Bengal Chemical & Pharmaceutical Works Ltd., Calcutta Vs. Their Workmen  INSC 9 (28 January 1959)
CITATION: 1959 AIR 633 1959 SCR Supl. (2) 136
CITATOR INFO :
RF 1961 SC 100 (2) R 1966 SC 976 (22) RF 1967
SC 284 (3,4) F 1967 SC 948 (6) RF 1969 SC 360 (8) APL 1969 SC 513 (16) R 1972
SC1552 (9) R 1974 SC 136 (10) R 1974 SC 526 (18) R 1976 SC 758 (8,9) R 1979 SC
75 (11) F 1989 SC1972 (13) RF 1990 SC1050 (10)
Industrial Dispute-Reference-Government, if
empowered to transfer from one Tribunal to another-Award-If can be superseded
by fresh agreement-Disputes referred on fresh agreement-Reference if
bad-Industrial Disputes Act, 1947 (14 of 1947), SS. 2(r) and 7A. Industrial Disputes
(Amendment and Miscellaneous Provisions) Act, 1956 (36 of 1956), S. 30Industrial
Disputes (Amendment) Act, 1957 (18 of 1957), S. 2.
Supreme Court-scope of jurisdiction vis-a-vis
the Award of Tribunal-Right of appeal-Constitution of India, Art. 136.
Aggrieved by an Award of 195, the employees
placed before the Company a fresh charter of demands which was mutually settled
by a written agreement which provided, inter alia, that the existing rate of
dearness allowance should prevail which was adjustable to any future
substantial change in the cost of living index of the working class. As the
cost of living increased disputes arose, and in spite of the said Award of
1951, 137 which was not terminated according to law, the dispute arising out of
the said written agreement was referred for adjudication by the Government to
the Second Industrial Tribunal, Calcutta, in September, 1956. In April 1957,
the Government transferred the dispute from the Second Industrial Tribunal to
the Fifth Industrial Tribunal. The Company, inter alia, contended that the
Government had no power to transfer the dispute from one Tribunal to another
and that the reference was bad as the 1951 Award had not been duly terminated.
The Industrial Disputes (Amendment and Miscellaneous
Provisions) Act (36 of 1956) amending the Industrial Disputes Act (14 Of 1947)
came into force on August 28, 1956, giving authority to the Government to
transfer a reference from one Tribunal to another, which was followed by a
further amending Act, being Industrial Disputes (Amendment) Act (18 of 1957)
where under among other things a new definition of 'Tribunal' was given,
whereby the Industrial Tribunal constituted prior to March 10, 1957, under s.
7A of Act 14 Of 1947 was included.
Held, that as a result of the amendments to
the Industrial Disputes Act, 1947, the Government had authority to transfer a
case from one Tribunal to another.
'Tribunal ' as defined by s. 2(r) of the Industrial
Disputes Act, 1947, as amended by Act 36 of 1956, read with amending Act 18 of
1957, empowers the Government to transfer a reference from one Tribunal to
Where, in spite of a previous award, the
employees after raising fresh demands entered into a new agreement with the
employer which started a fresh chapter regulating the relationship of the
parties, the previous award, though not terminated in accordance with the
provisions of law, must be deemed to have been superseded.
Held, further, that though Art. 136 of the
Constitution is couched in the widest terms and confers a discretionary power,
(which cannot exhaustively be defined) on the Supreme Court to grant special
leave to appeal from the order of a tribunal, but it is necessary for the
Supreme Court to exercise its said discretionary jurisdiction only in cases (a)
where there is a violation of the principle of natural justice, (b) raises an
important principle of industrial law requiring elucidation and final decision
by the Supreme Court, or (c) discloses such other exceptional or special
circumstances which merit the final decision by the Supreme Court. Such
discretionary reserve power cannot obviously be so construed as to confer a
right of appeal to any party from the decision of a Tribunal, where he has none
under the law.
Industrial Disputes Act is intended to be a
self-contained one and it seeks toachieve social justice on the basis of
collective bargaining, conciliation and arbitration. Awards are given on
circumstances peculiar to each dispute and the Tribunals are to a 18 138 large
extent free from restrictions of technical considerations imposed on courts.
A free and liberal exercise of the
discretionary powers by the Supreme Court may materially affect the fundamental
basis of the decision, namely, quick solution to such disputes to achieve
Where an Industrial Tribunal on the
consideration of the entire material placed before it and having regard to the
overall picture, came to a conclusion of facts, the Supreme Court will not
interfere with such finding of fact nor will it be justified to allow to make a
new case for the first time before it.
Pritam Singh v. State of Madras, 
S.C.R. 453; Hem Raj v. State of Ajmer,  S.C.R. 1133 and Sadhu Singh v. State
of PEPSU, A.I.R. 1954 S.C. 272, referred to.
CIVIL APPELATE JURISDICTION: Civil Appeals
Nos. 125 and 164 of 1958.
Appeals by special leave from the Award dated
August 26, 1957, of the Fifth Industrial Tribunal -at West Bengal in Case No.
S. C. Issacs and S. N. Mukherjee, for the
Appellants in C. A. No. 125/58 and Respondents in C. A. No. 164/58.
N. C. Chatterjee and Dipak Datta Choudhri,
for the. Respondents in C. A. No. 125/58 and Appellants in C. A. No. 164/58.
1959. January 28. The Judgment of the Court
was delivered by SUBBA RAO, J.-These appeals are by Special Leave -from the
Award by Shri G. Palit, Judge, Fifth Industrial Tribunal, West Bengal, in the
matter of a dispute between Messrs.
Bengal Chemical & Pharmaceutical Works
Limited, Calcutta, and their employees, represented by Bengal Chemical Mazdoor
The Government of West Bengal by its order
dated September 13, 1956, referred the following dispute between the parties
referred to above to the Second Industrial Tribunal under s.
10 of the Industrial Disputes Act, 1947 (Act
14 of 1947), hereinafter referred to as the Act. " Is the demand of the
employees for increase in Dearness Allowance justified ? If so, at what
rate?". The said Act was amendedby the 139 Industrial Disputes (Amendment
& Miscellaneous Provisions) Act, 1956 (36 of 1956), which came into force
on August 28, 1956. On April 9, 1956, the' Government made ail order
transferring the said dispute from the file of the Second Industrial Tribunal
to that of the Fifth Industrial Tribunal. The Fifth Industrial Tribunal, after
making the necessary inquiry, made the award on August 26,1957, and it was duly
notified in the Calcutta Gazette on September 26, 1957. As a mistake had crept
in, the award was modified by the Tribunal by its order dated the 29th
November, 1957; and the modified award was published in the Calcutta Gazette on
the 29th November, 1957. Under the award the Tribunal held that there was a
rise in the cost of living index and that to neutralise the said rise the
employees should get an increase of Rs. 7 in dearness allowance on the pay
scale up to Rs. 50 and Rs. 5 on the pay scale above Rs. 50. On that basis the
dearness allowance payable to the employees was worked out and awarded. The
correctness of the award is questioned in these appeals. The Company preferred
Civil Appeal No. 125 of 1958 against the award in so far it was against it and
the Union preferred Civil Appeal No. 164 of 1958 in so far it went against the
employees. For convenience of reference, the parties will be referred to in the
course of the judgment as the Company and the Union.
Learned Counsel for the Company raised before
us the following points: (1) The order dated April 9, 1957, made by the
Government transferring the dispute from the file of the Second Industrial
Tribunal to that of the Fifth Industrial Tribunal was illegal; (2) the previous
award made by the Tribunal between the same parties on April 26, 1951, and
confirmed by the Labour Appellate Tribunal by its order dated August 30, 1951,
had not been terminated in accordance with the provisions of s. 19(6) of the
Act and therefore the present reference was bad in law and without
(3) there was no change in the circumstances
obtaining at the time the previous award was made and those prevailing at the
time of the present reference as to justify making out a new award; (4) the
Tribunal 140 went wrong in taking the rise in the cost of living index between
the years 1954 and 1957 instead of taking the fluctuating rate in the index
between the date of the earlier award, i.e., August 30, 1951, and the date of
the present reference in the year 1957 ; (5) the Tribunal went wrong in so far
as it based its decision on the Second Engineering Award of 1950 which was
already considered by the Tribunal in its earlier award of the year 1951; and
(6) in any event, in computing the amount, the Tribunal applied wrong criteria.
We shall consider the above contentions
seriatim. But before doing so, it will be convenient to refer briefly to the
scope of jurisdiction of this Court under Art. 136 of the Constitution
vis-a-vis the awards of Tribunals. Article 136 of the Constitution does not
confer a right of appeal to any party from the decision of any tribunal, but it
confers a discretionary power on the Supreme Court to grant special leave to
appeal from the order of any tribunal in the.
territory of India. It is implicit in the
discretionary reserve power that it cannot be exhaustively defined. It cannot
obviously be so construed as to confer a right to a party where he has none
under the law. The Industrial Disputes Act is intended to be a self-contained
one and it seeks to achieve social justice on the basis of collective
bargaining, conciliation and arbitration. Awards are given on circumstances
peculiar to each dispute and the tribunals are, to a large extent, free from
the restrictions of technical considerations imposed on courts. A free and
liberal exercise of the power under Art. 136 may materially affect the
fundamental basis of such decisions, namely, quick solution to such disputes to
achieve industrial peace.
Though Art. 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 the 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.
The points raised by the 141 learned Counsel,
except perhaps the first point , do not stand the test of any one of those
Learned Counsel for the Company, however,
says that, though the' said principles might be applied at the time of granting
leave, once leave is given no such restrictions could be imposed or applied at
the time of the final disposal of the appeal. The limits to the exercise of the
power under Art. 136 cannot be made to depend upon the appellant obtaining the
special leave of this Court, for two reasons, viz., (i) at that stage the Court
may not be in full possession Of all material circumstances to make up its mind
and (ii) the order is only an ex parte one made in the absence of the
respondent. The same principle should, therefore, be applied in exercising the
power of interference with the awards of tribunals irrespective of the fact
that the question arises at the time of granting special leave or at the time
the appeal is disposed of. It would be illogical to apply two different
standards at two different stages of the same case. The same view was expressed
by this Court in Pritam Singh v. The State of Madras (1), Hem Raj v. State of
Ajmer(1) and sadhu Singh v.
State of Pepsu(3) The first question turns
upon the construction of the relevant provisions of the Act as amended by the
Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956.
The relevant provisions inserted by the
Amending Act read as follows:
"Section 2(r) : I Tribunal' means an
Industrial Tribunal constituted under section 7A." " 7 A.
Tribunals.-(1) The appropriate Government may, by notification in the official
Gazette, constitute one or more Industrial Tribunals for the adjudication of
industrial disputes relating to any matter, whether specified in the Second
Schedule or the Third Schedule.
(2) A Tribunal shall consist of one person
only to be appointed by the appropriate Government.
(3) A person shall not be qualified for
appointment as the presiding officer of a Tribunal unless(1)  S.C.R. 453.
(2)  S.C.R. 1153.
(3) A.I.R. 1954 S.C. 271.
142 (a) he is, or has been, a Judge of a High
Court; or (b) he has held the office of the Chairman or any other member of the
Labour Appellate Tribunal constituted under the Industial Disputes (Appellate
Tribunal) Act, 1950 (48 of 1950), or of any Tribunal, for a period of not less
than two years.
(4) The appropriate Government may, if it so
thinks fit, appoint two persons as assessors to advise the Tribunal in the
proceeding before it." "33B. (1) The appropriate Government may, by
order in writing and for reasons to be stated therein, withdraw any proceeding
under this Act pending before a Labour Court, Tribunal, or National Tribunal,'
as the case may be, for the disposal of the proceeding and the Labour Court, Tribunal
or National Tribunal to which the proceeding is so transferred may, subject
to-special directions in the order of transfer, proceed either de novo or from
the stage at which it was so transferred :
Provided that where a proceeding under
section 33 or section 33A is pending before a Tribunal or National Tribunal,
the proceeding may also be transferred to a Labour Court." Section 30 of
the Amending Act reads:
" If immediately before the commencement
of this Act, there is pending any proceeding in relation to an industrial
dispute before a Tribunal constituted under the Industrial Disputes Act, 1947
(14 of 1947), as in force before such commencement, the dispute may be
adjudicated and the proceeding disposed of by the Tribunal after such
commencement, as if this Act has not been passed." Section 7, before the
Amendment ran thus:
" The appropriate Government may
constitute one or more Industrial Tribunals for the adjudication of industrial
disputes in accordance with the provisions of this Act.
(2) A Tribunal shall consist of such number
of members as the appropriate Government thinks fit. Where the Tribunal
consists of two or more members, one of them shall be appointed as chairman.
143 (3) Every member of the Tribunal shall be
an independent person, (a) who is or has been a Judge of a High Court or a
District Judge, or (b) is qualified for appointment as a Judge of a High Court:
Provided that the appointment to a Tribunal
of any person not qualified under part (a) shall be made in consultation with
the High Court of the Province in which the Tribunal has or is intended to
have, its usual place of sitting." It will be seen from the aforesaid
provisions that the Amending Act, which came into force on August 28, 1956,
changed the constitution of a tribunal to some extent and conferred a power for
the first time on the Government to transfer a proceeding pending before a
tribunal to another tribunal; or in the case of a proceeding under s. 33 or 33A
pending before a tribunal to another tribunal or to a Labour Court. Section 30
of the Amending Act expressly saves a pending proceeding before a tribunal
constituted under the Act before the Amending Act came into force and directs
that such dispute shall be adjudicated and the proceeding disposed of by that
tribunal after the commencement of the Amending Act as if that Act had not been
passed. A combined and fair reading of the aforesaid provisions, it is argued,
was that s. 33B, inserted in the Act by the Amending Act, was prospective in
operations i.e., it would apply only to proceedings initiated in the tribunal
constituted Under the amended Act and that proceedings pending before the
tribunals constituted under the Act before the commencement of the Amending Act
would be disposed of as if the Amending Act had not been passed. The
Parliament, presumably to clarify the position, brought out another Amending
Act styled the Industrial Disputes (Amendment) Act, 1957 (18 of 1957), where under
among other things, a new definition of " Tribunal " was given in
substitution of that in s. 2(r) of the Act. The substituted definition reads:
" 'Tribunal' means an Industrial
Tribunal constituted under section 7A and includes an Industrial 144 Tribunal
constituted before the 10th day of March, 1957, under this Act."
Sub-section (2) of s. I of the Amending Act 18 of 1957 says that s. 2 shall be
deemed to have come into force on the 10th day of March, 1957. The result is
that section 33B should be read along with the definition of a " Tribunal
" inserted by the Amendment Act 18 of 1957, as if that definition was in
the Act from March 10, 1957. If that definition of a " Tribunal " 'be
read in place of the word ,Tribunal" in s. 33B, the relevant part of that
" (1) The appropriate Government may, by
order in writing and for reasons to be stated therein, withdraw any proceeding
under this Act pending before a Tribunal constituted before the 10th day of
March, 1957, and transfer the same to another Tribunal constituted under
section 7A of the Act." So construed it follows that in respect of
proceedings pending in a tribunal constituted before the 10th day of March,
1957, the Government has the power to transfer them from that date to any other
tribunal. It is said that this construction would make s. 30 of the Amending Act
36 of 1956 otiose or nugatory. That section contained only a saving clause and
it was not inserted in the Act; it served its purpose, and even if it ceased to
have any operative force after the Amendment of 1957, that circumstance cannot
have any bearing on the impact of the amendment of the definition of "
Tribunal " on the provisions of s. 33B of the Act. In the present case,
the Government made the order of transfer on April 9, 1957, i.e., after s. 2 of
Amendment Act 18 of 1957 was deemed to have come into force. It must,
therefore, be held that the Government acted well within its powers in
transferring the dispute pending before the Second Industrial Tribunal, to the
Fifth Industrial Tribunal.
The second contention, namely, that the Award
of 1951 was not terminated in accordance with law, does not appear to have been
pressed before the Tribunal. The governing section is s. 19(6) which says:
" Notwithstanding the expiry of the
period of operation under sub-section (3), the award shall 145 continue to be
binding on the parties until a period of two months has elapsed from the date
on which notice is given by any party bound by the award to the other party or
parties intimating its intention to terminate the award'." In the first
written-statement filed by the Company before the Tribunal, no plea was taken
based upon s. 19(6) of the Act. In the second written-statement filed by the
Company on December 20, 1956, a contention was raised to the effect that the
award dated June 21, 1951, was not terminated under s. 19(6) of the Act, that
the said award was binding between the parties and therefore the reference was
bad in law. Notwithstanding the said allegation, the award discloses that no
issue was raised on that count and no argument was advanced in support thereof.
This attitude might have been adopted by the Company either because it did not
think fit to rely upon a technical point but had chosen to get a decision of
the Tribunal on merits, or it might be that there was no basis for the
contention, as the company might have received notice under the said section.
Though it may not be quite relevant, it may be mentioned that even in 1951 when
the dispute between the parties was referred to the Industrial Tribunal, though
a similar contention was open to the Company and indeed was suggested by the
Tribunal, it moved the Tribunal to give an award on the merits of the matter.
If this plea had been seriously pressed, the Tribunal would have raised a
separate issue and the Union would have been in a position to establish that
notice had been served on the Company as required by s.
19(6) of the Act. As the question raised
depends upon elucidation of further facts, we do not think that we would be
justified in allowing the Company to raise the plea before us, and we,
therefore, do not permit them to do so.
The fourth point turns on the construction of
the terms of the agreement entered into between the parties on September 15,
1954. The dispute between the parties had an earlier origin and apart from the
19 146 present reference, there were as many as four references and four
awards, and the last of them was dated April 3, 1951.
The Company preferred an appeal against that
award to the Labour Appellate Tribunal-, Calcutta, which, with some
modification, confirmed the award of the Tribunal on August 30, 1957. That
award as modified by the Appellate Tribunal fixed the basic wages and the rate
of dearness allowance payable to the employees. The employees were not
satisfied with the award and they placed before the. Company a new charter of
demands claiming higher rates of dearness allowance and wages, but the dispute
was compromised and the parties entered into an agreement dated September 15,
1954, by virtue of which, the Company introduced the incremental scale in the
wage structure. As regards the dearness allowance, it was stated in cl. 1 1 of
the agreement as follows:
"The existing rate of D. A. will prevail
unless there is a substantial change in the working class cost of living
index,in which case the rate will be suitably adjusted." On the
construction of this clause depends the question of the Union's right to claim
enhanced dearness allowance. It is common case that if the cost of living index
in the year 1951 was taken as the basis, there was a fall in the rate of
working class cost, of living index in 1957. On the other hand, if the cost of
living index in 1954 was the criterion, there was a substantial increase in the
cost of living index in 1957. The question, therefore, is what did the parties
intend to agree by the aforesaid clause in the agreement.
To ascertain the intention of the parties, we
should consider the circumstances under which the said agreement was entered
into between the parties. Exhibit 6 is the said agreement. The preamble to the
agreement reads :
" The Company and the Union came to a
settlement in respect of the Pay Scales and Grades in the Charter of Demands
dated 25th June, 1953, at the intervention of Shri A. R. Ghosh, Asstt. Labour
Commissioner during the Conciliation proceedings ending on the 30th August,
1954." 147 The preamble indicates that-the entire situation obtaining on
the date of the agreement -was reviewed and the parties agreed to the terms of
the settlement mentioned therein.
Under clause (1) of the agreement, pay scale
and grade as given in annexure B was agreed upon for the time being for a
period of three years as an experimental measure, to be reviewed, modified or
suspended or withdrawn after three years, depending upon the Company's business
and financial condition. By el. (2), the employees agreed not to raise any
dispute involving any further financial burden on the Company during the next
three years in respect of pay scale and grade. Clauses (3) to (5) deal with
increments and the age of retirement. Clause (6) provides for the piece-rated
(contract) workers in respect of their increments. Clause (7) is in respect of
increment for the daily-rated workers.
Clause (8) is in respect of the grade and
scale of pay and increments of Chemists, Engineers and Doctors, etc. Clause (9)
is to the effect that the employees who would be made permanent thence forward
would be grouped under two divisions for the purposes of giving effect to the
scale of pay. Clause (11) which we have already extracted above relates to the
dearness allowance. Clause (12) says " barring the question of bonus for
1358 and 1359 B. S.the Union withdraws its claim in respect of other items in
the Charter of Demands dated 25th June, 1953." We have given the agreement
in extenso only for the purpose of showing that all the disputes between the
parties arising out of the charter of demands dated June, 25, 1953, were
settled between them and reduced to writing. The agreement was self-contained
and started a new chapter regulating the relationship of the parties to the
dispute in respect of matters covered by it. The award must be deemed to have
been superseded by the new agreement. In this context the crucial words "
existing rate of D. A. ", on which both the learned Counsel relied, could
have only one meaning. Do the words " existing rate " refer to the
date of the agreement or to the date of the award ? It is true that the
existing rate of D. A. had its origin in the award and was made to prevail 148
under the agreement, that is to say that the rate was accepted by the parties
as reasonable on the date of "the agreement, till there was a substantial
change in the working class cost of living index. If the contention of the
learned Counsel for the Company should prevail, the agreement would not be self-contained,
but only to be construed as modifying the earlier award to some extent. We are
satisfied that in regard to matters covered by it, the agreement replaced the
earlier award and therefore the date of the agreement is the crucial one for
ascertaining whether there was substantial change in the working class cost of
living index in the year 1957. We, therefore, reject this contention.
Contentions 3, 5 and 6 raise pure questions
of fact. The Tribunal, on the consideration of the entire material placed before
it, came to the conclusion that there was change of circumstances which
entitled the employees to claim an increase in their dearness allowance. It has
also fixed the rate of increase in the dearness allowance on the basis of the
rise in the cost of living index. In doing so, it also took into consideration
the difficulties facing the industry and the repercussion of the rise in the
dearness allowance on the consumers in general. Having regard to the overall
picture, it came to the conclusion that full neutralisation of the deficiency
as a result of rise in the cost of living index by dearness allowance could not
be permitted and therefore allowed them only 75 per cent. of the increase in
the dearness allowance to which they would have otherwise been entitled on the
basis of the rise in the cost of living index. The finding given by the
Tribunal is one on fact and we do not see any permissible ground for
interference with it in this appeal by special leave.
Before closing, one point strenuously pressed
upon us by the learned Counsel for the Company which is really another attempt
to attack the finding of fact given by the Tribunal from different angle must
be mentioned; it was that the Tribunal wrongly relied upon Exhibit 3, corrected
on the basis of the information given by the State Statistical Bureau, West
Bengal, for ascertaining the working class cost of living index since August
1954 up to March 1957. On the 149 basis of Exhibit 3, the Tribunal held that
the working class cost of living index stood at 344.1 in August 1954 and it
rose to 400.6 in May 1957, with the result that there was a rise of 56 points,
a substantial rise in the cost of living index. Exhibit 3 certainly supports
the finding of the Tribunal. The learned Counsel for the Company points out
with reference to the relevant entries in the Monthly Statistical Digest, West
Bengal, that the said figures relate only to working class menials and the
corresponding entries in regard to the working class cost of living index do
not indicate so much increase as in the case of the menial class. Learned
Counsel has also taken us through the relevant figures. The relevant entries in
the Monthly Statistical Digest were not filed before the Tribunal.
Indeed when the Union's witness, Shri
Satyaranjan Sen, was examined before the Tribunal, he was not cross-examined
with a view to elicit information that Exhibit 3 did not relate to the working
class cost of living index. When Shri Chatterjee, the Assistant Manager of the
Company, who was examined after Shri Sen, gave evidence, he not only did not
object to the entries in Exhibit 3 but stated that he was not aware of any
substantial increase in the working class cost of living index and complained
that similar entries for all the relevant years had not been produced. Even
before the Tribunal it does not appear that any argument was advanced
contesting the relevancy of Exhibit 3 on the ground that it did not refer to
the working class cost of living index. In the circumstances, we do not think
that we are justified to allow the learned Counsel -for the Company to make out
a new case for the first time before us, upsetting the Tribunal's basis for
calculation and involving further and different calculations.
In the result, we confirm the award of the
Tribunal and dismiss the appeal with costs.
The learned Counsel, appearing for the Union,
did not press the appeal No. 164 of 1958, filed by the Union, and therefore it
is also dismissed with costs.