G.N. Vaidya, J.
1. In this petition under Arts. 226 and 227 of the Constitution of India the petitioners, Messers. Western India Theatres Limited, challenged the legality and correctness of an award dated October 27, 1969 passed by the Industrial Tribunal, Maharashtra, Bombay in Reference (IT) No. 4 of 1968. The said reference was made to the Tribunal by the Government of Maharashtra under S. 10(1)(d) of the Industrial Disputes Act, 1947 in respect of demands of the employees of the petitioners working in the New Empire Cinema at Bombay. The demands were for revision of wage scales with effect from June 1, 1966, adjustment increments, extra show allowances at the revised rates, officiating allowances, revision of provident fund contribution, gratuity, bank holidays, etc. which were classified as 23 demands by the Tribunal. Taking into consideration the rival contentions of the parties and the materials placed before the Tribunal, the Tribunal classified the New Empire Cinema as belonging to A1 class. On the basis of this classification, the Tribunal proceeded to pass an award substantially in terms of a settlement arrived at between the Theatre Employees' Union, Bombay, a registered trade union of employees working in cinema theatres in Bombay, respondent No. 2 in the petition, and the owners of 60 cinemas out of 80 cinemas in Greater Bombay, who are members of an association known as the Cinematograph Exhibitors Association of India (hereinafter referred to as the 'C.E.A.I.').
2. It is unnecessary to set out all the findings of the Tribunal recorded in the aforesaid award because the award is challenged in the above petition only on the following grounds :
(1) The Tribunal erred in holding that the C.E.A.I. had classified the New Empire Cinema as 'A1' cinema house and in proceeding to pass an award on the basis of the classification of the cinema as 'A1' class cinema house.
(2) The Tribunal erred in reducing the minimum qualifying period for entitling an employee to gratuity in case of voluntary retirement or resignation.
(3) It was an error to grant extra wages in relation to five bank holidays although the bank holidays were not granted.
(4) The Tribunal erred in interfering with the internal management of the petitioners by giving a direction that disciplinary action should be taken against the erring employees in accordance with rules made by C.E.A.I. amended from time to time with the approval of the union.
(5) It was an error to fix wage scales of the employees of the New Empire Cinema treating it as comparable to the other air-conditioned large cinema theatres classified by C.E.A.I. as 'A1', without considering the financial capacity of the petitioners.
(6) The Tribunal erred in law in giving retrospective effect to the award with effect from January 1, 1967 without taking into consideration the financial burden imposed on the petitioners.
Mr. Sawant, the learned counsel for the petitioners rightly conceded that grounds Nos. 2, 3 and 4 mentioned above cannot survive in view of our judgment in petitioners' Special Civil Application No. 2496 of 1969 dated June 30, 1970 concerning the dispute between the Strand Cinema and its employees. He, therefore, submitted that inasmuch as the said grounds were urged in respect of the Strand Cinema and except in the matter of disciplinary action, they having been rejected, the decision in that case would cover the present dispute between the New Empire Cinema and its employees in so far as the said grounds are concerned. With respect to the grounds regarding the rules of disciplinary action, Mr. Sawant submitted that just as in the case of the Strand Cinema, the order of the Tribunal was modified by deleting the words 'as amended from time to time with the approval of the employees' upon', the award in the present case also should stand modified on similar terms. Mr. Dudhia, the learned counsel for the respondents Nos. 2, 3 and 4 conceded that this would be the position so far as grounds Nos. 2, 3 and 4 referred to above are concerned.
3. Mr. Sawant, however, seriously urged that the Tribunal committed an error apparent on the face of the record in holding that the New Empire Cinema was classified by the C.E.A.I., though in fact the owners of the New Empire Cinema were not members of the C.E.A.I. and the C.E.A.I. had never classified the theatre as 'A1'. Mr. Sawant, therefore, submitted that the entire award is vitiated by this patent error committed by the Tribunal in proceeding to dispose of the dispute as if the New Empire Cinema was classified by C.E.A.I. as A1.
4. Mr. Dudhia, the learned counsel for the union, repelled this contention by pointing out that although the Tribunal had fallen into an error in assuming that the C.E.A.I. had classified the New Empire Theatre as A1, the finding of the Tribunal was supported by the other reasons given by the Tribunal for holding that the cinema was an A1 cinema. He referred to the balance sheets and profit and loss accounts of the petitioners for 1965-66, 1966-67, and 1967-68, which are discussed by the Tribunal, and the reasoning of the Tribunal in comparing the New Empire Theatre with other similarly situated theatres in Greater Bombay as well as a settlement dated January 6, 1961 made between the Twentieth Century Fox Corporation India Private Limited and respondent No. 2 union while the said corporation was running New Empire Theatre and contended that the Tribunal was right in its conclusion that the New Empire Cinema belonged to the 'A1' class. He submitted that the principal test of classification of cinemas is the test of box office collections. On the basis of the figures supplied by the Entertainment Tax Department before the Tribunal for the years 1963, 1964, 1965, 1966, 1967 (half year), Mr. Dudhia urged that the box office collections of the New Empire Theatre made it comparable to the other A1 theatres in Greater Bombay like Regal, Metro, Eros, Maratha Mandir, Naaz, Liberty and Alankar.
5. Now it is undisputed that the C.E.A.I. and respondent No. 2 have entered into a settlement with regard to the service conditions of the employees of theatres, who are members of the said association, on the basis of the classification of theatres as A1, A and B. There is also no dispute that Metro, Naaz, Liberty, Alankar and Apsara, the owners of which are members of the association, have accepted the classification of their respective theatres as A1. It is also clear from the figures supplied by the Entertainment Tax Department that the box office collections of New Empire, which is conveniently situated near the Victoria Terminus Railway Station, is generally higher than that of Naaz, Liberty, Apsara and Alankar and even of the Maratha Mandir in some year. In any event, the Tribunal was quit in holding that these figures show that the box office collections of New Empire Cinema in 1963, 1964, 1965 and 1966 and six months of 1966-67 compared very favourably with other A1 class cinemas, viz., Regal, Metro. Eros, Maratha Mandir, Naaz, Liberty and Alankar.
6. Mr. Sawant, however, contended that Regal and Eros theatres were not members of the association and their employees were not members of respondent No. 2 union and there was nothing to show that those theatres have accepted the classification of the respective theatres as A1. He also urged that so far as Maratha Mandir is concerned, there was a dispute pending between its employees and the management and its classification as A1, as suggested by respondent No. 2 union cannot be the basis for classifying the New Empire Theatre. Even excluding Regal, Eros and Maratha Mandir from consideration, we do not find anything wrong in the reasoning of the Tribunal in comparing New Empire Cinema with the other leading cinemas in Greater Bombay, viz., Metro, Maratha Mandir, Naaz, Liberty and Alankar, and in arriving at the conclusion that the New Empire Theatre was comparable to those cinemas which were classified as A1 having regard to their respective box office collections.
7. The reasoning of the Tribunal in arriving at its conclusion is recorded in paragraph 16 of the award as follows :
'Exs. U-4 and U-5 show that the box office collections of this cinema in 1963, 1964, 1965, and 1966 and 6 months of 1966-67 compare very favourably with those of other A1 class cinemas, viz., Regal, Metro, Eros, Maratha Mandir, Naaz, Liberty and Alankar. The trial balance sheets of this cinema show that after deducting the expenditure from the gross profits there was a surplus of Rs. 62,000 in 1962-63, Rs. 83,000 and odd in the 1963-64, Rs. 79,000 and odd in the six months till 31st March, 1965, Rs. 1,52,000 and odd in 1965-66 and Rs. 1,93,000 and odd in 1966-67, (vide exhibit U-4). The seating capacity of this cinema is only 983 while that of the A1 class cinemas like Metro and Alankar and Liberty is over 1117. In spite of this it has good box office collections and its box office collections are larger than those made during the management of Twentieth Century Fox. This is clear from the Confidential Exhibits U-1, and U-2. The cinema exhibits first run English pictures and is situated in a fashionable locality. Considering this it is more than clear that the classification of this cinema with Metro, etc., as A-1 made by the C.E.A.I. is not improper or unjust. The cinema happens to be managed by a big company which is suffering losses on account of its management of other weaker units. This would not be a good and proper ground to pay to its workmen wages or other benefits lesser than those prevailing in units of a similar type in the industry in this region. Non-payment of prevailing wages these workmen would amount to creating imbalance and inequality in the matter of wages of the workmen of different units of the same industry. I, therefore find that the financial condition of the company as disclosed in the published balance sheets and accounts only cannot be relied upon as correct and cannot be a good basis. The capacity of the fair cross-section of the industry has to be taken into consideration while fixing the wages and other service conditions of this cinema. I am fortified in this view by the award of the National Industrial Tribunal at Bombay in respect of the industrial disputes of the workmen of the Banking Companies. By the award the banks have been classified in three classes, viz., A, B, and C on the basis of the working funds of each bank and not on the basis of the capacity of each units. I may again mention that the classification of this cinema into A1 class had been, in effect, adopted by the former management while fixing the workmen's service conditions in 1961 and it has been also followed by 50 cinemas in this region by entering into several agreements on the lines of the C.E.A.I. agreement.'
It is true that in the process of reasoning, the learned Tribunal has slipped and observed that the C.E.A.I. has classified the new Empire Cinema as A-1. But merely because of the slip, the entire reasoning and conclusion of the Tribunal cannot be said to be vitiated, as we find that the conclusion is based on the materials on the record and arrived at after taking into consideration carefully the box office collections of the New Empire Cinema, the location of the New Empire Cinema and the seating capacity as well as the previous agreement between the Twentieth Century Fox Corporation India Private Limited and the employees of the New Empire Cinema. The contention of Mr. Sawant that the classification was made by the Tribunal on a totally misconceived basis must be, therefore, rejected.
8. Now, once the cinema is classified as A1, normally the conditions relating to the services of its employees would be governed by conditions relating to comparable cinemas in A1 class in Greater Bombay and the Tribunal, therefore, proceeded to pass the award on that basis. Mr. Sawant, however, contended that the Tribunal erred in not taking into consideration the financial capacity of the petitioners and of the New Empire Cinema while fixing the wage scale of its employees. It must be noted that before the Tribunal it was contended on behalf of the petitioners that they were willing to pay the wage scales fixed for A class Theatres under the settlement between respondent No. 2 and C.E.A.I. The Tribunal, however, considering the large seating capacity and all other factors relating to the New Empire Cinema proceeded to award wage scale on the basis of the settlement between A1 Theatres and respondent No. 2 directing that the workmen drawing wages lower than the minimum of their scales should be stepped up to the minimum of the scales and those, whose wages do not fit in at a stage in the scale, should be stepped up to the next higher stage in the new scale and also that the workmen who were receiving more than the maximum of the scale should continue to receive the same. Relying on a decision of the Supreme Court in Novex Dry Cleaners v. Its Workmen 1962 I L.L.J. 271, Mr. Sawant strenuously urged that as the demand for wages made by the employees in the present case was for fair wage and not a minimum wage, the capacity of the industry to bear the burden of the said wage scale was a very relevant and a very important factor and the Tribunal erred in ignoring the capacity of the New Empire Cinema and its management and in relying on the settlement between respondent No. 2 and the owners of other A1 theatres without comparing the financial capacity of the petitioners and the New Empire Theatre with the financial capacity of the other theatres.
9. Now, the tribunal has taken into consideration the fact that the petitioners are owning and managing not only the New Empire Theatre but other less profitable theatres in Bombay and elsewhere. The Tribunal held that it would not be proper to take into consideration the financial capacity of the petitioners as a whole relating to their entire business. The Tribunal, therefore, chose to rely only on the profit and loss accounts in respect of the New Empire Theatre. We do not think that the course adopted by the Tribunal in the facts and circumstances of the case was in any manner unreasonable or illegal. It is undisputed that the present dispute is between the petitioners and the employees working in the New Empire Theatre and not a dispute between the employees of the petitioner as a whole. The relevant unit for considering the financial capacity of the petitioners in this behalf would be the New Empire Theatre.
10. Moreover, it is now well settled that even while fixing the fair wages, the Tribunal can take into consideration a comparable unit of the cross-section of the industry and fix the fair wages on the basis of industry-cum-region. See Express Newspapers (Private) Limited v. Union of India : (1961)ILLJ339SC , and The Workmen of Shri Bajrang Jute Mills Ltd. v. The Employees of Shri Bajrang Jute Mills Limited, : (1970)IILLJ6SC . Mr. Sawant submitted that the decision of the Supreme Court in Workmen of New Egerton Woollen Mills v. New Egerton Woollen Mills and others 1969 II L.L.J. 782, indicated that in all cases of fixing fair wages, it was the duty of the Tribunal to take into consideration the financial capacity of only the unit in respect of which the dispute had arisen. This submission of Mr. Sawant is not supported by what has been laid down in that case. In fact the previous decisions of the Supreme Court relating to fixation of fair wages were reviewed in that case and Shelat, J. observed at pages 788 and 789 :
'A number of decisions both of this Court as also of Industrial Tribunals have laid down that two principle factors which must weigh while fixing or revising wage scales and grades are : how the wages prevailing in the establishment in question compare with those given to workmen of similar grade and scale by similar establishments in the same industry or in their absence in similar establishments in other industries in the region and what wage-scales the establishment in question can pay without any undue strain on its financial resources. The latter question does not arise in the present case as the financial capacity of the company has, for the reasons aforestated, not been disputed. In considering the first question, the Tribunal has first to ascertain whether there are comparable concerns in the same industry in the region. In doing so, it has to take into account the extent of business, the capital invested, the profits, the nature of business, the standing, the strength of labour force, the future prospects of the business of concerns put forward before it as comparable and other relevant facts.'
11. In the present case, as stated above, the Tribunal has compared the New Empire Theatre with other A1 theatres, has considered substantially all the relevant facts such as are referred to in the aforesaid observations of the Supreme Court and has rightly awarded the wage scale which is given to the employees of A1 theatres in Greater Bombay. We, therefore, find nothing illegal in the said order fixing the wage scale on the basis of the wage scale agreed to between C.E.A.I. and respondent No. 2 for comparable cinemas classed as A1 by C.E.A.I. and respondent No. 2.
12. The next ground urged by Mr. Sawant is that the Tribunal erred in law in giving retrospective effect to its award from January 1, 1963 in same matters. It is now well settled that the Tribunal has a discretion in the matter of giving retrospective effect. See Messrs. Hydro (Engineers) Pvt. Ltd. v. The Workmen, : (1969)ILLJ713SC . In the present case, the demands of the workers were made by respondent No. 2 on May 30, 1966 and according to them retrospective effect ought to have been given from June, 1966. The Tribunal taking into consideration what was settled between the employees and C.E.A.I., gave retrospective effect from January 1, 1967. We, therefore, do not find anything in the exercise of the discretion by the Tribunal which would justify interference by this Court with the award in this behalf in exercise of our powers under Arts. 226 and 227 of the Constitution of India.
13. Mr. Sawant further faintly urged that the Tribunal had no jurisdiction to decide the demand regarding the dispute between the Joint Manager and the petitioners. This point was not urged before the Tribunal and it cannot be allowed to be taken for the first time in this petition under Arts. 226 and 227 of the Constitution. It is also difficult to appreciate the point as the salary of the Joint Manager is fixed at Rs. 225-20-425-25-550 and there is nothing on the record to show that he was not a workman as defined by the Industrial Disputes Act.
14. For the above reasons, we find no substance in any of the grounds urged by Mr. Sawant except with regard to the grievance of the petitioners against the order regarding disciplinary action contained in paragraph 35 of the award. Following our decision in Special Civil Application No. 2496 of 1969 we modify the order contained in the said paragraph of the award by directing that the words 'amended from time to time with the approval of the Theatre Employees' Union' in the said paragraph shall stand deleted.
15. In the result, as the petitioners have failed in respect of the rest of the grounds, the petitioners should pay the costs of the petition to respondent No. 2. Rest of the respondents to bear their own costs. Liberty to the petitioners to withdraw the amounts deposited by them in this Court in pursuance of the order of this Court dated April 8, 1970 on their undertaking given through Mr. Sawant to pay the amounts so withdrawn to their employees. The bank guarantee to continue till the petitioners satisfy the award, by making payments due under the award up to the date of the award. Subject to this, the rule in Civil Application No. 1015 of 1970 discharged with costs.