1. The only controversy which is raised before us in this appeal is whether the appellant (original petitioner) (referred to hereafter as 'the Company') is liable to pay dearness allowance with retrospective effect from 1st January, 1968 to its daily rated workmen employed in its wadala factory.
2. The facts leading to this appeal are as under :
(A) The Company carries on certain manufacturing business, one of its factories being at Wadala. By its latter dated 2nd January, 1965 addressed to the Company, the employees' union demanded in respect of the daily rated workmen at the Wadala factory, a revision of wage scales with effect from 1st January, 1964, in the alternative wage scales based on certain daily rates. Pertaining to dearness allowance, the demand was as under :
'2. Dearness allowance : Existing scale of dearness allowance should be revised and the workmen should be paid dearness allowance on the following basis with effect from 1st January, 1964.' (B) After the conciliation officer submitted his failure report, the demands were referred to the Conciliation Board on 15th November, 1965. On 15th March, 1967, the Board submitted its failure report; at that time, however, the re-commendations of the Central Wage Board were awaited. On 28th September, 1967, the company expressed its willingness to implement the final recommendations of the Wage Board as accepted by the Government of India. Reference to adjudication was thereupon not made and the company was requested by Government letter dated 7th November, 1967 to implement the final recommendations of the Wage Board as may be accepted by Government of India. This was done.
----------------------------------------------------------------------Pay Slab Rate of dearness allowance when theconsumer price index in Bombay Variation perCity is between 480-490. 10 points.----------------------------------------------------------------------Rs. 1 to 100 150 per cent of the basic pay or revised 5 per cent.textile scale for all days in a monthplus 20 per cent whichever is higher.Rs. 101 to 200 As above plus 65 per cent of the basic 2 per cent.pay on 2nd hundred.Rs. 201 to 300 As above plus 45 per cent of the basic 1 per cent.pay on 3rd hundred.Rs. 301 and As above plus 30 per cent of the basic 1 per cent.above pay above 3rd hundred.---------------------------------------------------------------------- (c) On 26th April, 1968, the union submitted its revised demands directly to the Government as follow :
'(i) Whether the daily rated workmen from the Wadala factory of the petitioners were entitled to receive dearness allowance at the same scale i, e., the scale given to the monthly rated staff of the scale given to the retrospective effect from 15.11.1965 ?' On 5th July, 1968 a reference order was made by Government to the Tribunal.
(D) That reference order was challenged by the Company in this Court in Miscellaneous Petition, 708 of 1968, on the ground that no dispute was in existence. Those proceedings terminated on 27th February, 1973 by a consent order to which the union was a party. That consent order reads thus :
'By consent, the order Ext. O dated 5.7.1968 is set aside without prejudice to the rights of the respondents to refer fresh dispute in respect of the same demands according to law.' (E) On 19th March, 1973, the union submitted to the company the following demand :
'All the daily-rated workmen from Wadala factory of the company should be paid D.A. at the same scale that is given to monthly-rated staff of the factory with retrospective effect from 15th November, 1965, i.e., at the rate given below : -----------------------------------------------------------------------Slab salary D.A. at index 311 to 320 Variation for 10points.-----------------------------------------------------------------------Up to Rs. 100/- 65% of basic salary or revised 5%textile scales for all days ofmonth whichever is higherRs. 101 to 200 30% 2%Rs. 201 to 300 15% 1%Rs. 301 and above 10% 1%----------------------------------------------------------------------- (F) On reference of the dispute to the Tribunal, an award was passed on 3rd January, 1977 directing the company to pay the daily-rated workmen in its Wadala factory dearness allowance at 115% of the revised textile rate with effect from 1st January, 1968.
(G) This retrospective grant of dearness allowance from 1st January, 1968 was challenged by the company in Miscellaneous Petition No. 627 of 1977 filed in this Court. By a speaking order the petition was summarily rejected. Hence the present appeal.
3. On behalf of the company it was urged by its learned counsel Mr. Khambatta that in awarding dearness allowance retrospectively from 1st January, 1968, the Tribunal had committed an error apparent on the face of the record and had acted contrary to the authoritative decisions of the Supreme Court. Mr. Khambatta elaborated that the Tribunal had exceeded, and had exercised untrammelled jurisdiction in awarding dearness allowance with retrospective effect from 1st January, 1968, inasmuch as the only discretion vested in Tribunal was to award dearness allowance between 19th March, 1973 when the demand was made and the date of the award.
4. On the other hand, it was urged by Mr. Desai, the learned counsel appearing on behalf of the union, that it had not been contended before the Tribunal that it had no jurisdiction to grant dearness allowance with retrospective effect prior to 1973. Mr. Desai further urged that the demand for dearness allowance had not been made for the first time by the union on 19th March, 1973, but had been in existence from 1965, with the result that the Tribunal correctly exercised its jurisdiction in awarding dearness allowance with retrospective effect from 1st January, 1968.
5. In support of his contentions Mr. Khambatta relied on certain decisions of the Supreme Court, a decision of the Calcutta High Court and of a Division Bench of this Court. In Sindhu Resettlement Corporation Ltd. v. Industrial Tribunal of Gujarat, : (1968)ILLJ834SC , it was observed by the Supreme Court that an industrial dispute, as defined, must be a dispute between employers and employers, employers and workmen and workmen and workmen, that the Government must come to an opinion that an industrial dispute does exist and that opinion that an industrial dispute does exist and that opinion can only be formed on the basis that there was a dispute between the employee and the employer. It was held that if no dispute at all is raised by the employees with the management, any request sent by them to the Government would only be a demand by them and would not be an industrial dispute between them and their employer.
6. In Jhagrakhand Collieries (Private) Ltd. v. Central Government Industrial Tribunal Dhanbad, 1960 II L.L.J. 71, which was a case of retrospective applicability to a certain notification issued by the erstwhile Korea State, it was held by the Supreme Court that as the respondents did not make a specific claim until September 1982, it would not be fair or just to allow them the benefit of the increase directed by the award even prior to the date of the demand.
7. In Workmen of new Egerton Woollen Mills v. New Egerton Woollen Mills 1969 II L.L.J. 782, it was observed by the Supreme Court at P. 791 of the report as under :
'As regards the date on which the award should come into force, industrial tribunals have treated the date of demand and the date of the award as two extreme points. The tribunals, however, have discretion to fix any intermediate date depending upon the circumstances ......'
8. The next authority relied on by Mr. Khambatta was the decision of the Calcutta High Court, in Howrah Municipality v. Second Industrial Tribunal, West Bengal 1965 I L.L.J. 382, where it was held that where the demand for arrears of increment was for the first time collectively in August 1957, the Tribunal could not direct the benefit of such arrears for the period prior to August, 1957 as it would amount to entertaining a stale claim.
9. In Bharat Cotton Growers' Cooperative Spinning Mills Limited, Sangli v. Miraj Taluka Girni Kamgar Sangh : (1979)ILLJ487Bom , where in a dispute relating to the grant of dearness allowance, the Tribunal granted relief from a date anterior to the date of actual demand, it was held by a Division Bench of this Court that no relief prior to the date of demand ought to have been granted by the Tribunal and that the relief must be restricted from the date of the date of the actual demand itself.
10. With these decisions of the Supreme Court, the Calcutta and Bombay High Courts in the forefront, there is much to be said in favour of the contentions urged by Mr. Khambatta. To start with, on the ratio laid down by the Supreme Court in the Sindhu Resettlement case (supra), it is manifest that the union's demand of 26th April, 1968, which admittedly was never submitted to the company but was submitted by the union only to Government, was at best a request sent by the union to Government without the same being an industrial dispute between the workers and the company. It may be recalled that the challenge levelled by the company in its earlier writ petition to the reference made by the Government to the Tribunal, was on the ground that no dispute was in existence. Mr. Khambatta is correct when he says that a dispute would have arisen if those demands had been submitted by the union to the company (which admittedly was never done) and had been resisted by the company. No doubt, realising this situation it was by consent of parties that in the company's earlier writ petition the order was passed on 27th February, 1973. It is in this conjunction that the consent order dated 27th February, 1973 must be read and analysed.
11. That order reproduced in para 2(d) above, passed by consent of parties including the union, while setting aside the impugned reference order dated 5th July, 1968 entitled the respondents to refer 'fresh dispute' in respect of the same demands according to law. The words 'fresh dispute' are important, for in on uncertain terms do they indicate that prior or existing disputes, if any, were to be treated as non-existent or wiped out and that what would be open to the union to raise with the company would be a 'fresh' dispute, be it in respect of the same demands. Thus Mr. Desai's contention that the demand for dearness allowance was in existence from 1965 can avail the union nothing. To start with, the demands of 1965 were admittedly never referred for adjudication as the company had agreed to implement the final recommendations of the Wage Board as accepted by the Government of India, which the company did, However, even assuming that the demand for dearness allowance was in existence since 1965, even so what the consent order entitled the union to do was not to rake up a stale dispute of 1965 or for that matter of 26th April, 1968, but to raise a 'fresh' dispute, be it in respect of the same demands, and that is exactly what the union did on 19th March, 1973, as envisaged by the consent order of 27th February, 1973. It was, in the result, this fresh dispute which resulted in impugned award of the Tribunal. It is thus the phraseology of this consent order to which the union was a party, that goes to the root of the present controversy and must negative the contention urged by Mr. Desai.
12. In the light of these events, was it permissible for the Tribunal in the teeth of the decisions of the Supreme Court, to have awarded dearness allowance with retrospective effect even prior to the fresh dispute raised by the union on 19th March, 1973 Following the ratio of the Supreme Court in Jhagrakhand Collieries case 1960 II L.L.J. 711, the New Egerton Mills case 1969 II L.L.J. 782 and the ratio of the Division Bench of this Court in Bharat Cotton Growers case (supra) we cannot but come to the conclusion that it was impermissible for the Tribunal to have awarded dearness allowance retrospectively from 1st January, 1968 and thereby gone far beyond the date of the demand made by the union namely, 19th March, 1973. As laid down by the Supreme Court in New Egerton Mills case (supra), the Tribunal could exercise its discretion in awarding dearness allowance by fixing, in the words of the Supreme Court, 'any intermediate date' between the two extreme points, namely, in the present case 19th March, 1973 being the date of the demand culminating in a 'fresh dispute' and the date of the award, namely, 3rd January, 1977. Needless to say, if the Tribunal had done so, no possible exception could have been found or taken. The Tribunal, however, went even prior to 19th March, 1973 and thereby exceeded its jurisdiction or exercised jurisdiction not vested in it and thereby acted contrary to the decisions of the Supreme Court itself.
13. Mr. Desai's grievance that the company had not urged before the Tribunal that it had no jurisdiction to grant dearness allowance with retrospective effect prior to 1973 seems to be based on some misconception. As is clear from para 14 of the award, while the union's contention was for payment of dearness allowance with effect from 15th November, 1965 the consistent stand taken by the company before the Tribunal was that if at all any revision was to be allowed it should be prospectively and not retrospectively. So also is there no merit in Mr. Desai's contention that it is not open to Mr. Khambatta to take exception to the retrospective grant of dearness allowance from 1st January, 1968 because it was not urged by him before us that to pay the same would be a burden on the company. What Mr. Desai seems to suggest is that as the company can afford to pay the amount directed by the Tribunal, no case has been made out by the company for interference with the award. It is correct that except for a statement across the Bar that the company is in financial difficulties, no argument was advanced by Mr. Khambatta on the question of burden, and rightly so, because the challenge to the award was confined to its retrospective operation and particularly so from 1st January, 1968. However, even assuming the company is in a position to pay the dearness allowance retrospectively from 1st January, 1968, even so it would be a case for interference, as the Tribunal has failed to take into account the principles laid down by the Supreme Court itself.
14. In the result, the order passed by the Tribunal in para 20 of the award is modified by the substitution of the words 'from 19th March, 1973' for the words 'from 1st January, 1968'. There will be no order as to costs.
15. Mr. Desai makes an oral application for leave to appeal to the Supreme Court. In disposing of this appeal we have followed the judgments of the Supreme Court itself Mr. Desai's application is rejected.
16. On Mr. Desai's application, Bank guarantee given by the company not to be discharged for a period of three months from today.