in the fixation
of dearness allowance is also considered in Mahomad Rai Akbarali Khan v. The
Associated Cement Companies Limited(2) where similar principles are discussed.
On behalf of the appellants our attention was
invited to certain observations contained in The Millowners' Association,
Bombay v. The Rashtriya Mill Mazdoor Sangh(3), but we do not think that any
different principle is enunciated there at all. Mr. Isaacs, the learned counsel
for the appellants, laid great stress on the decision in Workmen of the
Firestone Tyre and Rubber Company of India Ltd., Bombay v. Firestone Tyre and
Rubber Company of India Ltd., Bomba(4) where the Tribunal expressed the opinion
that dearness allowance is intended to neutralise rise in the cost of living
and as there is a well recognised difference between the clerical staff and
other workmen in their cost of living, the latter are not entitled.
(1)  L.A.C. 490, 519, 520. (2)  L
(3)  L.A.C. 371. (4)  L.A.C. 509.
101 780 to claim the allowance on-the same
basis. From this the learned counsel contends that the recommendations of the
Bengal Chamber of Commerce should be accepted in toto. In our opinion, the
decision does not help the point of view put forward on behalf of' the
appellants. In fact, the Labour Appellate Tribunal has made a distinction
between the physical labourers and the clerks and Depot cashiers in whose work
it is not alone the physical exertion that is essential but some kind of mental
and brain work as well and accordingly the higher cost of living index taken
In such circumstances, it seems to us that
the Labour Appellate Tribunal has, after considering the various points of
view, come to the correct conclusion in awarding the dearness allowance it did.
There is no question of -law or principle involved and the appeal has to be
dismissed with costs of the Calcutta Tramways Coy. Ltd.
The State of West Bengal, which has
intervened during the appeal, will bear its own costs.