1. This appeal is directed against an order of Sri Dingare, Judge of the Second Labour Court at Bombay, dated 28 November, 1958, allowing the application of the respondent union against the employer-mills for withdrawal of the illegal change it is alleged to have made in reducing the dearness allowance of workers from Rs. 1-40-0 per day to Rs. 1.37 nP.
2. The facts which gave rise to this appeal are briefly as follows. An application was filed by the union against the appellant mill stating that under a settlement dated 17 December, 1956 the parties agreed that the workers in this mill will be paid dearness allowance at the rate of 91.66 per cent of the Sholapur rate. The Sholapur rate of dearness allowance was fixed by the industrial court in References Nos. 10 and 11 of 1946 at 66-2/3 per cent neutralization and the court found that on arithmetical calculation the rate awarded comes to 1.75 pies per days per rate awarded comes to 1.75 pies per day per rise of each point in the cost of living figure over the per-war figure of 73. It is said that the appellant mill in contravention of this agreement reduced the dearness allowance from April 1958 from Rs. 1.50 which was 91.66 per cent of Sholapur rate to 1.37 nP. per day and thus committed an illegal change which the respondent union prays that it should be directed to withdraw, and be ordered to pay the difference. The employer mill in its written statement says that the Sholapur dearness allowance rate was further reduced under an award based on an agreement published in the Bombay Government Gazette, Part I-L, dated 10 April, 1958, in so far as it allowed that dearness allowance at the rate of 66-2/3 per cent neutralization or Rs. 1.50 per day whichever is less should be paid in future. The award relating to Laxmi and Vishnu Mills was published in the Bombay Government Gazette on 10 April, 1958, and the supplementary award relating to Jam Mills making the same reduction was published on 1 May, 1958. On 13 May, when both these awards reducing the rate were in force the appellant mills paid 91.66 per cent of the reduced rate at Sholapur, and has not therefore committed any illegal change.
3. The labour court held that the rate at Sholapur which was fixed at 66-2/3 per cent neutralization was not changed by these awards; the fixing of a ceiling of Rs. 1.50 nP. does not constitute a change in the rate. And also that the award did not modify the rate of dearnees allowance for all the mills in Sholapur, therefore it cannot be said that the rate of Sholapur was changed, even if fixing of the ceiling is taken to be change of rate.
4. On behalf of the appellant, the first contention raised by Sri Palkhiwala is that it cannot be said that the intention of the parties was at the time of the agreement that 91.66 per cent of the Sholapur rate prevailing at the time of the agreement should be always paid and not as modified from time to time because the agreement expressly provided as follows :
'dearness allowance at 91.66 per cent of the Sholapur rates, as may be modified from time to time ...'
He contends that the courts have always held whenever the words 'from time to time' have occurred in agreements that the parties intended the rate should change with any modification effected in the center to which they are linked. He relies on the following decisions :-
(1) Rashtriya Girni Kamagar Sangh, Barsi, v. Lokmanya Mills, Barsi, Ltd. 1951 I.C.R. 598.
(2) Mumbai Woollen Mill Kamgar Union, Bombay v. Sri Mahalaxmi Woollen Mills 1954 I.C.R. 658.
(3) Mumbai Woollen Mill Kamgar Union Dyeing and Printing Works 1956 I.C.R. 803.
5. In the first-cited case the mills at Barsi were paying dearness allowance at 75 per cent of the Sholapur rate under an award in the following terms :-
'I direct the mills at Barsi to pay dearness allowance with effect from 1 May, 1948 at 75 per cent of the rate obtaining in Sholapur mills. The mills in Barsi should go on paying at a rate which should be 75 per cent of the rate at Sholapur from time to time.'
It was held that the words 'from time to time' would not have been used if it was intended that the rate at Barsi was linked up only with the rate prevailing at the time of the agreement. The mills in that case had refused to pay 75 per cent of the revised Sholapur rate and were contending that they were not expected under the agreement to do so. This contention as stated above was disallowed.
6. In 1954 I.C.R. 658, the dearness allowance awarded to the workers in the woollen textile industry was the same as that payable to workers in the cotton textile mills in Bombay. Ten per cent increase in dearness allowance was given under an award to the cotton textile workers in Bombay. It was held by the Court, that as in the Standardization award it has been directed there if there is any change in the scale of dearness allowance paid to the employees in the cotton textile industry in Bombay by any subsequent award, agreement or settlement, such change should be made to apply to the employees in the woollen textile industry also, the employees in that industry should be given corresponding increase in dearness allowance.
7. In 1956 I.C.R. 803 it was the contention of the labour that under the industrial court award based on a settlement, all mills in textile processing were bound to pay dearness allowance at the cotton textile rate, whenever there is a revision or enhancement of the rate in textile industry. The Court repelled this contention saying, that if this was the intention then the words 'from time to time' would have been used. The settlement merely said that the mills will pay at the same rate as the cotton textile industry which means at the rate which prevailed at the time of the agreement.
8. It is unnecessary to discuss all the rulings cited by Sri Palkhiwala. It is clear from these decisions that the words 'from time to time' whenever they have occurred in an agreement for the purpose of linking up the rate of the place with some other centre, have been taken to mean that the rate in that place will vary according to the variations in the rate in the centre to which it has been linked, and when these words have been advisedly omitted, it has been held that the rate prevailing at the time of the agreement was the rate with which the rate of the place was linked up. This is also quite obvious, as otherwise these words would be absolutely redundant. The rule that no words should be taken as having been used for no purpose and being redundant, applies not only to the interpretation of statutes, but also to the interpretations of agreements and other documents. The intention to vary the rate is Sangli if modified Sholapur is further obvious from the fact that the agreement itself provides that the modified rate without any retrospective effect will be given from the same month, if the agreement is registered before 15 of such month, and from the next month if it is registered after 15. If the rate was not to change at Sangli, when there was any modification of rates at Sholapur, it was quite unnecessary to add this provision in the agreement. There can be no doubt therefore that the parties to the agreement never contemplated that the rate of Sholapur to which the rate at Sangli was linked up, was the rate prevailing at the time of the agreement, and no change in the rate at Sangli was to be made, if there was modification of the rate at Sholapur. This contention of Sri Palkhiwala is sound and must prevail.
9. The next contention of Sri Palkhiwala is that the labour court has erred in taking the view that the word 'rate' means the neutralization rate prevailing at Sholapur, and that the fixation of ceiling at Rupees 1-8-0 does not constitute a modification in that rate. The meaning of the word 'rate' if it is so narrowed down, will lead to this absurdity that it can be said, in this instance for example, that though the rate of dearness allowance remains the same the dearness allowance actually paid to the workers is reduced. The criterion by which the amount of money to be paid as dearness allowance is determined is the rate and this has been changed by the award. With this I entirely agree. The word 'rate' has been defined in the Oxford Dictionary as follows :-
'a statement of numerical proportion prevailing or to prevail between two sets of things, either or both of which may be unspecified; amount, etc., mentioned in one case for application to all similar ones; standard or way of reckoning;'
The learned Judge of the labour court in his order says that if it was intended that any change in the amount of dearness allowance in Sholapur would justify a similar change in Sangli, then the word 'amount' would have been used and not 'rate,' as the following extract from the order of the Judge of the labour count in Applications No. 97, 98 and 99 of 1958, the facts in which were similar to Application No. 96 of 1958 against which this appeal is filed, will show :-
'It is significant to notice that the expression used in fixing the dearness allowance of the workers of the companies is not 91.66 per cent of the amount of dearness allowance but 91.66 of the rate of Sholapur dearness allowance. If the expression used in the settlement had been 91.66 per cent of the Sholapur amount of dearness allowance, then the contention of the companies that they were justified in reducing the dearness allowance of their workers on the dearness allowance of the Sholapur workers being reduced would possess great force.'
According to the labour court, unless the basis of the percentage of neutralization was changed the mills in Sangli were not justified in effecting any corresponding change. By fixing the ceiling of Rs. 1-8-0 he says only the amount of dearness allowance is affected the rate which is 66-2/3 per cent neutralization of the cost of living remains the same. I am unable to comprehend how the meaning of the word 'rate' can be arbitrarily confined within those narrow limits. As Sri Palkhiwala has pointed out, it would be absurd to say that by the subsequent award the rate was not altered but the dearness allowance at a reduced rate could under the award be now paid to the workers. As the meaning of the word 'rate' given in the Oxford Dictionary, to which I have referred above, makes it clear, the word means the numerical proportion which prevails between two sets of things. If this proportion is altered, the rate is changed. The absurdity of the proposition on which the decision of the Court below is based will be further evident by the fact that if such a narrow meaning is attached to the word 'rate,' the result would be that it will not be applicable to cases where a fixed amount of dearness allowance has been laid down which is called 'flat rate.' It is unnecessary to dilate upon the matter further; in my opinion the view taken by the labour court in this regard is patently erroneous.
10. The next ground on which the decision of the labour court is based is that the amount of dearness allowance was not changed for all the mills at the time when the appellant mill effected the change. In my opinion, so far as the payment of dearness allowance for the month of April is concerned, this view is correct. There were five mills in Sholapur, Lakshmi, Vishnu, Jam, Sholapur and Narsinggirji. It is common ground that the Narsinggirji Mill was defunct at the time when the change complained of was made by the appellants. The Sholapur Mill was also closed in March 1958 as the learned Labour Judge has himself stated in his order. This being the position, unless the rate of all the surviving mills was changed and was uniform, there would be no justification for the Sangli Mills to alter their rate. Sri Palkhiwala contends that though the award for Jam Mills was published on 1 May, 1958, it cannot be said that the rate at Sholapur was not altered by the modification award published in regard to Vishnu and Lakshmi Mills on 10 April, 1953 because this change was intended to be for the whole region and as a matter of fact agreement to adopt the same rate was signed in April by the Jam Mills. The fact that the award was not published till later makes no difference. I cannot agree with this contention because the rate at Sholapur means the rate applicable in general to all mills. Merely because the rate has been changed in the case of majority of mills, it cannot be said that the Sholapur rate has been modified. Sri Nargolakar argues that if this principle is accepted then there was no change in Sholapur rate because though Sholapur mill was closed workers who were still engaged in it were paid dearness allowance at the old rate. I do not agree. After closure, for winding up the business and various other purpose, many workers are often retained; this does not mean that such concerns may be taken as functioning and not closed. Sri Nargolakar says that the rate at which these workers who were working in Sholapur Mills after closure were paid cannot be ignored in this manner because the employer-mill even during this period was bound under the law to pay to those workers at the same old rate. This may be so but it makes no difference. The rate of dearness allowance at any centre means the rate at which it is paid in active units, and not in defunct ones. It is the active units alone which constitute an industry. Sri Nargolkar also urgues that in any case after December when the Sholapur Mill started working and the maximum dearness allowance in that mill was fixed at Rs. 1-4-0, it cannot be said that from that month onwards there was any uniform rate at Sholapur and there being no uniformity in the present rate, the rate which prevailed at the time of the agreement should be considered as the rate according to which the Sangli workers could claim the dearness allowance. As the present case is in regard to the payment for the month of April 1958, only I do not like to give any opinion regarding this matter as this may prejudice the case of the party against whom such view may be, if the dispute is raised regarding payment of dearness allowance for December 1958 of period subsequent to it.
11. Another point raised by Sri Nargolkar is that in the application made by the Sholapur Mills on which the modifying award was passed the demand of the employer was only for reduction to 40 per cent. neutralization and that if the cost of living index goes down to 347 or less, the dearness allowance of Rs. 1-8-0 fixed will be more than what the employer has demanded; as the Court has no jurisdiction to award anything more than is demanded by any party, the modifying award is void. Even if it is granted that if the cost of living index is at 347 or less at the demanded rate the dearness allowance would be more I do not think that this award can be considered void for that reason. If the Court had granted a rate less than 40 per cent neutralization, this objection might have been valid, but the existence of a very remote possibility of such a contingency arising cannot vitiate the award. The parties judging form the past experience and existing circumstances considering rightly that such a contingency is not likely to arise have come to an agreement on which the award was passed. In my opinion the Court in passing it has not exceeded the terms of reference. This objection has no force, and cannot be entertained.
12. According to the view that I have expressed above, regarding the various points raised by the parties the payment of dearness allowance at the rate of Rs. 1.37 nP. for April 1958, is an illegal change. According to the agreement the rate of dearness allowance payable at Sangli should only very according to the modified rate at Sholapur if the modified rate is published before the 15 of that months. Since till the 15 April only the dearness allowance of two mills out of three was revised, it could not be said that the rate of Sholapur was modified at that time and therefore the employer mill at Sangli was not justified in reducing its rate. After the publication of the award relating to the third mill the position would be different. As according to the union this case is only confined to illegal change for the month of April by payment of Rs. 1.37 nP., the order under appeal is upheld and the appeal is dismissed.