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Bangur Brothers, Ltd. and ors. Vs. Government of West Bengal and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKolkata High Court
Decided On
Judge
Reported in(1961)IILLJ351Cal
AppellantBangur Brothers, Ltd. and ors.
RespondentGovernment of West Bengal and ors.
Cases ReferredM.R. Akbarali Khan v. Associated Cement Companies
Excerpt:
- sinha, j.1. the facts in this case are shortly as follows.2. there are eleven petitioners in this application who are all companies incorporated under the indian companies act. the petitioner 1, bangur brothers, ltd., is the managing agent for five companies, namely, hastings mills, ltd., fort william jute company, ltd., belsund sugar mills, ltd., shalimar rope works, ltd., and india paint, colour and varnish company, ltd. the petitioner 1 manages the other companies, namely, amalgamated development, ltd., oceanic navigation company, ltd., bangur land development, ltd., vijay luxmi, ltd., and west bengal properities (private), ltd. the respondent 4 is stated to be a department of the petitioner 1. the factories and/or mills of the various companies are situated in different parts of the.....
Judgment:

Sinha, J.

1. The facts in this case are shortly as follows.

2. There are eleven petitioners in this application who are all companies incorporated under the Indian Companies Act. The petitioner 1, Bangur Brothers, Ltd., is the managing agent for five companies, namely, Hastings Mills, Ltd., Fort William jute Company, Ltd., Belsund Sugar Mills, Ltd., Shalimar Rope Works, Ltd., and India Paint, Colour and Varnish Company, Ltd. The petitioner 1 manages the other companies, namely, Amalgamated Development, Ltd., Oceanic Navigation Company, Ltd., Bangur Land Development, Ltd., Vijay Luxmi, Ltd., and West Bengal Properities (Private), Ltd. The respondent 4 is stated to be a department of the petitioner 1. The factories and/or mills of the various companies are situated in different parts of the country. For example, the factories, etc, of Belsund Sugar Mills, Ltd., are in Bihar. The head offices of all the companies are, however, situated at 14, Netaji Subhas Road, Calcutta. In January 1957 a trade union called the 'National Union of Commercial Employees,' claiming to represent the workmen of the petitioner companies at their respective head offices situated at 14, Netaji Subhas Reed, Calcutta, submitted a charter of demands to the petitioner 1, claiming fixation of grades, dearness allowance and revision of casual leave. By an order dated 7 January 1958 the Government of West Bengal. referred an industrial dispute between 'Bangur Brothers, Ltd., 14, Netaji Subhas Road, Calcutta-1, and their Subordinate staff' for adjudication by the fifth industrial tribunal, Calcutta. The issues that were referred related to the fixation of grades and scales of pay of all categories of subordinate staff, dearness allowance and casual leave. In the written statement filed on behalf of the, workmen by the union, it was mentioned that the petitioner 1 was the managing agent of 11 companies, being petitioner 2 to 11 and the respondent 4. It was further stated that the petitioner 1 employed nearly 60 subordinate employees. It was contended that these companies were only departments of the managing agent, and the administration was common. It was stated that there was only one accountant and cashier common to all the companies, one common provident fund and the leave and holidays of the employees were the same. It was contended that under the same employer, i.e., Bangur Brothers, Ltd., the employees were being discriminated in respect of the pay-structure, and since 1946 no dearness allowance had been paid and the casual leave granted was insufficient. It was pointed out that until 1951 the petitioner 1 company had a system of consolidated pay for all classes of employees including the subordinate staff. Since 1952, the company split up the wages of subordinate staff into basic pay and dearness allowance. It was admitted, however, that the re-fixation was not the same with regard to all the companies. For example, the dearness allowance was fixed at Rs. 30 per month in most oases, but in the case of Shalimar Rope Works, Ltd., it was fixed at Rs. 21 per month. The petitioner 1 filed its written statement pointing out that it was not the managing agent in respect of four companies, as stated above. It was contended that the empoyees of all these companies were not the employees of the petitioner 1 but that it had only employees in the subordinate staff, and there was no existing dispute with thern.

3. Thereupon, on 13 April 1959 a corrigendum was issued by the Government of West Bengal, by which the order of reference was amended. A copy of the corrigendum is annexure E to the petition. As amended by the corrigendum, the order of reference was in respect of an industrial dispute existing between the petitioner land 'their 11 allied concerns' mentioning the. petitioners 2 to 11 and the respondent 4, and 'their subordinate staff. The issue referred were not disturbed end remained the same. After this 'amendment of the order of reference, the workmen filed a second written statement through the union on the same lines as before. Three of the petitioner-companies, namely. Hastings Mills, Ltd., Fort William Company, Ltd., and Belsund Sugar Mills, Ltd., filed one joint written statement. It was stated therein that although these three companies had a common managing agent, and had their head offices at 14, Netaji Subhas Road, they had separate bodies of subordinate staff. It was admitted that there being a common managing agency a common pattern was adopted in respect of wages, leave, etc. so far as was practicable, but these companies were distinct entities and were not adjuncts. of Bangur Brothers, Ltd. A separate written statement was filed jointly by the petitioner 1, the respondent 4 and the petitioners 4, 5, 6, 7, and 8. In this written statement also, It was contended that the companies concerned were separate and distinct entities. A separate written statement was filed on behalf of the petitioner 10, Shalimar Rope Works, Ltd. In this written statement, it was similarly contended that it was a public limited concern with its head office at 14, Netajl Subhas Road, Calcutta, and its factory situate at Shibpur, Howrah. It has its own subordinate staff whose wages had been fixed according to prevailing circumstances. The company had agreed to pay dearness allowance at a flat rate of Rs. 22-50 nP. Finally. a separata written statement was filed by the petitioner 11, the India Paint, Colour and 'Varnish Company, Ltd. It was similarly contended that it was a distinct and separate entity and had its own subordinate staff employed at the head office and Its factory. It was denied that this company was an adjunct of the petitioner 1. Upon this pleading the parties went to trial, and evidence was taken. The first witness called on behalf of the workmen was D.L. Chakravorty, secretary of the union. He said that he was an employee of the companies as a member of the clerical staff. He said that the factories of the 11 companies were situated at different places, but the head office of all of them was at 11, Netaji Subhas Road Calcutta. Bangur Brothers were the managing agents of all the companies. The following evidence is important and must be set out:

I was appointed by the managing agents and placed in the India Paint, Colour and Varnish Company, Ltd, All the workmen concerned in this case were appointed by the said managing agents and were placed in different departments relating to the different companies. Usually, the manag ing agents transfer one employee attached to the head office of one company to that of another head office. Even though an em-ployee is transferred from one department to another, he enjoys the original privileges and conditions of his service. All the workmen are under the control of the managing agents, Bangur Brothers.

4. In cross-examination he admitted that India Paint, Colour and Varnish Company, Ltd., had a separate attendance register. He did not know whether the other companies had separate attendance registers. The next witness was Debendra Nath Mukhopadhaya. According to him he was attached to the despatch department which dealt with all letters of the managing agents as well as the answering companies. With regard to the attendance registers he states as follows:

In the despatch department, attendance register was maintained for the staff of all the companies except Shalimar Rope Works and India Paint. I maintain one attendance register. The register was maintained in this fashion up to the end of 1950. After this the attendance register was split up in the different departments. My name was entered in the name of Port William.

5. The next witness was Ram Ballav Goswami. He said that he was an assistant in the stores department of Bangur Brothers, Ltd., at the head office. The following answers given by Mm are important:

I am attached to the Hastings Jute Mills department'. I am in service for the last 14/15 years. In the stores department there are other clerks for other managed companies. In the head office like the clerical staff, sub-staff are also attached to different managed companies.. . The attendance registers of the staff of India Paint and Shalimar Rope Works have all been separate.

The fourth witness was Raghunath Chobey. He said as follows:

I am attached to the despatch department of Bangur Brothers, Ltd. I was appointed by Bangur Brothers and I get wages from the Hastings Mills department. I am to carry letters of all the companies, as directed by the managing agents. In 1954, I was deputed to work in the cash department.

6. It is true that the writ Court is not like a Court of appeal and ordinarily does not enter into disputed questions of fact, but it is not with that purpose that I have discussed the evidence adduced. The reason why I have done so, is as follows: An adjudication under the Industrial Disputes Act does not mean adjudication according to the strict law of master and servant. Industrial tribunals are not fettered By such limitation [see Western India Automobile Association v. Industrial Tribunal, Bombay--1949 L.L.J. 245, State of Madras v. C.P. Sarathy 1953--I L.L.J. 174. But, the Industrial tribunals, wide as their powers are, have certain limitations, within which they must act. In J. K. Iron and Steel Co. v. Iron and Steel Mazdoor Union and Ors. 1956--I L.L.J. 227, Bose, J., said as follows:

That at once raises questions about the scope and authority of an adjudicator under the Industrial Disputes Act. But that, we feel, is now settled by authority. The Federal Court held in Western India Automobile Association v. Industrial Tribunal, Bombay (supra) that adjudication does not mean adjudication according to the strict law of master and servant and held that an adjudicator's award may contain provisions for settlement of a dispute which no Court could order if it was bound by ordinary law. They held that industrial tribunals are not fettered by these limitations and held further that an adjudicator has jurisdiction to investigate disputes about discharge and dismissal and, where necessary, to direct reinstatement.

That decision was followed wife approval by this Court in State of Madras v. C.P. Sarathy 1953--I L.L.J. 174 (supra) and It was again pointed our, that the scope of an adjudication under the Industrial Disputes Act is much wider than that of an arbitrator making an award. It would be pointless to cover the same ground; so we must take that now as settled law.

All the same, wide as their powers are, these tribunals are not absolute, and there are limitations to the ambit of their authority. In Bharat Bank, Ltd. v. employees of Bharat Bank, Ltd. 1950 L.L.J. 921 at 940 this Court held by a majority that though these tribunals are not Courts in the strict. sense of the term they have to discharge quasi-judicial functions and as such are subject to the overriding jurisdiction of this Court under Article 136 of the Constitution. The powers are derived from the statute that creates them and they have to function within the limits imposed there and to act according to its provisions. Those provisions invest them with many of the 'trappings' of a court and deprive them of arbitrary or absolute discretion and power.

7. Where, therefore, the Supreme Court has discussed and decided a certain aspect of industrial arbitration and has laid down the tests to be applied, they are binding on an industrial court or tribunal and these limitations must be observed. The particular question which I have been discussing, namely, as to the position in law of a single managing agent dealing with a number of answering companies, has often come for adjudication before the courts. The question as to whether in such cases the industries should be considered as one unit or several units has also come under judicial scrutiny. Certain observations have been made and tests laid down by the Supreme Court. I shall now proceed to consider what they are and find out whether they have been followed in this case. The decision of the Supreme Court in Pratap Press v. Delhi Press Workers' Union 1960--I L.L.J. 497 was a case of bonus, but refers to the principle to be followed in such cases. The Pratap Press of New Delhi was started by Its proprietor Sri Narendra in 1951. He started the publication of the paper Vir Arjun In April 1954. He was also one of the partners of the firm which owned another paper, the Daily Pratap.' A dispute over a claim of bonus raised by the workmen of the press having been referred to the industrial tribunal, the workmen contended in the first place that the Wires activities--the Press, the Vir Arjun as also the Daily Pratap--were in reality the industrial ventures of one single family consisting of Sri Narendra and his sons and the working results--whether profit or loss--of these three, concerns, should he pooled together for the decision of the question what bonus, if any, should be paid. The employer contended that these three industries were not interconnected and so the contention put forward on behalf of the workmen should not be given effect to. Das, J., said as follows at p. 498:

The question whether the two activities in which the single owner is engaged are one industrial unit or two distinct industrial units is not always easy of solution. No hard and fast rule can be laid down for the decision of the question and each case has to be decided on its own peculiar facts. In some cases the two activities, each of which by itself comes within the definition of industry, are so closely linked together that no reasonable man would consider them as independent industries, There may be other cases where the connexion between the two activities Is not by itself sufficient to justify an answer one way or the other, but the employer's own conduct in mixing up or not mixing up the capital, staff and management may often provide a certain answer.

8. Reference was made by the learned Judge to the case of Workmen in Hindi Prachar Press v. Hindi Prachar Press 1958--II L.L.J. 358. The question there was whether the workmen of the press were entitled to a bonus. The tribunal found that the press was only a department or a section of the activities of an organization or an institution known as Dakshina Bharat Hindi Prachar Sabha. This institution had several sections like library section, publicity section, books sales section, etc. It was held that these sections were interdependent on one another and the income and expenditure of the institution as a whole must be taken into consideration for calculating the bonus. The next case considered was G.G. Industries Mazdoor Union v. G.G. Tin Factory, Agra 1952-I L.L.J.507. In that case, the employer was the sole proprietor of the G.G. Tin factory. He was also the sole proprietor of the G.G. Chocolate Factory, the G.G. Toy Factory, the G.G. Fruit Factory and the Krishna Ice Factory, If the profit and loss of all these factories were pooled together, there would be a net loss of over a lakh of rupees. It was found, however, that for each factory a separate account was kept and separate balance sheets were prepared. The capital investment by the proprietor In respect of each of these factories had been kept distinct. It was held, therefore, that the G.G. Tin Factory should be considered as a separate and distinct industrial unit. The next case considered was Pips Mill Mazdoor Union, Lucknow v. Indian Hume Pipe Co., Ltd. 1951--I L.L. J. 379. In that case, the company had a Lucknow branch as also several other branches in various other places. The question was whether the industry carried on by the Lucknow branch was to be considered as a separate entity. It was found that the accounts of the Lucknow branch were kept separately and the capital employed in the factory at Lucknow was separately shown in 1947-48 and 1948-49. It was held that the Lucknow branch mast be considered as a Separate industry. Lastly reference was made to Associated Cement Co., Ltd. v. their workmen 1960--I L.L.J, 1. In that case, the Supreme Court had to consider the question Whether the employer's defence to a claim for lay-off compensation by the workers of the Chaibasa Cement Works that the laying off was due to a strike in another part of the establishment, viz., limestone quarry at Rajanka, was good. In other words, the question was whether the limestone quarry of Rajanka formed part of the establishment known as the Chaibasa Cement Works, within the meaning of Section 25E(iii) of the Industrial Disputes Act. In that case, S.K. Das, J., said as follows:--

The Act not having prescribed any specific tests for determining what is 'one establishment,' we must fall back on such considerations as in the ordinary industrial or business sense determine the unity of an industrial establishment, having regard no doubt to the scheme and object of the Act and other relevent, provisions of the Mines Act, 1952, or the Factories Act, 1948. What then is 'one establishment' in the ordinary industrial or business sense The question of unity or oneness presents difficulties when the industrial establishment consists of parte, units, departments, branches, etc. If it is strictly unitary in the sense of having one location and one unit only, there is little difficulty in saying that it is one establishment. Where, however, the Industrial undertaking has parts, branches, departments, units, etc., with different locations, near or distant, the question arises what tests should be applied for determining what constitutes 'one establishment.' Several tests were referred to in the course of arguments before us, such as, geographical proximity, unity of ownership, management and control, unity of employment and conditions of service, functional integrality, general unity of purpose, etc.... It is, perhaps, impossible to lay down any one test as an absolute and invariable test for all cases. The real purpose of these tests is to find out the true relation between the parts, branches, units, etc If in their true relation they constitute one integrated whole, we say that the establishment is one; if on the contrary they do not constitute one integrated whole, each unit is then a separate unit. How the relation between the units will be judged must depend on the facts proved, having regard to the scheme and object of the statute which gives the right of unemployment compensation and also prescribes a disqualification therefor. Thus, in one case the unity of ownership, management and control may be the important test: in another case functional integrality or general unity may be the important test; and in still another case, the important test may be the unity of employment. Indeed, in a large number of cases several tests may fall for consideration at the same time. The difficulty of applying these tests arises because of the complexities of modern industrial organization; many enterprises may have functional Integrality between factories which are separately owned: some may be integrated in part with units or factories having the same ownership and in part with factories or plants which are independently owned. In the midst of all these complexities it may be difficult to discover the real thread of unity.

9. Coming now to the facta of the present case let us sea how the tribunal has considered this aspect of the matter. It was considering the case of the subordinate staff and the evidence before It showed that Bangur Brothers, Ltd., were the managing agents of five of the petitioner-companies mentioned above and managed five others, also mentioned above. The factories and the mills of these various companies were situated in different areas. In one case, namely, Balsund Sugar Mills, Ltd., It was situated outside the State of West Bengal. Originally, the dispute that was referred was between Bangur Brothers, Ltd., and Its workmen. Later on, the order of reference was amended and it was transformed Into an industrial dispute between Bangur Brothers, Ltd., and ' their eleven 'allied concerns' and their subordinate staff,' Thus the order of reference as It finally stood was not a reference of an industrial dispute between Bangur Brothers, Ltd., and its subordinate staff but between Bangur Brothers, Ltd., and all the petitioner companies together with the respondent 4 and the subordinate staff of all the said companies. It was found as a matter of fact that the head offices of all these concerns were at 14, Netaj. Subhas Road. Although it is not so stated In the order of reference, it seems to have been taken as implicit that the workmen involved in the disputes were all employed at 14, Nataji Subhas Road. The tribunal has held that all the categories of the subordinate staff involved in this case should be placed under uniform conditions of service. The reasons given are as follows:

(1) All the subordinate staff involved in this case are attached to the head office of all the companies at, 14, Netaji Subhas Road, which also means the office of the managing agents, namely, Bangar Brothers, Ltd.

(2) From the managing agency agreement (produced and inspected as confidential documents) between Bangur Brothers and the managed companies, it appeared that the managing agents were fully entitled to employ staff for doing the works of all the companies in the head office and they had full control over them. The companies had agreed to reimburse Bangur Brothers, Ltd., for all the amounts to be spent by them for maintaining the staff and no restriction was put about their conditions of service.

(3) All the subordinate staff were serving 'under the same roof' being to all intents and purposes the employees of the managing agents and not of the managed companies.

(4) Some witnesses on behalf of the union have stated that though different members of the sub-staff have been allocated for the work of the managed companies, the staff allocated to one company have to do the work of the other companies as well.

10. From this, the tribunal comes to the conclusion that each category of sub-staff involved in this case should be placed under uniform service conditions. The question is as to whether the testa laid down by the Supreme Court have been adequately applied in this case. It has been found that there are a number of separate companies. Their geographical locations are not the same. No enquiry was made as to whether these companies were in fact unified as to ownership, management or control or had any functional integrality. It was in evidence that when the members of the subordinate staff were appointed, they were appointed for one or other of the companies, although they were transferred quite often from one company to the other. There was no investigation upon the all-important question as to how they drew their wages. In the present petition, it has been categorically stated that the sub-staff drew their wages from the different companies under whom they were employed and there is no specific denial of it, The only evidence that exists is that there was a common despatch department. It was however proved that there were different pay registers and at least from 1951 the attendance registers were split up, there being separate attendance registers for different companies. The secretary of the union has himself given evidence to the effect that the workmen were placed in different departments relating to different companies although there were frequent transfers from one department to another. Practically all the witnesses stated that the workmen were attached to the different managed companies. The mere fact that one managing: agent is in control of a number of managed companies and had been entrusted by contract with the task of appointing subordinate staff at the head office does not and cannot mean that there is functional integrality. If the staff was appointed separately for each company and their wages debited separately and their attendance registers kept separately, then an investigation must be made as to whether there was in fact a functional integrality, because the above facts militate against it. The mere fact that one darwan has come and stated that the despatch department acted in common, does not mean that the employees in all the companies were functioning as an integrated whole. Actually, we find that it is admitted that the basic wages and dear-noss allowances of all the companies were not the same, and the financial status of all the companies was not identical. Therefore without some further investigation It was not possible for the tribunal to come to the conclusion that the entire sub-staff at the head office were treated as sub-staff of managing agents only. However, if this was the only point to be considered in this case, I would not necessarily have interfered. There are, however, much more cogent reasons to be considered. As I have already mentioned, there were three issues referred. The first related to the fixation of the grades and wages of pay of all categories of sub-staff. The second issue related to the rate of deafness allowance and the third issue related to the question of casual leave. Sri Banerjee says that he is not challenging the finding on the third issue but he challenges the findings on the first two issues. I shall, therefore, take up the first issue and examine how the tribunal has decided the same. With regard to these issues, the tribunal notices that the union, on behalf of the workmen, have claimed wages which are identical with that fixed by the Bengal Chamber of Commerce. This the tribunal 'was not prepared to allow, on the ground that perhaps the Bengal Chamber of Commerce rates are considered to be too generous to be thrust upon the unwilling employer. It then notices that on behalf of the company, i.e.. the petitioner 1, reference was made by way of comparison to two awards made by the first industrial tribunal. The first award was in the case of Hukumchand Jute Mills and their employees of the head office, the award being published la the Calcutta Gazette on 3 December 1959 at p. 4184. In that case, scales of pay were fixed for jamadar, darwans and bearers. The second award was in respect of the dispute between Sahu Jain, Ltd., and their associated companies on the one side, and their workmen at the head office, on the other. The award was published in the Calcutta Gazette on 12 March 1959 at p. 1190. In that case, only One wage-scale was fixed for the subordinate staff; it was Rs. 30 to 50. The tribunal does not accept any of these scales, but proceeds to state as follows!

In the instant case, the managing agents as well as the managed companies are quite solvent concerns and practically Bangur Brothers, Ltd., can be regarded as one of the industrial magnates of this country. So there can be no doubt that they are in a position to pay wages at or about the same rates as has been fixed by the aforesaid two awards.

11. Simply, upon this reasoning, the tribunal awards a scale of basic wages which corresponds neither to the scale of the Bengal Chamber of Commerce nor to the two companies mentioned above, whose awards were referred to. For example, in Sahu Jain case there was only one wage-scale fixed for the subordinate staff and that was between Rs. 30 and 50 whereas the scale fixed in the present case for basic wages was Rs.70 to 80 in the case of jamadars, or Rs. 32 to 50 in the case of darwans and Rs. 30 to 42 in the case of bearers. This scale was nearly double of the existing scale of pay and was even more than the scale that was allowed to the workmen of the Hukumchand Jute Mills. There Is no actual comparison made between these several concerns. Sri Acharya has contended that the case of Sahu Jain, Ltd., corresponds closely to the present case, because they had answering companies in different States. For example. Rohtas Cement is in Uttar Pradesh whereas New Central Jute is in West Bengal. If so, there Is no reason given why the scale of wages In the present case should be so different from that of Sahu Jain, Ltd. No reference was made to the paying capacity of the industry. It must be remembered that the companies concerned in this case did not all carry on similar industries. There was a jute mill, a sugar mill, a mill for making ropes as well as a factory for manufacturing paints. No reference was made as to the kind of industry or industries that were involved, In the two industrial dispute cases mentioned above. Sri Acharya says that in an industrial arbitration a rule-of-thumb is permissible. He says that the Bengal Chamber of Commerce scale was too high and the other scales were too low, so the tribunal was entitled to fix the scale midway between the two. This, however, Is not what the tribunal has done. According to the Bengal Chamber of Commerce scale, jamadars get Rs. 60 to 150. In Hukumchand case the scale for jamadars is Rs. 65-75. The scale in Sahu Jain case was Rs. 30 to 50. The scale fixed in the present case for jamadars is Rs. 70 to 80. Therefore, there is no question of fixing anything midway. As has been stated by the tribunal, it has fixed the scale at or about the same rates as has been fixed by the two awards aforesaid. That again is not a correct statement. Pernaps the scale approximates more to the scale in Hukumchand case. No comparison has, however, been made between Hukumchand Jute Mills and Bangur Brothers and the answering companies. The Hukumchand Jute Mill case does not appear to be a case of managing agents having to manage a number of companies carrying on different industries and having factories or mills in different parts of India, As I said, perhaps the case of Sahu Jain and their associated companies would have come nearer the mark. But, not only no comparison was made, but the scale fixed has no relation to the scales fixed in Sahu Jain case.

12. Now let us see whether the tribunal hag followed the teats and directions that have been laid down by the Supreme Court for the purpose of prescribing wage-scales. In Express Newspapers, Ltd. v. Union of India 1961--I L.L.J. 339 the Supreme Court laid down the following principles for the fixation of rates and scales of wages:

(1) That in the fixation of rates of wages, which include within its compass the fixation of scales of wages also, the capacity of the industry to pay is one of the essential circumstances to be taken into consideration except in cases of bare subsistence or minimum wage where the employer is bound to pay the same, irrespective of the capacity to pay.

(2) That the capacity of the industry to pay is to be considered on an industry-cum-region basis, after taking a fair cross-section of the industry,

(3) That the proper measure for gauging the capacity of the industry to pay is to take into account the elasticity of demand for the product, the possibility of tightening up the organization so that the industry could pay higher wages without difficulty, and the possibility of increase in the efficiency of the lowest paid workers resulting in increase in production, considered in conjunction with the elasticity of demand for the product--no doubt against the ultimate background that the burden of increased rate should not be such as to drive the employer out of business.

13. It is apparent that the tribunal applied none of the tests. As I have stated above the various companies concerned constituted different kinds of industries and some of the companies were in a flourishing state but not others. The tribunal merely considered the fact that Bangur Brothers, Ltd., were 'business magnates.' Surely, this is not the kind of test that has been laid down by the Supreme Court. Here there was no question of fixing the bare subsistence or the minimum wage. Therefore, the capacity of the industries to pay must be considered. Since we are concerned in this case with more than one kind of industry, the matter is of great complication and cannot be decided so simply as the tribunal has sought to do. No reference was made to the economic capacity of the different industries or even of Bangur Brothers, Ltd., save and except the rather cryptic statement that they were business magnates. If the Hukumchand Jute Mills or Sahu Jain, Ltd., were comparable industries, no reference was made as to their economic status. Thus the determination of the wage-scale was entirely arbitrary. When a tribunal has to decide upon the scale of wages to be paid, it certainly takes into consideration the respective claims of the parties. It is to be expected that the workmen would stake their claim high whereas the employer would like to whittle it down to a lower level. I do not say that the tribunal is not entitled to arrive at a figure in between the two claims. But this does not mean that it should be done arbitrarily. The scale of wages of its workmen is just as much a matter of life and death for the employer, as for the employees. Apart from the question of living wages, which an employer is bound to pay Irrespective of his economic condition, the fixation of the scale of pay inconsistent with its economic status, might easily drive the employer out of business. That is why the Supreme Court has laid down that you must decide the scale of wages upon certain date, and has indicated the sources from which such data should be collected. The capacity of the industry on an industry-cum-region basis, after taking a fair cross-section of the industry, should be considered. Nothing of the sort has been attempted in this case. Sri Acharya argues that where you are considering the case of managing agents, managing several industries, these principles do not apply. In my opinion, this argument cannot be accepted. The managing agents, although it may appoint the subordinate staff, under a contract with the company or companies concerned, does so on their behalf. It does not pay the wages out of its own pocket. The wages are debited to the various companies. In the present case, It is apparent that the employees were allotted to the various companies and their wages were debited to the different companies. Without any reference to the economic status of these companies, and the capacity of the various industries concerned to pay, a determination of the wage-scale is impossible. Even if it was permissible for the tribunal to consider the managing agents alone as an industry, even so, their capacity to pay on an industry-cum-region basis was not considered. As I Save stated, no real comparison was made even with the two companies whose awards have been taken into account.

14. I now come to the question of dearness allowance. The position with regard to dearness allowance appears to be the same. The Supreme Court has explained what dearness allowance means and how to fix it and the several factors that are to be taken into consideration in computing it. All these directions and observations have been ignored. This is how the tribunal has dealt with the Question of dearness allowance:

As regards dearness allowance in Hukumchand case Rs. 42 per month was awarded as dearness allowance for jamadars, durwans and bearers, etc. There is no reason why all the sub-staff concerned in this case including those attached to Shalimar Rope Works, Ltd., should not be given the same amount of dearness allowance, i.e., at the rate of Rs. 42 per month, in view of the fact that the dearness allowance now paid to them had been given in 1951 and though there has been a considerable and progressive rise in the cost of living index of the working class to which those people belong, their dearness allowance has not been commensurately increased.

15. It will be remembered that the tribunal has not accepted the rate laid down in the case of Hukumchand Jute Mills with regard to the basic pay-scale. Nevertheless, the dearness allowance is to be the same in respect of all the sub-staff including Shalimar Rope Works, Ltd., who have always been getting a lesser scale of basic pay. Now let us see what has been indicated by the Supreme Court about dearness allowance. The matter was elaborately discussed in Clerks and Depot Cashiers of the Calcutta Tramways Co., Ltd. v. Calcutta Tramways Co., Ltd. 1956--II L.L.J. 450. Menon, J., referred to the report of the Committee on Fair Wages appointed by the Government of India, This committee, in dealing with the method of granting relief to the workmen to meet the burden of an increased cost of living, came to the conclusson that there was no uniformity in the extent of compensation given to employees to meet the increased cost of living. It took notice of the fact that the Pay Commission had accepted the principle that the lowest paid employee should be reimbursed to the full extent of the rise in the cost of living and that higher categories of employees should receive a diminishing but graduated scale of dearness allowance. The Pay Commission had rejected the principle of a flat rate for all categories of of employees, irrespective of their basic salaries. There were various other things to be considered. For example, the linking of dearness allowance to the cost of index numbers on the scale of the income-group. It was noticed that the Appellate Tribunal had laid down the principle that the question of neutralization of the rise of the cost of living by the grant of dearness allowance should not be allowed. There was no reason why industrial workers should not make sacrifices like all other citizens. The criterion to be adopted in the fixation of dearness allowance was considered in a decision of the Appellate Tribunal, M.R. Akbarali Khan v. Associated Cement Companies, Ltd. 1953--II L.L.J. 845. Finally, the Supreme Court laid down that although there could not be hard and fast rule regarding dearness allowance applicable to all kinds of employees, very much will depend upon the conditions of labour, the nature of the locality and the mode of living. In matters of the grant of dearness allowance, except to the very lowest class of manual labourers whose income is just sufficient to keep body and soul together, it is impolitic and unwise to neutralize the entire rise in the cost of living by dearness allowance. Coming to the facts of the present case, we find that none of these principles have been followed and were not at all present in the mind of the tribunal, when deciding the question of dearness allowance. The primary thing to be considered in the case of dearness allowance is the rise in the cost of living, and how far this should be neutralized by the payment of dearness allowance. The attention of the tribunal was not at all turned to the cost of living or the cost of living index at the relevant time. Then again, with regard to different categories, a flat rate of dearness allowance has been allowed to all members of the sub-staff although their basic wage-scales were different. This Is expressly contrary to what has been laid down by the Appellate Tribunal and the Supreme Court. Where there are more than one method of determining dearness allowance, and where upon considering the facts of a particular case the tribunal decides to adopt one method or the other, the Court should not interfere. But that is not the case here. In the present case, dearness allowance fixed in some other industrial award has been adopted, without a proper comparison of the factors involved, that Is to say, without properly equating them. Thereafter the tribunal arbitrarily awarded a flat rate of dearness allowance for all categories. In my view this is not a proper approach to the problem and the decision is arbitrary and not in accordance with law.

16. The result is that for the reasons aforesaid the award cannot be upheld excepting the finding on Issue (3) which has not been challenged. The result Is that the award in so far as the findings on the issues (1) and (2) are concerned is quashed by a writ in the nature of certiorari, and there will be a writ In the nature of mandamus directing the respondents not to give effect to the same. This will not prevent the issues being considered and decided in accordance with law. Interim orders vacated. No order as to costs.

17. The amount deposited under orders of the Court will not be withdrawn for a period of three weeks from date, to enable the respondents to prefer an appeal, but the petitioner will not have to deposit any further sums.

18. Order may be drawn up expeditiously.


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