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Indian Oxygen Ltd. Vs. Industrial Tribunal and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Judge
Reported in(1978)ILLJ302Del
AppellantIndian Oxygen Ltd.
Respondentindustrial Tribunal and ors.
Cases ReferredKillick Nixon Limited v. Killick and Allied Employees
Excerpt:
- - i have no doubt that the contention is well-founded provided the previous industrial award is binding on the factory workers. however, on behalf of the management it was urged that the factory workers were no longer members of the union, because another union, called the indian oxygen karamchari sangh had been formed in 1967-68, which bad been recognised as the union of the factory workers by the management in 1970. this contention was accepted. ..clearly, if the award has become binding on the factory workers, it continues to bind them for a period of one year. one may well ask :what was the determination in the previous award regarding the factory workers? if there was a previous award, then no doubt, the award under question would be without jurisdiction as the reference would.....d.k. kapur, j.1. the industrial tribunal, presided over by shri d.d. gupta, made an award dated 22nd october, 1974, on a reference made under section 10(1)(d) of the industrial disputes act, 1944. the terms of the reference were as follows:whether dearness allowance payable to all categories of workmen employed in factory including general staff (employed in delhi branch) should be linked with consumer price index for industrial workers in delhi prepared by labour bureau, simla, from 1st july, 1973 as has been done in the case of office staff in delhi branch in pursuance of the award of the industrial tribunal in i.d. no. 40 of 1970 and what directions are necessary in this respect?it is apparent from the wording of the reference that the question referred to the tribunal referred to an.....
Judgment:

D.K. Kapur, J.

1. The Industrial Tribunal, presided over by Shri D.D. Gupta, made an award dated 22nd October, 1974, on a reference made under Section 10(1)(d) of the Industrial Disputes Act, 1944. The terms of the reference were as follows:

Whether Dearness Allowance payable to all categories of workmen employed in factory including general staff (employed in Delhi Branch) should be linked with consumer price index for industrial workers in Delhi prepared by Labour Bureau, Simla, from 1st July, 1973 as has been done in the case of office staff in Delhi Branch in pursuance of the award of the Industrial Tribunal in I.D. No. 40 of 1970 and what directions are necessary in this respect?

It is apparent from the wording of the reference that the question referred to the Tribunal referred to an earlier award being the one made by the Industrial Tribunal in respect of office staff employed by M/s. Indian Oxygen Limited. The only question to be decided on this reference, was whether the Dearness Allowance should be linked with the consumer price index for industrial workmen in Delhi with effect from 1st July, 1973, as had been done in the previous reference in respect of the office staff in the Delhi Branch The Tribunal's award on this reference, was that the Dearness Allowance payable to workmen employed in the factory including the general staff should also be linked with the consumer price index for industrial workmen in Delhi, with effect from 1st July, 1973. In other words, the same principle should apply to workmen in factory as in the office.

2. Being aggrieved by the award. M/s. Indian Oxygen Limited, instituted the present petition under Articles 226 and 227 of the Constitution, praying that the award may be quashed by the issue of a writ of certiorari or any other appropriate writ. The case of the petitioner is that this award could not have been made because the scope of the previous award also included the claim of factory workers It is urged that for certain reasons which would be apparent later, the office workers got the award in their favor, but the factory workers' claim was not allowed Hence, by implication, the previous award has disallowed the claim of the factory workers with the result that the previous award operates as rest judicata. It is further submitted that the previous award cannot be varied while it is in force. I will examine the full scope of this contention shortly. The alternative case of the petitioner is that the award under challenge is not in accordance with law, because the result achieved is unreasonable. It may be mentioned, that previously the Dearness Allowance being paid to the workers in the factory, and also to office workers, was linked to the cost of living index prevailing at Calcutta in accordance with the Scheme of the Bengal Chamber of Commerce and Industry. The Dearness Allowance payable to the workers varied according to changes in that index. It is contended that if another cost of living index is to be substituted, then some variations have to be made regarding the way the linking is to be done, a more substitution of the index prevailing in Calcutta by the index prevailing in Delhi is not sufficient. This question has many facts; and indeed, involves some basic questions which I will state, though for reasons I will set out later, the point cannot be adequately gone into in these proceedings nor can any relief be granted in the manner the petitioner seeks.

3. Turning to the first question, the previous award was also given by the Industrial Tribunal, Delhi, which was then presided over by Sri R.K. Baweja. The terms of reference appearing from that award were as follows:

Whether the Dearness allowance in respect of workmen employed in Delhi Branch should be linked with the Consumer's Price Index for industrial workers in Delhi as computed by the Labour Bureau, Simla and if so, what directions ate necessary in this behalf''?

The scope of that reference apparently covered all workmen in the Delhi Branch. However, after the Industrial Tribunal had decided that the linkage with the Bengal index should be substituted by the Delhi Index, it was urged on behalf of the management that the linkage should apply only to the office staff and not to the factory staff. I will reproduce the relevant portion of that award, a copy of which is also filed in this Court. It was said:

23. It was next submitted by Shri Khullar that any change which is directed to be made in this reference by the Tribunal would apply to the office staff of the management and not to the factory staff inasmuch as the union which has sponsored this case is of the office staff and not of the factory workers Shri Madan Mohan on the other hand submitted that the reference was for all the workmen of the management, whether in the office or in the factory who are posted at Delhi. My attention was drawn in this connection by Shri Khullar to the statement dated 3rd December, 1970 made by Shri D.R. Vig, W.W.1, who was the general secretary of the union. In that statement Shri Vig admitted that this union was formed in 1953-54 and all the employees including the factory workers were its members This union was recognised by the management in 1955 and there was no other union of the employees functioning at that time. The second union, namely, the Indian Oxygen Karamchari Sangh came into existence in 1967-68 and the factory workers became the members of that Sangh. The Sangh was also recognised as the union of the factory workers by the management in 1970 Shri Vig, continued that his union continued to be recognised by the management as representing the office staff. In his cross-examination Shri Vig deposed that the demand of his union was now on behalf of the employees of the management including the factory workers, but in the same breath he added that he did not represent the employees who are members of the Sangh. He further stated that he was not pursuing this reference on behalf of the Sangh which represents the factory workers This being so, it cannot be said that this union represents the factory workers So, it will not be desirable and proper to make the decision arrived at in this award applicable to the factory workers when their union namely, Indian Oxygen Karamchari Sangh never made any application during the pendency of these proceedings that it should be made a party. Nor did it make an application that the benefits which may accrue to the office staff may also be made applicable to the factory workers This being so, this award will only apply to the workmen employed in the office of the management at Delhi including the class IV employees.

It is clear from this passage in the award that the linkage was not accepted in leaped of the factory staff merely because the factory workers were not represented by the union which was pursuing the reference. In no sense can it be said that it was held that the linkage should be made only in respect of the office staff and not in respect of the factory staff on the merits. thereforee, the award, if I may say so, did not at all hold that the factory workers were not entitled to get the Dearness Allowance linked to the Delhi index as opposed to the Bengal index.

4. Dr. Anand Prakash, learned Counsel for the petitioner submits that Section 18(3) of the Industrial Disputes Act, 1947, shows that once an award has been made, it is binding on all the parties to the Industrial dispute. He also relies on Section 19(3) to submit that once the award has become binding on all the parties to the dispute, it remains binding for a period of one year and then notice has to be given by a party bound by award intimating an intention to terminate the award. In short, the submission is that if the award is binding on the factory workers then it continues to bind them until the award is somehow suspended by giving a notice under Section 19(6) of the Act. I have no doubt that the contention is well-founded provided the previous industrial award is binding on the factory workers.

5. For the purpose of ascertaining whether the previous award is also binding on the factory workers, it is necessary first to refer to Section 18(3) of the Act. It reads:

A settlement arrived at in the course of conciliation proceedings under this Act or an arbitration award in a case where a notification has been issued under Sub-section (3A) of Section 10A or an award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on--

(a) all parties to the industrial dispute;

(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, Arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause;

(c) Where a party referred to in Clause (a) or Clause (b) is an employee, his heirs, successors or assigns in respect of the establishment to which the dispute relates;

(d) where a party referred to in Clause (a) or Clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part.

It is apparent from the language used in this provision, that the award of an Industrial Tribunal is binding on all parties to the dispute. Obviously, the terms of the previous reference were wide enough to include factory workers and, hence it can be legitimately urged that the award is binding also on the factory workers. The provisions of the Section are wide enough to include also any party summoned to appear in the proceedings, hence, even if the factory workers were merely summoned, they would be bound by the award. On the basis of this provision, it can be said that the factory workers are bound by the award. In fact, the contention of Mr. Madan Mohan before Shri Baweja was that the award should bind all the workers whether in the office or at the factory. However, on behalf of the management it was urged that the factory workers were no longer members of the union, because another union, called the Indian Oxygen Karamchari Sangh had been formed in 1967-68, which bad been recognised as the union of the factory workers by the management in 1970. This contention was accepted. thereforee, it was the management's own contention that the union which was contesting the case before Shri Baweja did not represent the factory workers. Having taken this stand at the time the matter was being dealt with by the Industrial Tribunal and this stand having been accepted, I cannot see how the award can now be held to be binding on the factory workers. I have already set out the portion of the award in which the contentions of the two parties have been examined by the Industrial Tribunal. It is also necessary to refer to paragraph No. 2 of the award wherein it is stated as follows:

After the receipt of the order of reference, notices were issued to the parties. The union filed a statement of claim on the 25th of August, 1970 and the written statement was filed by the management on the 28th September, 1970....

Thus, the only parties to the reference were the management on the one hand and the union on the other. It was the case of the management that the union did net represent the factory workers. It would, thereforee, follow that in spite of the language of Section 18(3) it having been urged by the management of the petitioner that the union did not represent the factory workers, the Industrial Tribunal accepted this contention and held that in fact the only parties before the Tribunal were the office workers on the one hand and the management on the other. On this basis, no award was given in respect of factory workers.

6. It is provided in Section 19(3) of the Act as follows:

An award shall, subject to the provisions of this section remain in operation for a period of one year from the date on which the award becomes enforceable under Section 17A:

Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit....

Clearly, if the award has become binding on the factory workers, it continues to bind them for a period of one year. Thereafter, by reason of Section 19(6) the award is to continue to bind the factory workers if they are parties until they have given a notice intimating that they want to terminate the award. These provisions only apply if the award is in fact binding on the factory workers. As I have said, the previous award proceeded on the basis that it did not bind the factory workers because they were not represented by the union; it is not possible to refute the stand now. The conclusion binds the petitioner also.

7. In this respect, the definition of award' in the Industrial Disputes Act can be use fully referred to. It is defined in Section 2(b) as follows:

'Award' means an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Industrial Tribunal and includes an arbitration award made under Section 10A

In order that a document should be an award, it should also finally determine the dispute. One may well ask : what was the determination in the previous award regarding the factory workers? An examination of the award shows that there was no determination. In fact it was not held that the Delhi Cost of Living Index would apply or not apply in place of the Bengal Cost of Living Index. Nor was it held that the Bengal Index would continue to apply. In fact, the Tribunal did not decide the point at all one way or the other. This is not a determination, let alone a final determination. I am, thereforee, of the view that the previous award was limited to the office workers only and there was mo award regarding the factory workers. This being so, there was no bar to the second reference which was restricted to a consideration of the question whether the same principles regarding Dearness Allowance as were settled by Shri Baweja's award should also apply to factory workers. I may mention that this objection was also raised in respect of the maintainability of the second reference by means of certain preliminary objections raised before the Industrial Tribunal. At that time, Sri R.K. Baweja, who gave the first award was also the Industrial Tribunal for the purpose of the second reference. He framed certain preliminary issues which were dealt with by an order passed on 11th February, 1974, which is attached to the Writ Petition as Annexure V. By that order, it was held that there was no rest judicata because the parties to the first reference were not the same as the parties to the second reference. It was also held that there was a demand or dispute raised by the Indian Oxygen Karamchari Sangh which had led to the second reference. I have examined the reasons given by the Industrial Tribunal in its order and find that the Industrial Tribunal gave adequate reasons for proceeding with the second reference. I have also dealt separately with the question now urged regarding the maintainability of the second reference and find that the dispute now adjudicated upon would be referred because previous reference had been expressly made non-operative in respect of the factory workers. Learned counsel for the petitioner has referred to Poona Mardoor Subha v. G.K. Dhuriu and Anr. : AIR1956Bom743 , British India Corporation Ltd. v. Industrial Tribunal Punjab and Anr. 1959 1 L.L.J. 68; Indian Industrial Works Ltd. v. Engineering Mazdoor Sabha 1955 2 L.L.J. 675, Ramnagar Cane and Sugar Co. Ltd. v. Jatin Chakravorty and Ors. : (1961)ILLJ244SC , and Management of the Bangalore Woollen, Cotton and Silk Mills Co. Ltd. v. Workmen and Anr. : (1968)ILLJ555SC . In each of these cases, it was held that a previous settlement or a previous subsisting award, which had not been terminated, prevented a second reference. As I have observed, this principle is beyond question; the only difficulty in the present case, is to ascertain whether there has been a previous award. If there was a previous award, then no doubt, the award under question would be without jurisdiction as the reference would be bad. I have just held that the previous award did not cover the factory workers in the present case for reasons submitted by the management itself before the previous Tribunal. Hence, these judgments have no application to the present case.

8. The second ground of attack in the present case is that the evidence in the previous case has wrongly been read as evidence in this case It is accordingly admitted that the fixation of wages and dearness allowance has not been properly done, as it is well-settled that the legal principle on which wages and dearness allowance have to be fixed is on an industry cum-region basis as laid down by the Supreme Court in a number of cases. This principle has been accepted by the Tribunal also, which has stated:

As the paramount consideration is the interest of the worker, the character of the employer is irrelevant, provided the latter's financial capacity to bear the burden is established. In the ultimate analysis the character of the employer or the destination of profits has no relevance in the fixation of wages and dearness allowance. I am fortified in the above view by the decision of the Constitution Bench of their Lordships of the Supreme Court in Hindustan Antibiotics Ltd. v. The Workmen and Ors. : (1967)ILLJ114SC .

The Tribunal then examined the balance sheets and the profit and loss accounts of the company for the years 1972 and 1973, and noted that the profit and loss accounts and balance sheets for the years 1968 69 to 1971-72 were produced in the previous reference. The Tribunal also considered the fact that evidence led in the previous award made by Shri Baweja, had been considered to compare the emoluments of the employees of this concern with those of other concerns. As a matter of fact, the Tribunal after analysing the decision in the previous award which related to office staff, came to the conclusion that there was a discrimination between the office staff and the factory workers. The Tribunal concluded that the office staff was getting Dearness Allowance according to the Delhi Index while the factory workers were being paid the same allowance under the Bengal Scheme. It was contended on behalf of the petitioner that the factory workers should be treated as being employees in a separate industry. The Tribunal refuted this on the ground that the workmen employed in the factory were subject to the same pressures as the workers employed in the office. High prices affected them equally. The subordinate staff of the factory was as keen to educate their children as the clerical 'staff and in circumstances there should be no difference in the amount of dearness allowance between employees of different kinds getting more or less same scales of pay. Further, an employee whether he is of one kind or another getting the same wage hopes for the same amenities of life and there is no reason why he should not get them, simply because he is, for example a factory workman though he may be coming from the same class of people as a driver.

9. The Tribunal referred to a number of case? decided by the Supreme Court showing that a different system of Dearness Allowance for different types of employees employed by the same employer was not warranted. The cases were Unichem Laboratories Ltd. v. The Workmen 1972 1 L.L.J. 576; Greaves Cotton and Co. and Ors. v. Their Workmen 1964--I L.L.J. 342; and Bengal Chemical and Pharmaceutical Works Ltd. 1969--I L.L.J. 751. The Tribunal also gave a finding that the additional financial burden imposed by changing the system on which Dearness Allowance had to be adjusted was not very significant keeping in view the petitioner company's capacity to pay.

10. It will be seen from this examination that the reference to the evidence in the previous case was only incidental to the decision on the main question which depended on the fact that there should be no discrimination between office workers and factory workers in respect of the manner in which the Dearness Allowance had to be fixed. It can hardly be doubted that both classes of workmen are working at Delhi and not in Bengal. Secondly, it cannot be of any value to the workman to find that the index of prices has not risen in Bengal. He has to pay higher prices in Delhi and on any system of logical reasoning, it would follow that the index of prices which should govern the rate of Dearness Allowance should be the rate prevailing in Delhi and not the rates prevailing in Bengal. It has been pointed out to me by the learned counsel for the petitioner that the Bengal Index has not risen much since 1939. as has the Delhi Index. Various figures for various periods have been pointed out to me by learned counsel. I do not deal with the figures in any detail, but it appears that when the Index figure for Bengal was about, 900, it was about 1,400 in Delhi When these figures are reduced to real terms, it means that compared to 1939 prices, the prices have risen nine times in Bengal and 14 times in Delhi. Dr. Anand Prakash, learned counsel for the petitioner submits that in 1939, Bengal was the hub and centre of industrial activity in India and Delhi had no significant industry. thereforee, he submits that the prices were higher in Bengal in 1939 than they were in Delhi at the same time. This accounts for the greater increase in Delhi and the lesser increase in Bengal. He may be right, but whatever the principle may be, it is not possible for me to work out the comparable prices prevailing in Delhi and Bengal in 1939. The index of prices has to be worked out and applied in relation to the place where a workman is actually working I shall presently deal with the principle on which the calculation has to be made, but I must say that the substitution of the Delhi Cost of Living Index in place of the Bengal Cost of Living Index appears to be the only way in which the Dearness Allowance can be fixed reasonably for workers who are working in Delhi and not in Bengal. This question was elaborately dealt with in the previous award made by Shri Baweja in the case of office workers; they were also previously getting their Dearness Allowance calculated on the Bengal Cost of Living Index but they wanted the cost of Living Index in Delhi to be substituted It was clearly apparent that the ultimate change in the Index would raise the quantum of dearness allowance. In that case, the Tribunal accepted the fact that the transformation should be made. On a parity of reasoning, the same principle has to be applied to the factory workers.

11. Turning now to the analysis of the system by which Dearness Allowance is to be paid, it is significant that the present system by which the Dearness Allowance is calculated is that the allowance varies according to the variation in the Cost of Living Index. In other words, if the index changes, so does the Dearness Allowance. The defect in the system arises from the fact that the Cost of Living Index is calculated in respect of 1939 rates, and not in respect of the date on which a particular workman actually joined the service of his employer. This leads to anomalies and miscalculations. The present reference was not directed against the manner in which the Dearness Allowance is fixed but against the anomaly created by operating the Bengal cost of Living Index in respect of workmen employed in Delhi. If one considers this narrow question only, it is quite apparent that the Delhi Index has to apply and the Bengal Index cannot apply, because it is of no satisfaction to the workers to know that the prices are low or in Calcutta. The worker has to buy the commodities he uses for daily consumption from the market in Delhi. He has to meet the cost of living at Delhi, and, thereforee, if the cost of living has risen he has naturally to ask for greater wages to meet the rising cost. To determine whether the workers claim is justified the Cost of Living Index has to be referred to, and variations in Dearness Allowance must, thereforee, depend on the actual index prevailing in Delhi where the workers are employed.

12. Dr. Anand Prakash has referred to several judgments relating to the manner in which Dearness Allowance has to be calculated, but I do not think that they are at all of any help in determining the question which has arisen in the present case. One of the Principal authorities on which he relies is, Killick Nixon Limited v. Killick and Allied Employees' Union 1975 2 L.L.J. 53, in which the principles on which Dearness Allowance has to be fixed, have been examined. That judgment in turn refers to a number of previous decisions relating to the principles on which Dearness Allowance has to be fixed. The actual question before the Supreme Court, was whether there should be a ceiling on the rise in the dearness allowance or whether the allowance had to go on increasing indefinitely without limit, with every increase in the cost of living index. In fact, the case was remanded back to the Tribunal for redecision after making many important observations regarding the principles on which the dearness allowance had to be adjusted and also indicating in what cases a ceiling was to operate. One of the points dealt with in the judgment was that if the Cost of Living Index rises steeply and continuously, then anomalies and curious situations would arise because they pay packet of the clerical staff would eventually exceed the pay packet of the executive staff, which would hardly be conducive to efficiency and effective exercise of control. Thus, the Court was of the view that a case for imposing some kind of ceiling on the continuous rise of Dearness Allowance had been made out but not, and this is to be emphasized, in the case of all types of workers.

13. As the point has been urged at some length in this case, I think, that some general observations regarding an effective linking of the Dearness Allowance with the Cost of Living Index would not be out of place. As submitted by learned counsel, the Dearness Allowance has to be calculated in relation to the basic wage by some kind of formula. In this company, the wages themselves have been re-adjusted, so the rate of Dearness Allowance co-related with the basic wage by a static formula creates an anomalous situation. I think, an illustration will probably indicate the point better. If the basic wage in 1939 was Rs. 10, when the Cost of Living Index was 100, then assuming that the present Cost of Living Index is 1,000, the wage should be increased ten times, which means, it should become Rs. 100. If, however, the person joined service in 1960 at a salary of Rs. 50 and at that time the index was 300 it is difficult to see why the index for calculating Dearness Allowance should be taken in relation to the figure prevailing in the year 1939. In such a case, the index figures should be taken to be that which prevailed on the date when he joined service. The rise in the cost of living should not be taken as 1,000 minus 300, which would be 700, but it should be 1,000 divided by 300, which would be about three. Thus, a person who was employed when the index was 300,should now be getting three times the same, i.e., should be getting Rs. 130. Under the formula which is in operation, he is liable to get far more than Rs. 150. I have not taken the actual formula into consideration, but have only set out this example as an illustration of the anomaly that occurs if the Dearness Allowance is linked to the 1939 index figure, as opposed to the index figure prevailing on the date when he joined the service. Clearly, the answer to the anomaly pointed out by the learned counsel does not lie in linking the Dearness Allowance formula to the Bengal Index, but by re-adjusting the formula in such a way that it becomes realistic. This is not the scope of the present reference. The principles for fixing the Dearness Allowance have been settled in various decisions of the Supreme Court. For instance, in Bengal Chemical and Pharmaceutical Works Ltd. 1969 1 L.L.J. 751, the Court summarised the principles to be kept in mind for fixing the Dearness Allowance. It was held that neutralisation of the rise in the cost should not be full, except in the case of the very lowest paid employees. The allowance was meant to neutralisation part of the increase in the cost of living and should be on a sliding scale rising or falling according to the change in the index figures The wages as well as the Dearness Allowance had to be fixed on an industry-cum-region basis. The employees should get the same Dearness Allowance whether they worked as clerical staff or as factory workers. The additional financial burden imposed by re-fixing the Wage and the Dearness Allowance had to be ascertained and determined to see whether the employer had the financial capacity to meet the extra expense. These, in short, are the principles accepted by the Supreme Court.

14. From some of the facts and figures placed before me during the course of arguments, it has become apparent that the present employer, has restricted the normal wage payable to its employees. Consequently, the basic wage has been increased. If the same formula for fixing Dearness Allowance is continued to be applied to an increased basic wage, then the rise in the cost of Living Index leads to a dramatic increase in the quantum of the Dearness Allowance, This follows from the fact that the formula for calculating Dearness Allowance remains the same, i.e., there is a multiplier which operates to multiply and amplify a larger amount. For instance, to refer to my previous example if the basic wage is Rs. 10 and the Dearness Allowance formula gives a multiple factor of ten, then the wage plus the Dearness Allowance will become Rs. 100, i.e., the basic wage will be Rs. 10 and the Dearness Allowance will be Rs. 90. If the basic wage is re-structured to Rs. 20, then the multiplying factor of ten will increase the payable amount to Rs. 200. Thus, the Dearness Allowance will be increased from Rs. 90 to Rs. 180. It, thereforee, follows that every time there is a restructuring of the basic wage, there must be an alteration also in the formula for ascertaining the Dearness Allowance, It is quite apparent that this problem has not arisen in the present case in this form, as this was not the question referred to the Tribunal.

15. The simple point before the Tribunal was that there was a basic wage and there was a Dearness Allowance fixed by a particular formula. That formula had already been settled, it was not in question before the Tribunal. The formula provided for a variation in the Dearness Allowance in accordance with the variation in the cost of Living Index prevalent in Bengal. Quite obviously, such a cost of Living Index had no realistic meaning to either the employer or the employees, A meaningful formula would have to depend on the Delhi cost of Living Index as such a cost of living index would reflect the actual variation in prices in Delhi. It may be recalled that a cost of living index is prepared by comparing the prevailing prices of a given set of commodities with the prices of the same set of commodities in the basic year. Thus, the change in the actual cost of living would be reflected by changes in the cost of living indeed. An ideal system can easily be analysed on principles of fair play and justice, but it is not so easy to put into practice because the economic consequences are likely to be disastrous.

16. If the cost of Living Index is to govern all wages, then it should apply to every and consequently the wages of every one would rise at an equal pace. A deeper analysis would demonstrate that this would cause uncontrolled inflation. The purchasing power of employees would spiral so as to raise the prices of commodities in a similar manner. Thus, if Dearness Allowance is allowed to be raised in every case, the effect would be that the prices would be raised by a similar amount and the allowance would, thereforee, become non effective. This is why it is very necessary to get a new formula which would give the workmen some relief against rises in costs, but will not have a deleterious effect on the general economy of the country. This discussion on what a Dearness Allowance should be has, thereforee, to be kept on a practical rather than an idealistic plan.

17. As far as this case is concerned, the limits under which the Tribunal was operating was provided by the nature of the reference made. Once it is accepted that the Tribunal was concerned merely with the question whether the Dearness Allowance allowed to the office staff was to be granted to the factory workers, the scope of the present reference becomes much narrower. I feel, that the Tribunal had no option but to accept the fact that the cost of living index applicable to Delhi was to apply equally to both toe office workers as well as the factory workers. This point was really settled by the Supreme Court in the previously mentioned case of Bengal Chemical and Pharmaceutical Works Ltd. 1969 1 L.L.J. 751.

18. In the circumstances, I cannot accept the contentions of Dr. Anand Prakash in regard to the method to be employed for computing the Dearness Allowance; this was not the question which was to be decided by the Tribunal, the Tribunal was not concerned with how the Dearness Allowance was to be calculated, but only with the question whether the same Dearness Allowance was to be paid to factory workers as had previously been allowed to the office workers. Undoubtedly, on the consideration that the two classes of workers had to be equally treated, the Tribunal was right in its answer The decision of the Tribunal has, thereforee, to be upheld and this writ petition has to be dismissed. In the circumstances, I leave the parties to bear their own costs.


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