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KAMANI METALS & ALLOYS LTD.

v.

THEIR WORKMEN

January 24, 1967

(M. HIDAYATULLAH, S. M. SIKRI AND C. A. VAIDIALINGAM, JJ.]

Industrial Dispute-Criteria for revision of wages and dearnes.• a//ow­

ance-W hat ar~ comparable cone.ems-Departure from point to point

odjrutment when permissible-Award-Interference by Suprem• Court in

ap1>6al-RAtrospective opera1ion of award-L•galll)I of-Refertnct !D the

Tribunal, with resptct to sptcial categories of empioye•s-Wl1en Trib111llll

can fix new scales for all employees.

1be award of the Industrial Tribunal in an industrial dispute between

Ille appellanto(lOmpany (manufacturing products of non-ferrous metals

and .alloys) and its workmen, was challenged in appeal to this Court on

the following grounds:-

( 1) There was no change of circumotances justifying a revision of

the wages, pay scales and deameso allowance, (2) while making auch

revision by it. award, many of the matters stated in the judgment of

this Court in Novex Dry Cleaners v. Its Workmen, [1962] I LLJ. 271

(S.C.) were not considered by the Tribunal; (3) the Tribunal had com­

pared dissimilar concerns and not compared similar ones; ( 4) the Tribunal

took into account an irrelevant factor, namely, the yield from incentive

bonus; (

5) no case was made out for adjustment of the workmen in the

new

time'8cale after grantin!f them one additional Increment after every

3 years service and two add11ional increments, after 5 years' service (6)

the Tribunal was in error in making the award retrospective from !st

October 1962, when the reference was made to it only on 14th December

1962;

(7) the Tribunal had gone beyond the reference inasmuch as the

reference

was in respect of

special categories of monthly-rated employees

by designation, whereas the Tribunal had fixed the new scales of pay

aot only for those workmen but for all clerical and other workmen who

were classified as Grades A, B, C, and D; ·and ( 8) the linking of dearness

allowance, after the consumer price index 321, to wages, has made a de­

parture froin the fixation of dearness allowance fixed in another concern,

where the percentage was that of the dearness allowance and not of the

basic

salary.

HELD :

Io. an ar,peal brought by special leave against the award,

before a party can c aim redress, it must lie shown ·that the award was

defective by reason

of an

exoess of jurisdiction, or of a substantial error

iil applying the law or some settled principle, or of some groso and palp·

able error occasioning •ubstantial in1ustice. [471 A.CJ

( 1) There-was no revision of wages or dearness allowance in the

appeDant-<:0mpany during the last 20 years even though commodity prices

had soared high, the general level of wages had gone up, and there had

been two or three revisions already in some industries, while in some

othm, Wage Boatds have been appointed IX> revise or fix wages. There­

fore, the demand of the workmen for a revision was justified. [466 F·H]

(2) In order to make the fair wage meet the increase in the cost of

living dearness allowance is paid to make up the disparity to a certain

ex.tent. When, In course of time, it is found that it is not sufficient, because ·

of a further increase in the cost of living, a revision of wages and dearness

~owance becomes necessary. This Court in its decisions has merely

laid down the priru:ipal

0

guide-lines to be followed in industrial adjudica-

464 SUPllBME COUIT llBPOllTS

(1967) 2 S.C.R.

tion. ·rhc v;1r1ou~ ub~Cr't':lliun.i are not intended to operate wilh the A

rigidity of a statutory enactment. Each case must be considered on its

own tacts and only relevant circumstancec; should enter into the determi·

nalion or the wage ~tructurc. The fu.1damen1al principles to be considered

are: (•) how the wages of the worker.. concerned compare with .those

pai<l. to work\!r.i of similar grade and skill hy other employers. in similar

or olhcr industries in rhe region, and (b) what wages rhe establishment or

industry can atfrrd to pay. Jn the present case, taking into account the B

increase in its net profits and the fact that the burden of the increosed

wage bill would not be more than 1/ 10th of the net profits, the Tribunal

was rigltt. in holding that the appellant had the capacity to pay the incrca<Cd

wage bill. [467 B-C, H; 468 A-B, G-H; 469 A-DJ ,

( 3) The Tribunal :om pared the appellant<ompany with four eniti­

neenng concerns. One of them belonged to the same group of industriea

as the appellant. There were common awards in respect of both of them.

Further, there was an award given at the same time by the same Tribunal C

in the connected concern also, the charter of demands being the same as

in tile appellant-<:ompany and based on several common exhibits. SiDCe

the number of industries in the region wa, small. it was open to the Tri·

bunal to take into consideration the conditions existing in the engineering

concerm in the region, particularly those in a concern where there is

.affinity, even though the appellant-<:ompany could not be described as a

:general engineering industry. Smaller concerns. where the scale of pay

is considerably lower, do not furnish a just hasis for compar:son. (470 D

A. B, D. F-OJ

Greaves Collon & Co. v. The Workmen, [ i 964J 5 S.C.R. 362, follow­

ed.

(

4) The Tribun;1)

fbtcd lower wa~es in the rcrerence relating to lhe

~onnected concern. because, a substantial sum was earned in that establish-

ment by way of incentive bonus. But in the case of the appellcint<om·

pany. finding the yielJ from incentive bonus, low, the Tribunal fixed the

wages at the proper level without considering the yield from incentive

bonus, that is, without being influenced by it in any way. [471 E, G·H;

472 A.BJ

I

(5) In the present case the fixation of scales of pay has been very

-..:autious, the starting wage and the annual increment were not high ... and

therefore. it cannot he said that the Tribunal was in error in departing

from point-to-point adjustment in granting increments ba~cd on the length F

of service. [472 G-HJ

Observation:< in Hindus/an Times v. Their Workmen, (1964] I S.C.R.

234 at p. 249, followed.

(6) In view of the facts that the workmen demanded retrospective

revision from !st July 1961, and that the matter was referred to the Con­

ciliation Board in September 1962, the choice of !st October 1962 by the

Tribu"31 cannot be characterised as either illegal or unfair. [473 Cl G

(7) The monthly-paid employees mentioned by name in the order of

reference belong to one category or another in the Grades A to O. The

intention was lo have a general revisio:i of the scale of p_ayment to all

workers paid month!)'; otherwise, it would have been invidious far some

persons in the same Grade to receive more pay than others. The Tribunal

was therefore right in treating the reference as referring to all the four

Grades and not reading it as restricted only to a fe"' classes. [473 F-H]

(8) There have been a number of awards in which dearness allow-H

ance was fixed in the same manner as by the present award. The. award

in

the connected concern coJ1d not

be used a.~ a precedent .. because of

the special facts obtaining in that concern. [475 C, E]

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KAMAN! METALS v. WORKMEN (Hidayatul/a/1, J.) 465

A Clv1L APPELLATE JuRISDICTION: Civil Appeal No. 634 of

1965.

Appeal by special leave from the Award (Part II) dated April .

23. 196-l of the Industrial Tribunal, Maharashtra, Bombay in

Reference (IT) No. 271 of 1962.

B El. R. Gokhale and /. N. Shroff, for the appellant.

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K .. Singhvi, R. S. Kulkarni, S. C. Aganmla and D. P.

Singh, for the respondents.

The Judgment of the Court

was delivered by

Hidayatullait, J. This is an appeal against the Award. Aprii

23, 1964, of the Maharashtra Industrial Tribunal, Bombay (Mr.

Meher) in reference (IT) 271 of 1962. The Award was given in

a dispute between the Kamani Employees Union, Bombay ·and

the Kamani Metals & Alloys Ltd. The Company is the appellant

before

us. The reference was occasioned by a demand raised by

the

Union on February 25, 1960 in relation to wage scales and

classifications, dearness allowance, production bonus, permanency

for daily-rated workmen and grades and

scales of pay,

dearness

allowance and abolition of marriage-clause for monthly paid

employees. At

first a reference was made to a Conciliation Board

by the Government on September 8, 1962. The conciliation was

frustrated for some reasons and on December.14, 1962, the Bombay

Government acting under

s. IO(I)(d) of the Industrial Disputes

Act,

1947 referred the dispute to the Tribunal for adjudication.

By the Award now under appeal, some points were decided in

favour

of the Company and some others in favour of the

work­

men. The workmen have not appealed and the Company. has

also confined this appeal to some of the points decided against it.

We are concerned with a Company which is carrying on the

business

of melting and manufacturing all kinds of rolled products

of non-ferrous metals and alloys, copper and copper-based alloys,

such as sheets, strips,

coils etc. According to the Company the

process

of manufacture, unlike the general engineering industry,

involves only the melting of the non-ferrous metals and casting them

into suitable slabs for the subsequent processes

of hot and cold

rolling

to alter their shape, size and metallurgical properties. The

product

so wrought serves as a base raw material for making pro­

ducts such

as automobiles, telephones, radios and other electrical

gadgets, etc. The Company claims that it cannot be described

as a general engineering industry.

The main contentions in this appeal concern the revision

of

wages and monthly pays and the fixing of wage scales and time

scales in respect

ther~f. respectively, and the increase in dearness

allowance by adopting a

new system of calculation. The Company

466 SUPIUUR OOUl.T UP<>aTI (1967) 2 S.C.R.

also complains that the Award has been given retrospective opera­

tion entailing heavy burden upon it. In support

of the above con­

tentions the Company states that its financial capacity

does not

bear the revision either of the wages and pays on the one hand or

the dearness allowance on the other. It submits that the Tribunal

in revising the wages, pays and the dearness allowance has fol­

lowed wrong principles and ignored those laid down by this Court.

Much

of the argument in respect of wages to daily rated workmen

and

pays to monthly-rated workmen is common and it will not be

necessary to refer to the argument twice over in the course of this

judgment.

This

is the first revision of wages and the dearness allowance

in this Company during the last 20 years. The wage scales and

the dearness allowance were fixed unilaterally to start with. The

minimum basic wage was

fixed at Rs.

30 per month or Rs. 1 · 16

per day which was the minimum settled by the Bombay Teittile

Standardization Award and the First Central Pay Commission

for Government servants in or about 1950. The Tribunal has

raised the minimum wage to Rs. l · 35 per day, which is equivalent

to a wage of Rs. 35 per month. The maxima have also been

raised proportionately. Similarly, in the case of monthly rated

workmen the minimW'I monthly salary, which was Rs. 60 for

the lowest grade clerk, has been raised to Rs. 85/-and the maxi.mum

has been increased in almost the same proportion. The Company

contends that this increase

is based upc

!! wrong principles inas­

much as the wages and pays in this company have been compared

not only with the companies operating non-ferrous metals in the

same way but with general engineering concerns and has taken an

irrelevant factor, namely, the yield from incentive bonus into con­

sideration, has made wrong grades and unnecessary adjustment

in making fitments without taking into account the financial burden

thus involved and the capacity

of the Company to bear it. We

shall consider

these submissions.

In dealing with these contentions

we shall begin by considering

one contention which, if accepted,

will cut at the very root of the

case for revision

of wages. It has, however, no merit. The sub­

mission is that there

is no change of circumstances justifying a

rc'fision of wages and pay scales or dearness allowance. It can

hardly be maintained that wages

fixed so far back do not need

revision, when, as every one knows, commodity prices have soared

high, the general level of wages has gone up and in some industries

there

have been two or three revisions already and in some others

Wage Boards have been appointed

to revise or fix wages. We can take judicial notice of these facts. In this Company no revision

has taken place and the demand is, therefore, not unjustified.

Before

we deal with the other

contentipns it is necessary to

make a

few preliminary observations about the principles which

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KAMANI MBTALS v. WORKMEN (Hidayatullah, /,) 467

are to be followed. Jn questions of this type it is first desirable to

consider what amount is necessary to maintain and even improve

the workers' standard of living, how wages of the workers con·

cerned compare with those paid to workers of similar grade and

skill by other employers in similar or other industries in the region

and what wages the establishment or industry can afford to pay.

These are the fundamental principles which have to be borne in

mind. The first, however, is a general inquiry into the structure

of wages which it may not be necessary to examine elaborately

each time because that inquiry is generally made independently

of

individual cases. The data is usually compiled by labour

confer­

ences and experts. The other two matters, of course, r,equire

attention.

Fixation

of a wage-structure is always a delicate task

because

a balance has to be struck between the demands of social justice

which requires that the workmen should receive their proper share

of the national income which they help to produce with a view to

improving their standard of living, and the depletion which every

increase in wages makes in the profits as this tends

to divert capital

from industry into other channels thought to be more profitable.

The task is not rendered any the easier because conditions vary

from region to region, industry to industry and establishment

to­

establishment. To cope with these differences certain principles

on which wages are

fixed have been stated from time to time by

this Court. Broadly speaking the first principle is that there is

a minimum wage which, in any event, must be paid, irrespective .

of the extent of profits, the financial condition of the

establish­

ment or the availability of workmen on lower wages. This mini­

mum wage is independent of the kind of industry and applies to all

alike big

or small. It sets the lowest limit below which wages

cannot be allowed to sink in all humanity. The second principle

is that wages must be fair, that is to say, sufficiently high to provide

a standard family with food, shelter, clothing, medical care and

education

of 'Children appropriate to the workman but not at a

rate exceeding his wage earning capacity in the class

of

establish­

ment to which he belongs. A fair wage is thus related to the earn­

ing capacity and the workload. It must, however, be realised

that 'fair wage' is not 'living wage' by which is meant a wage which

is sufficient to provide not only the essentials above-mentioned

but a fair measure

of frugal comfort with an ability to provide for

old age and evil days. Fair wage lies between the minimumwage,

which must be paid in any event, and the living wage, which is

the goal. As time passes and prices rise, even the fair wage fixed

for the time being tends to sag downwards and then a revision is

necessary. To a certain extent

ihe disparity is made up by the

additional payment of dearness allowance. This allowance is

given to compensate for the rise in the cost

of living. But as it is

466 SUPalM! couar alPORTS [1967] 2 S.C.R.

not advisable to have a 100% neutralisation lest it lead to inflation.

the dearness allowance is often a little less than 100% neutralisa­

tion. In course of time even the addition of the dearness allowance

doe; not sufficiently make up the gap between wages and cost

of living and a revision of wages and/or dearness allowance then

becomes necessary. This revision

is done on certain principles.

ThL-se principles have been stated in more than one case of

this Court. The Company, however, relies upon Norex Dry Clea­

ners v. Its Workmen('). The principle; laid down in that case

have been accurately summarized

in the head-note thus :

" .... But in fixing a fair wage. the capacity of the

industry to bear the burden of the said wage scale is a very

relevant and very important factor. Before comparing the

establishment

in question with other establishments engaged

in the same trade in the region, it would

be obviously

necessary for the industrial tribunal to compare the

establishments

in respect of their standing, the extent of

the labour force employed by them. the extent of their

respective customers and what

is more important.

a com­

parative study should be made of the profits and losses

incurred by them for some years before the date of the

award. It

is well known that ih fixing the wage structure

on a fair basis ; an attempt

is generally made in assessing

the additional liability imposed on the employer by the

new wage structure and

tn"ing to anticipate whether

the employer would

be able to meet it for a reasonably

long period in future.

Where the award simply

fixed the wage scales on

the assumption that the establishment in question was

comparable to the other two establishments in the same

region without considering the aspects mentioned above,

it must be set aside. In the consequence, the industrial

tribunal was directed to reconsider the question,

of fixation

of wage scales in the light of the principles mentioned

supra.

..

The Company contends that many of the matters here stated have

not

been considered and the Award being defective for that reason

deserves

to be set aside. This is not a proper approach. The

observations no doubt lay down the principal guide-lines but they

are not intended

to operate with the rigidity of a statutory

enact­

ment. The Court has indicated what lines of inquiry are likely

to lead to the discovery of correct data for the fixation of fair wages

in the sense explained above. In this task all the relevant consi­

derations must enter but fruitless inquiries into matters of no parti-

<ll (1962) I L.L.J. 271.

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XAMANl METALS v. WORKMEN (Hidayatu//a/1, J.) 469

cular importance to a case are hardly to be insisted upon because

rather than prove

of assistance, they

might well frustrate the very

object in view. Each case requires to be considered on its own

facts. In the case before us, all relevant circumstances have. in

our opinion, entered the determination. and it has not been shown

to us that any other circumstance could or should have been con­

sidered.

In fact the argument was that the tribunal considered

some irrelevant things and this has vitiated the finding.

We shall

now consider the specific objections.

The Company has a capital of Rs.

40,00,000. Its sales in

1957-58to1961-62 increased from Rs.

1,81,18,873 to Rs. 2,31,50.485

and its profits in 1962-63 were of the order of Rs.

28 lakhs, ex­

cluding Rs. St lakhs for depreciation and Rs. 2 lakhs for managing

agency commission. The burden of the increased wage bill

will

not be more than l / l

0th of its net profits, to say nothing of some

other savings by way

of reduction of income-tax. The tribunal

held that the burden could

be borne and we agree.

One part of

the inquiry, namely, the capacity to pay the increased

wage bill

was satisfied.

The next part

of the inquiry involved the application of the

principle of industry-cum-region. This principle

is that fixation

or revision

of scales of wages, pays or dearness allowance must

not

be out of tune with the wages etc. prevalent in the industry

or the region. This

is always desirable so that unfair competition

may not result between an establishment and another and diversity

in

wages in the region may not lead to industrial unrest. In

attempting to compare one unit with another care must

be taken

that units differently placed or circumstanced are not considered

as guides, without making adequate. allowance for the differences.

The same

is true when the regional level

of wages are considered

and compared. In general words, comparable units may

be com­

pared but not units which are dissimilar. While disparity in

wages

in industrial concerns similarly placed leads to discontent, attempt­

ing to

level up wages without making sufficient allowances for

differences, leads to hardships.

It

is complained that the Tribunal, has done exactly the op­

posite. namely, that it bas compared dissimilar concerns and not

compared similar ones. What the Tribunal

has done is to

com­

pare the Kamani Metals & Alloys (appellant Company) with the

Indian Smelting and Refining Co. Ltd. and the Kamani Engineer­

ing Corporation Ltd. The appellant Company does not object to

the first but to the second

as it deals with non-ferrous metals and

alloys and does not require engineering process

in its manufacture.

For

the same reason a comparison with Alcock Ashdown and

Co. and Richardson and Cruddas

& Co. is objected to.

On the·

other hand, it is submitted that another company Devidayal Metals

Industries Ltd., Bombay

was a comparable concern.

470 SUPUMI OOtllT UPOaTI ( 1967] 2 S.C.Jl.

Both sides agree that a comparison with the Indian Smelting

and Refining Co. Ltd. was proper. As regards Devidayal it is

clear from the records that it is a much smaller concern and does

not furnish a just basis for comparison. The scales

of pay existing

in it are considerably lower than the existing scales in many

instances.

As regards Kamani Engineering Corporation it is

neces­

sary to consider a few facts. In 1951 a common award was given

in respect of Kamani Engineering Corporation and the Kamaru

Metals· and Alloys. In 1958 the demand for revision of dearness

allowance

was rejected by a common award. This time too the

charter

of demands in respect of the Kamani Engineering and

Kamani Metals

& Alloys was the same and given within a few

days of each other. These references were first pending

befor~

Mr. T. Bilgrani but as he had 551 references pending before him five

references in respect of the Kamani group of industries were with­

drawn from him and made over to Mr. Meher. The references

were heard together. The award

in the Kamani Engineering was

rendered on 27th February, 1964 and that in

Kamaru Metals &

Alloys on 23rd April, 1964. Many of the exhibits were common

and the two awards refer to these common exhibits.

In these

circumstances, the comparison

was not

inadmissible. The principle

of fixation of wages and dearness allowance was stated by this

Court in these words :

" .... The principle therefore which emerges from

these t.wo decisions is that in applying the industry-cwn·

region formula for fixing wage-scales the tribunal should

lay stress on the industry part

of the formula if there are

a large number

of concerns in the same region carrying

on the same industry ; in such a case in order that

pro­

duction cost may not be unequal and there may be equal

competition

wages should generally be fixed on the basis

of the comparable industries, namely, industries of the same

kind. But where the number

of industries of the same

kind in a particular region

is small, it is the regioll part

of the industry-cum-region formula

which ·assumes

. "(') unportance. . . . . . . . .

In dealing, therefore, with only one comparable concern it \'{as

open to take into consideration the conditions existing in engineer­

ing concerns, particularly those in Kamani Engineering Corpora­

tion, which belongs to the same group and there is thus affinity

between them.

We were taken through the comparative

charts

i;howing the

scales of wages in these cbncerns and pointed out the differences

particularly those operating to the disadvantage of the appellant

Company. That some differences are bound to be there because

(I) Greaves Collon It Co. v. Their Workmcu (1964) S S.C,R. 362: [1964j I LL).

344, 346.

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KAMANI METALS v. WOR,KMEN (Hidaystul/ah, J.) 471

of many imponderables that go into the fixation of wages, goes

without saying. We are, of course, not expected to go into the

matter over again in the appeal.

An appeal against an award

brought

by special

leave is not an appeal as of right. It is not

intended to

be an appeal on every ground of fact and of

law unless

this Court considers it

fit to examine the matter from any special

angle. Before a party can claim redress, it must show that the

award

is defective by reason of an excess of jurisdiction or of a

substantial error in applying the

Jaw .or some settled principle or

of some gross and palpable error occasioning substantial injustice.

An industrial adjudication

by reason that it is an award cannot

be assailed because some other person would have given a different

award or

that elaborate reasons have not ·been given. We have

considered the comparative charts carefully and

on the

whole,

we are satisfied . that the scales of wages as fixed by this Award

when compared with those existing in Indian Smelting, when they

are high, are not so high as to merit special comment or interference.

Sometimes they are lower.

It remains, however, to consider the case from the angle of the scales of wages existing in Kamani

Engineering Corporation.

In dealing with the scales of pay in comparison with those

existing in Kamani Engineering Corporation the Tribunal observed

that higher

wages were being fixed in the Kamani Metals & Alloys

because the yield from incentive bonus in the Kamani Engineering

Corpor.ation

was between

20 to 30 % of the wages and the dearness

allowance whereas in this Company it

was abnormally low.

Mr. Gokhale contended that

the yield from incentive bonus is an

irrelevant factor to take into account and observed that if persons

could

get higher wages by not earning incentive bonus, the result

might

be a disincentive to work at all. Speaking generally, his

objection

is right to a certain extent. But it is not right in the

circumstances

of this case. The Company has since 1949 intro­

duced a scheme

of wage incentive. There is no straight piece­

rate

system under which the worker is paid a fixed amount for

each unit

of out-put. There is .a fixation of average production

for a

whole group and not for the individual worker. The target

in the melting section is fixed at 5000 cwt. and J ·5 % on every

G .additional 300 cwt. is fixed as bonus. Other sections have different

targets and different percentages. A similar scheme also exists

in the Kamani Engineering Corporation. What has happened

is that the Tribunal in

fixing scales of wages in the reference from

Kamani Engineering

fixed lower rates because it was of the opinion

that quite a substantial sum was earned in that

establishment by

H

way of incentive bonus. When the Tribunal came to decide the

present reference it recalled that lower wages were fixed in the

Kamani Engineering Corporation case because

of the yield

frem

ncentive bonus. It, therefore, ascertained the yield in the Kaman i

472 SUPJ.BMI! COU.T llBPOllTS [1967) 2 S.C.R.

Metals & Alloys and finding it low fixed the wages at the proper

level unaffected

by consideration of incentive bonus. This really

means that proper wages were

fixed in the Kamani Metals & Alloys

without being infiuenced

in any way by the yield from incentive

bonus although

in the case of Kamani Engineering Corporation

lower wages were fixed because the yield from incentive bonus

was very high. In these circumstances,

we are of the opinion that

the wages

in the present case have not really been infiuenced by

considerations of yield from incentive bonus

whatever may be

said of Kamani Engineering Corporation.

It was next contended that there is no c•1se made out for ad·

justment of the workmen in the new.time scale after grnnting them

one additional increment after every three years' service and two

additional increments after

five years' service. The principle on

which a point-to-point adjustment is sometimes departed from

and increments are granted

was stated in some cases of this Court.

It is sufficient to refer to only one of them. In

Hindus.an Times,

Lid. r. Their Workme11( '), the question of adjustment of existing

employees into

new scales was considered.

It was observed as

follow~ : ·

•· .... It may well be true that in the absence of any

special circumstances an adjustment

of the nature as allowed

in this case by allowing special increment in the new

scale

on the basis of service already rendered may not be

appropriate. Clearly, however, in the present case the

tribunal took into consideration

in deciding this question

of adjustment the fact that it had been extremely

cautious as regards increasing the old

wage­

scales. Apparently, it thought that it would be fair to

give some relief to the existing employees

by means of

such increase by way of adjustment while at the same

time not burdening the employer with higher rates

of

wages for new incumbents. In these circumstances,

we do not see any justification for interfering with the

directions given

by the tribunal in the matter of

adjust­

ments."

In this case also the fixation of scales has been very cautious. The

increase from Rs. 1·16 to Rs. 1·35 in th~ lowest category is not

very high considering that these wages had existed for

12 years

before they were so adjusted. Similarly, the starting wage in all

the other three categories cannot

be considered to be very high.

The same is the case with monthly-rated workmen. The annual

increment

is not unduly high and in these circumstances it cannot

be said that the Tribunal was in error in departing from a

point-to­

point adjustment to grant one or two increments based on the

(I) [1964] I S.C.R. 2;4, 249: (1963] I L.L.J. 108 I IS.

B

c

D

..

G

H

B

c

D

E

F

G

H

KAMAN! METALS v. WORKMEN (Hidayatu//ah, J.) 473

length of service. The discretion was exercised on sound judicial

Jines.

It was finally contended that the Tribunal was in error in

making the Award retrospective from October I,

1962, when the

reference

was made on December 14, 1962 This objection has

no force. In the charter

of demands the workmen had claimed

retrospective revision from July I,

1961. The matter was referred

to the Board

of Conciliation on September 8, 1962. When

con­

ciliation was frustrated because of the arrest of some of the workers

of the Union under the Defence of India Rules, the present re­

ference was made to the Tribunal. The Tribunal could have easily

chosen September

8, 1962 but chose an intermediate date to be fair

to both sides. In our judgment, the choice

of October

I, 1962

by the Tribunal cannot be characterised as either illegal or unfair.

The question

of incentive bonus revision was not mooted before us

and the direction that incentive bonus should be calculated on the

new scale from Isl January, 1964 is more in favour of the

em­

ployers than the workmen and no grievance can be made about it.

This brings

us to the question of the monthly-rated workers.

Most of the points which

we have discussed in relation to the

daily­

rated workmen are common. We have seen the scales which

have

been fixed and compared them with the rates obtaining in

Indian Smelting and the Kamani Engineeting and other concerns

and are satisfied that they have not

been put so high as to merit

interference at our hands.

It is, however, contended

that the

Tribunal has gone beyond the Reference inasmuch

as the Reference

was in respect of special categories of monthly-rated employees

by designation but the Tribunal has fixed the new scales not

only

for those workmen but for all clerical and other workmen which

were classified as Grades

A, B, C and D in

1950. It is true that

the Tribunal has not only

fixed the new scales for those categories of

monthly-paid employees who were named in the order of

refer­

ence but has also provided that those scales shall apply to clerks

in the

A, B, C and D Grades. It is, however, clear that even the

monthly-paid employees mentioned

by name belong to one

cate­

gory or another in the Grades A to D. It would have been highly

invidious if some persons in the Grades

were to receive more pay

than the others in the same Grade. The A ward, therefore, treats

the Reference as referring to the 4 Grades although only some

of

the class who go by special designations in each Grade have been

mentioned. The intention, however,

was to have a general

re­

vision of the scales of payment to all workers paid monthly and the

Tribunal was, therefore, right in not reading the Reference as

restricted to only a

few classes. By doing so the Tribunal has

avoided further industrial unrest and disputes and has really

given

effect to the underlying object of the reference.

474 SUPUMB COU.T J.BPOJ.n (1967) 2 S.C.R.

This brings us to the last question which is related to the dear­

ness allowance payable to the monthly-rated workmen. Previous

to the present Award the dearness allowance

was payable in this

company

in

the following manner ;

"On the !st Rs. 100-(upto Rs. 100) 60 per cent with a

On the 2nd Rs. 100-(upto Rs. 200)

On the 3rd Rs. 100-(upto Rs. 300)

On the 4th Rs. 100-(upto Rs. 400)

On the 5th Rs. 100-(upto Rs. 500)

On every hundred above Rs. 500-of

basic

minimum

of the

D.A. paid to the

Textile Operatives

by

the Bombay

Mill­

owners' Association.

20 per cent of the

2nd hundred rupees.

15 per cent of the 3rd

hundred rupees.

10 per cent of the 4th

hurrdred rupees.

I 0 per cent of the 5th

hundred rupees.

5 per cent

of every

hundred rupees.

The above percentage

of dearness allowance is applicable

when the Bombay Cost

of Living Index rests between 311 to

320. Variation in the above percentage to be allowed per 10

p.oint movement in the index. First slab-3 per cent of dearness

allowance ; 2nd slab I j per cent of dearness allowance; 3rd

slab 1 per cent

of dearness allowance ; 4th slab

: per cent of

dearness allowance and the last slab ! per cent of the

dearness allowance."

In the Award this has been altered to a scheme which

is as follows ;

On

the first Rs. 100 basic pay (upto

Rs. 100) 60%

On the second Rs. 100 basic pay (upto 35 % of the 2nd 100

Rs. 200) rupees.

On the third Rs. 100 basic pay ( upto 15 % of the 3rd I()()

Rs. 300) rupees.

On the Rs. 301 basic and above 10 % of the balance.

NOTE : The minimum dearness allowance will be the revised

teAtile scale.

The above percentage

of dearness allowance is

applicable when the Bombay Consumer

Prit-e

Index is hetween 311 and 320. Variation per 10

point movement in the index should be as follows ;

A

B

c

D

E

'

G

H

A

B

c

D

E

F

KAMAN! METALS v. WORKMEN (Hidayatullah, l.) 475

First slab of Rs. 100 basic pay

Second slab of 100 basic pay

Subsequent slabs

5 % (e.g .. dearness

al­

lowance will be 65 %

of basic pay when

index

is between 321

and 330).

li%

1 %".

It is contended that linking the dearness allowance, after the con­

sumer price index 321 to wages has made a departure from the

fixation

of dearness allowance fixed in the Kamani Engineering

Corporation

in which, under the same circumstances, the

per­

centage after the consumer price inc;lex of 321 is that of the dear•

ness allowance and not of the basic salary. On the other side,

we were shown a number of awards in which dearness

allowance has been fixed in the same manner as by this Award.

It appears that the case

of Kamani Engineering was treated as a

special case because the incentive bonus there

was yielding a third

of the total earnings of the workmen and it was considered that

if the dearness allowance

was also raised then a very great burden

would

be thrown upon the employer by reason of the incentive

bonus.

We cannot, therefore, use the precedent of the award in

the Karnani Engineering Corporation because

of these special

facts.

We are satisfied that in many other companies dearness

allowance has been ordered to

be calculated in the same manner

as has been done by this Award and we see no reason, therefore,

to interfere.

For these reasons

we find no force in this appeal. It fails and

will be dismissed with costs.

V.P.S. Appeal dismis~d.