Bombay High Court
West Coast Paper Mills Ltd. And Ors. vs West Coast Paper Mills Ltd. Emp. Union ... on 23 January, 1986
Equivalent citations: [1987(54)FLR742], (1994)IIILLJ1152BOM
JUDGMENT Pendse, J.
1. By this petition filed under Article 226 of the Constitution of India, the petitioners employer are challenging the legality of the award dated June 30, 1983 passed by the Industrial Tribunal, Maharashtra, Bombay, fixing the dearness allowance at cost of living index Rs. 1206 as below:
Salary Slab Fix D.A. Rs.
Variation per 10 point rise/fall inded Rs. 1-Rs. 100 175 5 per cent.
Rs. 101-Rs. 200 175+80 2.5% + 5 per cent, on first 100 basic.
Rs. 201 and above 175+80+40 1 .5% + 5 per cent, above 2.5% per cent, on second 100 basic.
The Tribunal also directed that the minimum variable dearness allowance should be fixed on the basis of 5 per cent as mentioned in Exhibit UC6 filed by the Union. The dearness allowance claimed is made effective from February 16, 1976. The litigation has a chequered career and the employer had made every effort to delay the proceedings. The facts giving rise to filing of the present petition are as follows:
2. The petitioner company manufactures paper and has factory situate at Dandeli in the State of Karnataka, while the administrative office is situate at Bombay and employs about 95 workers such as clerks, stenographers, typists, drivers, peons etc. In the year 1968 the Union on behalf of the workmen at the Head Office raised certain demands relating to the wage scales, dearness allowance, gratuity etc. and these demands were referred to the Industrial Tribunal, then presided over by Shri R.D. Tulpule. The Tribunal made the award on June 3, 1972 and since then the service conditions relating to wage scales and dear-ness allowance were governed by the provisions of that award. The Union presented a fresh charter of demand in the year 1976 and a reference was made by the Government of Maharashtra under Section 10(1)(d) of the Industrial Disputes Act, 1947 to the Tribunal as regards the matters stated in the schedule to the reference, that is the wage scale, adjustment, dearness allowance etc. The Industrial Tribunal presided over by Shri B.B. Tambe gave Award on January 30, 1980 and that award was challenged by the Company by filing Writ Petition No. 617 of 1980 in this Court. The petition came up for hearing before me and the challenge was restricted to only four grounds. The employer did not challenge the award in regard to fixation of the basic pay. The four grounds urged in support of the petition were (1) that the Tribunal overlooked that the pay scales of the petitioner Company's employees were consolidated upto Index 740 ;(2) the Tribunal overlooked that the Company gave production bonus, which is at 10 per cent of the basic wages; (3) that the comparable concerns were not taken into account by the Industrial Tribunal; and last (4) that the slab system should not have been employed by the Tribunal especially when in the earlier award passed by Shri Tulpule it was observed that the slab system would bring about distortions in the pay scales.
The Tribunal had proceeded to pass the award on a finding that Hindustan Ferodo Ltd. is a comparable concern and the employees of the petitioner Company are entitled to get basic pay and dearness allowance which would be very near comparing level with the employees of Hindustan Ferodo. By my judgment dated April 28, 1981, the award of the Tribunal determining the basic wages was upheld and only that part of the award determining the fixed dearness allowance and variable dearness allowance was set aside and the proceedings were remitted back to the Tribunal for a fresh determination. I gave specific direction as to the ambit of the inquiry before the Tribunal on remand and observed:
"The Tribunal should determine as to whether the slab system should be employed while fixing the dearness allowance in the light of the observations made by Shri Tulpule in his earlier Award and in the light of any other material which either party would produce before the Tribunal hereafter. The Tribunal would also determine whether the minimum variable D.A. should be fixed on the basis of 5 per cent as mentioned in Exhibit UG-6 or any other amount which according to the Tribunal is proper on the basis of material which either parties are at liberty to produce before it."
It is obvious that the award was remitted back to the Tribunal for considering only two specific questions and all other findings recorded in the award passed by Shri Tambe were confirmed, including that Hindustan Ferodo is a comparable concern with that of the petitioner Company.
3. Inspite of this specific direction, the employer tried sharp tactics before the Tribunal on remand and contended that the question has to which were the comparable concerns and what were that scales of dear-ness allowance prevailing in those concerns is open for reconsideration. The employer contended that Digvijay Cement Company is more comparable concern than Hindustan Ferodo. The Company also tried to urge before the Tribunal that the financial position of the petitioners should be taken into consideration to ascertain whether the dearness allowance granted by Tambe award would upset the Company's financial position. The employer, taking advantage of the order of remand, tried to reopen the whole inquiry before the Tribunal and that was most improper on the part of the employer. Fortunately, though the Tribunal permitted the employer to reagitate that M/s. Digvijay Cement Company is a comparable concern and not Hindustan Ferodo, the Tribunal recorded a finding that Hindustan Ferodo is a comparable concern. The Tribunal also held that the petitioner Company can very well bear the burden of the grant of dearness allowance and the claim of the Company that it would affect and upset its financial position is totally misconceived and false. The Tribunal after noticing that observed by Tulpule Award the slab system may bring about some distortion, came to the conclusion that to do justice to the employees, the best way is to adopt the slab system suggested by Tambe Award. The Tribunal held that the crucial factor which must be taken into consideration while determining the mode of fixing the dearness allowance is the total pay packet which would be drawn by the employees of the petitioner Company with comparison to the total pay packet of an employee of Hindustan Ferodo. Adopting that basis, the Tribunal examined the material on record and came to the conclusion that the slab system introduced by Tambe award is correct and accepted the same. The Tribunal also held that the minimum variable dearness allowance should be fixed on the basis of 5 per cent as mentioned in Exhibit UG-6. The award of the Tribunal is again under challenge in this petition.
4. When the petition came up for admission before me in October 1983 I realised the tactics employed by the employer to defeat or at least to postpone the payment of the amount due to the employees, and therefore, while admitting the petition I directed as an interim arrangement that the petitioner Company shall pay the amount of fixed dearness allowance at the rate of Rs. 295 from February 16, 1976 till January 30, 1980 to all the employees who were in service. I further directed that the Company shall pay to all the employees 50 per cent of the dearness allowance awarded under the impugned award from February 1, 1980 and this amount the petitioners shall not recover back even if they succeed in the petition but should be adjusted towards the wages for the subsequent period. The enforcement of the award for the remaining 50% of the dearness allowance was stayed. The Company instead of carrying out the interim arrangement filed Appeal No. 798 of 1983 before the Division Bench of this Court, but the appeal was summarily dismissed. Not satisfied with that, the Company carried the matter before the Supreme Court, but the Special Leave Petition was also dismissed. After all these rounds of litigation adopted by the Company were over, now the petition has come for final hearing before me.
5. Shri Damania, learned counsel appearing on behalf of the petitioner Company, very strenuously urged that the Tribunal has not carried out the directions given by this Court while remanding the matter and on that ground the impugned award should be set aside and matter should be again remitted back. The submission was advanced with an obvious desire to delay the matter further and deprive the employees of what is due to them. The learned counsel urged that by my order of remand the Tribunal was required to examine whether the slab system adopted by the Tambe award should be upheld after taking into consideration the observations made by Shri Tulpule in the earlier award. The learned counsel argued that the Tribunal has not applied its mind to this aspect at all. The submission is entirely misconceived. As mentioned hereinabove, while passing the award in the year 1972, Shri Tulpule had observed that the comparable concern is M/s. Hindustan Ferodo Ltd. and not the Rallis India. Shri Tulpule passed the award with the intention that the wages of the employees of the petitioners ought to be between the wages of the employees of M/s. Hindustan Ferodo Ltd. and M/s. Rallis India and thereupon consolidated the dearness allowance at C.L.I. 740. Shri Tulpule did observe in his award:
"I am not inclined to fix the dearness allowance, which is on the same pattern as in Hindustan Ferodo and Rallis India as this slab system of dearness allowance in my judgment has worked harshly and has brought about distortions which have to be removed and provided against."
Taking advantage of these observations, it was contended before me in the earlier petition that Tambe award was not right in adopting the slab system of dearness allowance and in any event the apprehension sounded by Shri Tulpule should have been borne in mind. I remanded the matter back to the Tribunal to consider whether the slab system is desirable in view of the observations of Shri Tulpule in the earlier award.
The Tribunal in the impugned award clearly found that Shri Tulpule's award was given with the intention that the wages of the employees of the petitioner Company ought to be between the wages of Hindustan Ferodo and Ratlis India. The Tribunal held that this would be maintained by giving effect to the dearness allowance scheme prepared by Tambe award. The Tribunal further held that when production bonus granted to the employees since January 1, 1980 is added to the above figures it would show that wages of employees in the petitioner Company would be between the wages of employees in the two other companies, that is Hindustan Ferodo and Rallis India. The Tribunal therefore observed that the dearness allowance fixed by Tambe award at Index 1296 and variable dearness allowance thereafter at 10 points rise or fall should be maintained. In my judgment, the conclusion recorded by the Tribunal suffers from no infirmity and is not required to be disturbed in exercise of writ jurisdiction. The contention of Shri Damania that the Tribunal had not applied its mind to the directions given in the remand order is entirely misconceived. The Tribunal was fully conscious of the directions given by me and the Tribunal had applied its mind to Tulpule award and also the effect of adopting slab system as suggested by Tambe award.
6. Shri Damania raised three or four contentions to urge that the Tribunal under the impugned award has not considered the ambit of Tulpule award and has furnished no reasons why the slab system employed by Tambe award is accepted. The learned counsel urged that the Tribunal overlooked that the basic wages paid by the petitioner Company were more than the wages drawn by the employees of Hindustan Ferodo. The second submission was that the Tribunal overlooked that the basic wages drawn by the employees of the petitioner Company has an element of dearness allowance. The third circumstance urged is that the dearness allowance awarded by the Tribunal is more than that available to the employees of Hindustan Ferodo. Finally it was urged that the Tribunal had failed to make calculations as regards the effect of the award and whether the petitioner Company would be able to bear the burden. In my judgment, each and every contention of Shri Damania is incorrect and the award of the Tribunal cannot be faulted on any of these grounds.
7. The Tribunal was fully conscious that basic wages of the employees of the petitioner Company are more than those drawn by the employees of the Hindustan Ferodo. The Tribunal was also conscious that the basic wages of the employees of the petitioner Company has element of dearness allowance. These circumstances are clearly mentioned by the Tribunal in paragraphs 11 and 12 of the impugned award. The Tribunal was also conscious that the revision of dearness allowance would bring the wages of the employees of the petitioner Company somewhere near that of the employees of Hindustan Ferodo. The Tribunal was fully conscious of all these aspects and that is evident on perusal of paragraph 15 of the impugned award. The Tribunal observed that the total wage packet of the employees of the petitioner Company shall have to be fixed in such a manner as to be more or less similar to the total wage packets of workmen of Hindustan Ferodo, and to achieve that object it is necessary to maintain the proposed dearness allowance system prescribed by Tambe award. I do not find any infirmity in the reasoning or conclusion recorded by the Tribunal.
8. Shri Damania then urged that the Tribunal has failed to take into consideration the additional burden which would be imposed upon the employer and whether the employer can reasonably bear such burden. The complaint is that the Tribunal ought to have made the calculations to ascertain the extent of burden on the employer. The submission cannot be accepted for more than one reason. In the first instance that was not ambit and scope of the remand order and it was wholly improper for the employer to reagitate this contention before the Tribunal. Secondly, the Tribunal in paragraph 16 of the impugned award considered the claim of the employer and on examination of the material available, came to the conclusion that the dearness allowance of 95 staff members as granted by Tambe award would not go to affect and upset the Company's financial position. Realising the futility of the submission, Shri Damania desperately urged that the Tribunal has not determined the dearness allowance on the basis of the index available at the time of passing the award and thereby contravened the directions in the order or remand. The submission cannot be entertained, because the employer took no efforts to produce before the Tribunal the chart to establish what would be the dearness allowance on the basis of index available at the time of passing the award. It is not in dispute that the index has gone on increasing from time to time. Shri Damania urged that increase in the index causes additional burden on the employer, and therefore, I should examine that aspect for the first time in this petition. I decline to adopt the course suggested by the learned counsel, because nothing prevented the employer from carrying out that exercise before the Tribunal. The employer has deliberately failed to assist the Tribunal, and an impression is left that every effort was made to mislead the Tribunal with probable expectation that the matter would be again remanded and the Company can successfully delay making payment to the employees. In my judgment, the challenge to the impugned award is wholly unsustainable.
9. Shri Damania then claimed that the result of the impugned award is that the employees of the petitioner Company would get their pay packets more than the employees of the Hindustan Ferodo. In the first instance there is no material on record to substantiate that claim. Secondly, I suggested to the learned counsel that if the petitioner Company is willing to give similar pay packets as that of the employees of Hindustan Ferodo to the employees of the petitioners, then the Union would be agreeable to make adjustment. Shri Menon, learned counsel for the employees, with his usual fairness, agreed that the workers would be willing to have adjustment, but Shri Damania after taking instructions from his clients, who are present in Court, declined to follow that course and suggested that the impugned award should be set aside and the matter should be remanded afresh. In my judgment, it is impossible to accede to the submission of Shri Damania, as the only desire of the employer seems to be to defeat or delay payment of dearness allowance to the employees. In my judgment, the impugned award is not required to be disturbed in exercise of writ jurisdiction and more so when the employer has not acted fairly before the Tribunal on remand and has tried to reopen the whole issue, though the order of remand concluded the petitioners save and except on only two issues.
The petitioners have no grievance about the basis of fixation of variable dearness allowance and that part of award is also, required to be upheld.
10. Accordingly, petition fails and the rule is discharged with costs.
By my interim order, dated October 11, 1983, I had granted stay in respect of enforcement of the part of the award on the undertaking of the Company, that in case of their failure at the hearing, the balance amount would be paid with 18 per cent per annum interest from February 1, 1980. As the petitioners have now failed at the hearing, the balance amount of dearness allowance shall be paid forthwith to the employees with 18 p.a. interest from February 1, 1980.
Application of Shri Damania for stay of this order is rejected.