Patna High Court
Bharati Bhawan Karmachari Sangh vs The State Of Bihar & Ors on 18 October, 2017
Author: Rajeev Ranjan Prasad
Bench: Ajay Kumar Tripathi, Rajeev Ranjan Prasad
IN THE HIGH COURT OF JUDICATURE AT PATNA
Letters Patent Appeal No.2250 of 2015
Arising out of
Civil Writ Jurisdiction Case No. 9645 of 2007
===========================================================
Bharati Bhawan Karmachari Sangh, LIG Flat No. 303, Block No. 4, Sector No. 3
Bahadurpur (Housing) Colony Patna-800020, through its General Secretary Siyaram
Thakur
.... .... Respondent / Appellant
Versus
1. The State of Bihar through the Secretary, Labour, Employment and Training
Department (at present Labour Resource Department) Govt. of Bihar New
Secretariat Building, Vikas Bhawan, Bailey Rd., Patna ..... Respondent/Respondent
2. The Presiding Officer, Industrial Tribunal, Labour Department (at present Labour
Resource Department) Bailey Road (at present 12/84 Officers Flat new Punai Chak)
Patna.
3. M/s Bharati Bhawan (Publishers & Distributors) Thakurbari Road, Patna- 800003,
through its Partner Tarit Bose, son of late Ram Mohan Bose.
.... .... Petitioner / Respondent
===========================================================
Appearance:
For the Appellant/s : Mr. Siyaram Thakur (Appellant in person).
For the Respondent no. 3 :
Mr. Alok Kumar Sinha and
Mr. Indrajeet Bhushan, Advocates.
For the State: Ms. Nutan Sahay, AC to AAG 12.
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CORAM: HONOURABLE MR. JUSTICE AJAY KUMAR TRIPATHI
and
HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
CAV JUDGMENT
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
Date: 18-10-2017
Heard the parties.
2. This intra-court appeal has fallen for consideration at the
instance of Bharti Bhawan Karmchari Sangh (hereinafter referred to as
„union‟) being aggrieved by the judgment and order dated 29.07.2015
passed by a learned Single Judge of this Court in CWJC No.
9645/2007.
Patna High Court LPA No.2250 of 2015 dt. 18-10-2017
2/28
3. The learned Single Judge has allowed the Writ
Application preferred by the management, namely, M/s Bharti Bhawan
(Publishers & Distributors), Thakurbari Road, Patna. The learned
Single Judge has been pleased to set aside the impugned Award dated
22.02.2007(Annexure-9 to the Writ Application) passed by Industrial Tribunal, Patna in Reference Case No. 14/2003 leaving it open to the State Government to refer the dispute to a proper forum by issuance of a fresh notification in accordance with law.
4. Brief facts of the case, as appearing from the records placed before this Court, are summarized as under.
5. M/s Bharti Bhawan (Publishers & Distributors) (hereinafter referred to as "the Management/ Bharti Bhawan") is a Book Publisher & Distributor working at the relevant time with a strength of about 250 workmen. Some of the workmen employed with the Bharti Bhawan formed a union, namely, Bharti Bhawan Karmchari Sangh which is a duly registered union. The said union submitted a 12-Point Charter of Demands before the Management and as those demands were not fulfilled, a complaint was made to the Department of Labour, Employment and Training, Government of Bihar, thereupon a conciliation proceeding was initiated but the conciliation failed and on receipt of a failure report, the State Government issued Notification No. 7/Shram-D-1607/2001-400 dated 20.10.2001 by which the Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 3/28 12-Point Charter of Demands was sent for adjudication before the Labour Court, Patna. A copy of the said notification dated 20.10.2001 is Annexure-3 to the Writ Application.
6. It appears that subsequently the State Government got a representation from the union that the reference should have been sent to the Industrial Tribunal in terms of Schedule III read with Section 10(i)(d) of the Industrial Disputes Act, 1947 because there were more than 100 workers involved in the reference. The State Government withdrew the reference from the Labour Court and transferred the same to the Industrial Tribunal vide Notification dated 21.06.2002 (Annexure-4 to the Writ Application).
7. The terms of reference, as contained in Annexure „3‟ dated 20.10.2001, and transfer of said reference vide Annexure „4‟ dated 21.06.2002 reads as under:-
"fcgkj ljdkj Je] fu;kstu ,oa izf'k{k.k foHkkx vf/klwpuk iVuk] fnukad & 20-10-2001 ,l0 vks0 pw¡fd fcgkj jkT;iky dh jk; gS fd Hkkjrh Hkou BkdqjckM+h jksM] iVuk ds izcU/ku rFkk muds dkexkjksa ftudk izfrfuf/kRo Hkkjrh Hkou deZpkjh la?k] iVuk djrs gSa] ds chp blds lkFk layXu vuqca/k „d‟ esa mfYyf[kr fo"k; ds lEcU/k esa fookn py jgk gSA vkSj pw¡fd fcgkj jkT;iky mDr fookn dks U;k; fu.kZ;kFkZ funsZf'kr djuk okaNuh; le>rsa gSaA Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 4/28 blfy, b.MLVªh;y fMlI;wV~l ,DV 1947 ¼14 ] 1947½ dh /kkjk 10 dh mi/kkjk ¼1½ ds [kaM 5 lh ds }kjk iznRr 'kfDr;ksa dk iz;ksx djrs gq, fcgkj jkT;iky mDr fookn jkT; ljdkj }kjk xfBr Je U;k;ky;] iVuk dks U;k; fu.kZ;kFkZ funsZf'kr djrs gSaA mDr vf/kfu;e dh /kkjk & 10 dh mi/kkjk ¼2½ , iznRRk 'kfDr;ksa dk iz;ksx djrs gq, fcgkj jkT;iky bl vf/klwpuk dks izkfIr dh frfFk ls rhu eghuksa dh dkykof/k Hkh fofufnZ"V djrs gSa ftlds Hkhrj Je U;k;ky; iVuk mDr fookn ij viuk ifjfu.kZ; jkT; ljdkj dks lefiZr dj nsxkA vuqca/k 'd' "D;k Hkkjrh Hkou deZpkjh la?k iVuk ds }kjk izcU/ku Hkkjrh Hkou ¼ifCyllZ ,.M fMLVªhC;wVjl½ BkdqjckM+h jksM iVuk ds le> mBk;s x;s 12 lw=h ekax i= mfpr gS\ vxj gk¡ rks dkexkj fdl lgkn~; ds gdnkj gSa \ la[;k & Je U;0 1607@2001 J0 fu0&40 fcgkj jkT;iky ds vkns'k ls g0@& ¼jk; enu fd'kksj½ Lkjdkj ds mi lfpo ********** "fcgkj ljdkj Je] fu;kstu ,oa izf'k{k.k foHkkx vf/klwpuk la[;k & 7 Je-Mh- 1607@2001 Je0 fu0&267 iVuk] fnukad & 21-06-2002 foHkkxh; vf/klwpuk la[;k 7@Je Mh0 1607@2001 J0 fu0& 400 fnukad 20-10-2001 ,oa bldk vaxzsth vuqokn 7@Je Mh- 1607@2001 J0 fu0 & 401 fnukad 20-10-2001 izfrfyfi layXu tks Hkkjrh Hkou BkdqjckM+h jksM iVuk ds izca/ku rFkk muds deZpkjh ds chp fookn py jgk gS rFkk lEizfr Je U;k;ky; iVuk esa fopkjk/khu gS dks Je U;k;ky; iVuk ls okil ysrs gq, vfHkfu.kZ; gsrw ihBklhu inkf/kdkjh vkS/kksfxd U;k;kf/kdj.k iVuk ds fopkjkFkZ funsZf'kr fd;k tkrk gSA fcgkj jkT;iky ds vkns'k ls g0@& Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 5/28 ¼jk; enu fd'kksj½ Lkjdkj ds mi lfpo Lka[;k & 7 Je- Mh- 1607@ 2001 J0 fu0 & 267 iVuk] fnukad & 21-06-2002 izfrfyfi ihBklhu inkf/kdkjh Je U;k;ky; iVuk@ ihBklhu inkf/kdkjh vkS/kksfxd U;k;kf/kdj.k iVuk@ izca/kd Hkkjrh Hkou BkdqjckM+h jksM iVuk@ Jh fl;kjke Bkdqj] egklfpo] Hkkjrh Hkou deZpkjh la?k ] ,y0 vkbZ0th0 QySV la[;k& 303] CykWd u0 4 cgknqjiqj gkmflax dkWyksuh iVuk@ izeM a yh; vk;qDr iVuk@ Je vk;qDr iVuk@ ftyk inkf/kdkjh iVuk@ vuqeaMy inkf/kdkjh iVuk@ mi Jek;qDr iVuk@ lgk;d Jek;qDr iVuk@lgk;d Jek;qDr la?k iVuk@ tulEidZ funs'kd fcgkj dks lwpukFkZ ,oa vko';d dk;kZFkZA iwoZ vf/klwpuk dh izfrfyfi layXuA g0@& ¼jk; enu fd'kksj½ ljdkj ds mi lfpo""
8. The withdrawal of reference from the Labour Court and transfer of the same to the Industrial Tribunal by the State Government came to be challenged by the Management at the very first instance by way of a preliminary objection.
9. A petition dated 29.09.2003 was filed on behalf of the Management taking a preliminary objection to the transfer of the reference to the Industrial Tribunal and the same was considered by the then Presiding Officer, Industrial Tribunal, Patna who finally rejected the objection vide order dated 24.10.2003 (Annexure-9 to the Writ Application). The nature of order dated 24.10.2003 is certainly not a kind of interim order. The Tribunal was of the view that the government‟s order of reference is neither arbitrary nor against any legal provision. The Tribunal recorded that the reference had been sent Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 6/28 initially to the Labour Court simply by mistake (emphasis supplied) and the same had now been rectified by the present reference. Admittedly, the order dated 24.10.2003 rejecting the preliminary objection of the Management against the transfer of the reference to the Industrial Tribunal attained finality as no challenge was made to the said order at the instance of the Management.
10. The parties participated in course of reference and after taking note of the evidences available on the record the Presiding Officer, Industrial Tribunal, Patna found that Demand Nos. (i) & (v) were proper, Demand No. (xi) was partly proper and the remaining Demand Nos. (ii) to (iv), (vi) to (ix) & (xii) were not proper. We are, therefore, not required to look into the demands which were rejected as not proper. The Industrial Tribunal while considering as to what reliefs should be granted to the workmen held that the pay scale of the workmen employed under the Management of the Bharti Bhawan with effect from 01.01.1996 would be revised as follows:-
"1. Peon 2250-50-3000-75-3600
2. Assistant 2750-70-3800-75-4400
3. Technical Staff 3500-75-4250-100-4950
4. Supervisor 4000-100-6000 The Dearness Allowance and other allowances at the prevalent rates in the establishment be paid. The Pay Revision be done after every 10 years by raising at least 10% of the basic pay."
11. The Award passed by the Tribunal came to be Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 7/28 challenged by Management / Bharti Bhawan before the learned Single Judge in its writ jurisdiction under Article 226 of the Constitution of India.
12. The learned Single Judge accepted the two grounds of challenge and allowed the Writ Application. The first ground on which the learned Single Judge agreed with the contention of the Management is that there was no valid reference to the Industrial Tribunal, Patna because the government had not given any reason for withdrawal of the reference from Labour Court, Patna and reference thereof to the Industrial Tribunal, Patna under Notification No. 267 dated 21.06.2002 (Annexure 4 to the Writ Application). According to the learned Single Judge, Section 33(B) of the Industrial Disputes Act, 1947 castes a mandatory obligation upon the government to assign reason in the order of withdrawal and for transferring the reference from one court to another court and if the government fails to do so, the order of withdrawal and transfer cannot be treated as a valid order. The learned Single Judge went further to add that the order dated 24.10.2003 rejecting the preliminary objection of the petitioner at the very initial stage of the proceeding even if not challenged by the petitioner, in case of violation of the mandatory provision and law, the same can be raised at any stage and not challenging the order dated 24.10.2003 by the petitioner does not amount to acceptance of the findings of the learned Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 8/28 Tribunal and the said finding will not work as res judicata against the petitioner.
13. The second ground of challenge which has been accepted by the learned Single Judge is that the Industrial Tribunal wrongly compared the pay scale of the employees of the State Government with the proposed pay revision and other amenities to the employees of the „Bharti Bhawan‟ and the learned Tribunal did not follow the principle of Region-cum-Industries Basis Theory. According to the learned Single Judge, the status of a private establishment cannot be compared with the status of a government organization and, therefore, in his view, the impugned award was not sustainable in the eye of law.
14. On behalf of the petitioner, contentions were also raised challenging the recognition of the union (respondent no. 2) on the ground that the said union was not a recognized union and an unrecognized union cannot raise the demands of general nature. The learned Single judge has rejected the contention of the petitioner and held that the respondent no. 2 was a registered union, though not recognized by the Management but admittedly except respondent no. 2, there was no any other union to raise the problems of the employees of the petitioner, therefore, it cannot be said that the respondent no. 2 had got no representative capacity.
Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 9/28 Contention of the respondent no. 2-appellant
15. Sri Siyaram Thakur, General Secretary of the Karmchari Union has appeared in person. He submits that the learned Single Judge has apparently committed a grave error in accepting both the grounds of the petitioner. According to him, the learned Single Judge could not appreciate that the order dated 24.10.2003 passed by the Presiding Officer, Industrial Tribunal, Patna rejecting the preliminary objection of the Management as regards withdrawal of the reference from Labour Court and transfer of the same to the Industrial Tribunal, would operate as res judicata. According to him, the principle of res judicata applies also in the same proceeding at two different stages. He would submit that the learned Single Judge could not appreciate that the first notification was issued by the State Government referring the dispute to the Labour Court by mistake because the reference was with respect to more than 100 workers and as per the provision of Section 10(i) of the Industrial Disputes Act, 1947 read with Schedule III, such reference could have gone only to the Industrial Tribunal. Thus, the State Government, on being pointed out the mistake, corrected the same; this being the apparent reason well known to the Management, the order dated 24.10.2003 passed by the Presiding Officer, Industrial Tribunal rejecting the objection of the Management on this point was never challenged. Thus, this issue was Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 10/28 not open for consideration by the learned Single Judge. It is not a case where the Industrial Tribunal had any inherent lack of jurisdiction and, therefore, the Award passed by the Industrial Tribunal was not fit to be interfered with on this ground.
16. It is further contended on behalf of the appellant that a perusal of the Award of the Tribunal would show that the Tribunal has considered the entire evidence available on the record. Submission is that the Tribunal looked into the audited financial statements of the Bharti Bhawan for the Financial Years 2000-01 & 2001-02 which were produced on behalf of the Management. The Tribunal took note of the statements of the witnesses of both sides and then compared the pay scale which was provided to the workmen employed under Bharti Bhawan Management in the year 1981 and the pay scale of the Bihar Government employees in the year 1981 and on 01.01.1996. The Tribunal found, as a matter of fact, that the undisputed affidavit of WW4 was that his pay scale in 1981 after pay revision was Rs. 388-8-440-10-490-12-525-30-580 and so on. After 1981 there was no pay revision for the employees of Bharti Bhawan; they were only given some increment at the end of the year. In fact, the Tribunal has recorded that though the Management and its witnesses claimed that pay is revised in Bharti Bhawan in the month of July every year, not a single order of pay revision had been filed by the Management to prove Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 11/28 that pay of the employees of the firm had been revised after 1982 and that any revised rate of pay was given to the employees. WW4, an Assistant in Bharti Bhawan, produced a chart of pay and dearness allowance which he received from the year 1981 to 2003. The said chart was not disputed by the Management. The chart produced by WW4 falsified the claim of the Management. It was clear that annual increment in pay, besides the increase in dearness allowance, only has been given. In these circumstances, according to the appellant, the Industrial Tribunal took note of the pay scale of the Bihar Government employees in 1981 and on revision on 01.01.1996 which were found as under:-
Category In 1981 From 01.01.1996
1. Peon 350-5-3805-400-5-425 2550-55-2660-60-3200
2. Assistant 580-10-620-15-770-15-860 4000-100-6000
3. Steno Grade-II 680-15-890-15-965 4500-125-7000
17. The appellant submits that the Tribunal found that in the year 1981, after pay revision, an Assistant working in Bharti Bhawan was getting slightly higher than a Peon but much less than an Assistant working in the Bihar Government. Taking the same features into consideration, the Tribunal allowed a pay scale for the workmen employed under the Management of Bharti Bhawan with effect from 01.01.1996, as has been taken note of here-in-above. The appellant submits that the Tribunal has not awarded the same pay scale which is Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 12/28 being provided to the State Government employees; rather the pay scale is much less than the pay scale of Bihar Government employees, therefore, the Tribunal has not committed any error in allowing the revised scale of pay. According to him, the learned Single Judge has erred in holding that the Tribunal did not follow the principle of Region-cum-Industries Basis Theory. The learned Single Judge could not appreciate that it was a case where the union was demanding fair wages and a case of revision of wage structure was sought for, which the Management was capable of doing from the financial resources available to the Management by virtue of its big turnover of more than 25 crores at the relevant time.
Submissions of the Management (Respondent No. 3)
18. On the other hand, Sri Alok Kumar Sinha, learned counsel representing the Management would submit that there is no illegality or infirmity in the order passed by the learned Single Judge. According to him, the withdrawal of the reference from the Labour Court and transfer of the same to the Industrial Tribunal was done without hearing the Management and no reason was recorded by the Government in the Notification as contained in Annexure-4 to the Writ Application. Learned counsel further submits that the learned Single Judge has rightly held that the order dated 24.10.2003 would not operate as res judicata. He would further submit that the Presiding Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 13/28 Officer, Industrial Tribunal could not consider the guiding factors for revision of pay or fixation of pay-scale. The principle of Region-cum-Industries Basis Theory was not followed by the Tribunal and comparison of the pay scale of the workmen of Bharti Bhawan with that of the Bihar Government employees was also not just and proper, therefore, according to the learned counsel, the learned Single Judge rightly took a view that the impugned Award cannot be sustained in the eye of law.
Consideration
19. We have considered the rival submissions and have perused the records. A bare reading of the proviso to Section 10(i)(d) of the Industrial Disputes Act, 1947 would show that where appropriate government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing refer the dispute or any matter appearing to be connected with, or relevant to. the dispute, where it relates to any matter specified in the Second Schedule or the Third Schedule to a Tribunal for adjudication, the proviso reads as under:-
"Provided that where the dispute relates to any matter specified in the third schedule and is not likely to affect more than 100 workmen the appropriate government may, if it so thinks fit, make the reference to a Labour Court under clause (c)."
20. It is not in dispute that in the present case the reference Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 14/28 was likely to affect more than 100 workmen, therefore, the first notification, as contained in Annexure-3 to the Writ Application, sending the reference to the Labour Court was apparently in violation of the first proviso to Section 10(i)(d) of the Industrial Disputes Act. This position was pointed out by the union to the government and thereupon the government issued the second notification, as contained in Annexure-4 to the Writ Application, withdrawing the reference from the Labour Court and transferring it to the Industrial Tribunal, it was not more than a mere correction of the mistake (emphasis supplied). The Management challenged this transfer by filing a petition at the very first instance; the same was duly considered and the Presiding Officer, Industrial Tribunal passed a reasoned order dated 24.10.2003 (Annexure-9 to the Writ Application) rejecting the objection of the Management. This order dated 24.10.2003 was never challenged by the Management. The Management participated in the reference and finally, after 5 years, the Award was rendered. In these circumstances, it was not open to the Management to raise this issue once again before the Writ Court and we are of the view that the learned Single Judge has committed grave error of law in accepting the submission of the Management that the order dated 24.10.2003 shall not operate as res judicata.
21. In the case of Satyadhyan Ghosal & Ors. Vs. Smt. Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 15/28 Deorajin Debi & Anr., reported in AIR 1960 SC 941 (V 47 C 167) = 1960 (3) SCR 590, the Hon‟ble Supreme Court has considered and held that-
"8. The principle of res judicata applies also as between two stages in the same litigation to this extent that a court, whether the trial court or a higher court having at an earlier stage decided a matter in one way will not allow the parties to re-agitate the matter again at a subsequent stage of the same proceedings......"
22. A Three-Judge Bench of the Hon‟ble Supreme Court in the case of Workmen of the Straw Board Manufacturing Company Limited Vs. Straw Board Manufacturing Company Limited, reported in (1974) 4 SCC 681, observed as follows:-
"20. It is now well established that, although the entire Civil Procedure Code is not applicable to industrial adjudication, the principles of res judicata laid down under Section 11 of the Code of Civil Procedure, however, are applicable, wherever possible, for very good reasons. This is so since multiplicity of litigation and agitation and re-agitation of the same dispute at issue between the same employer and his employees will not be conducive to industrial peace which is the principle object of labour legislation bearing on industrial adjudication. But whether a matter in dispute in a subsequent case had earlier been directly and substantially in issue between the same parties and the same had been heard and finally decided by the Tribunal will be of pertinent consideration and will have to be determined before holding in a particular case that the principles of res judicata are attracted."
23. It is not a case where the transfer was made to a Tribunal which had inherent lack of jurisdiction, the reason given by the learned Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 16/28 Single Judge that because the government notification did not contain a reason for transfer and, therefore, violated a mandatory requirement of Section 33(B), which would be amenable to a challenge even at this stage of writ proceeding, is not a correct view. The order dated 24.10.2003 is a final and bindiong order which decided an Issue raised by the Management finally, it contains reasons and if the reasons are very clear from the provisions of law itself as contained in Section 10(i)(d) of the Industrial Disputes Act, 1947, the Management cannot be allowed to take a plea that reference to the Tribunal done in accordance with law would be rendered futile because it does not contain reasons. We, therefore, take a view that the first ground on which the Award has been interfered with has not been correctly appreciated by the learned Single Judge. The principle of „Res judicata‟ applies and we hold accordingly.
24. The second ground on which the Award has been interfered with is also not acceptable to us. The learned Single Judge has taken a view that the Tribunal has not considered the principle of Region-cum-Industries Basis Theory and that the petitioner himself had brought the materials before the Tribunal to demonstrate that the petitioner has no financial capacity to meet the demands of the respondent no. 2 and the employees of the petitioner are getting more financial benefits than the employees of the industries of the similar Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 17/28 nature in the region. The observations of the learned Single Judge on this issue are not well founded. It is not the case of the Management that the Tribunal did not consider a particular document brought before the Tribunal by way of evidence. A perusal of the Award would show that the Management did not produce any evidence before the Industrial Tribunal to show that they had no financial capacity to meet the demands of the respondent no. 2. It is not the case of the Management that they were running in loss or had any accumulated loss in their balance sheet (emphasis supplied). The learned Single Judge is also not correct in taking note of the submission of the Management in absence of any evidence that with approval the employees of the petitioner are getting more financial benefits than other industries of similar nature in the region. No such material has ever been produced by the Management before the Industrial Tribunal.
25. We have gone through the evidences considered by the learned Industrial Tribunal in the impugned Award. The case of the workmen was that the pay of the workmen had not been revised from 1982. They mainly prayed that the pay be revised at least from 1996 and fair wages be fixed as follows:-
(i) Cadre Basic Pay Dearness Allowance House Rent Peon 2500-55-2720 25% 25% Assistants 3000-75-3300 25% 25% (Clerks) Technical Staff 4000-100-4400 25% 25% Supervisor 4500-110-4940 25% 25% Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 18/28 After every 3 years 30% of the basic pay, allowance be added to the basic pay and accordingly the yearly increment be fixed."
26. The Management took a stand that revision of wages at Bharti Bhawan had a continuous process in which some benefits of wages are revised and enhanced every year and hence revision of wage structure every 3 or 4 years is not required. They pointed out that the Management of Bharti Bhawan is a publishing firm, very small in comparison to the public giants of India. They claimed that the Management is paying variable dearness allowance, statutory contribution, medical allowance, bonus and incentives, therefore, they opposed the prayer of the workmen for pay revision. The workmen produced 5 witnesses whereas the Management produced 6 witnesses to support their respective case. The documentary evidences referred by the Industrial Tribunal in the impugned Award were also adduced by the parties. The Management produced computerized salary sheets of the months of July, 1994 to 2003 (Exhibits M/2 to M/11) to show that in the month of July every year, wages have been revised resulting in increase of total wages of all the employees. The learned Tribunal found that increase in pay by way of yearly increment and increase in dearness allowance cannot be said to be a pay revision. The Tribunal further found that the Management did not bring on record a single order of pay revision to prove that pay of the employees of the firm has Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 19/28 been revised after 1982 (emphasis supplied).
27. The Tribunal has discussed the evidence brought on record on behalf of the Management, there is a letter dated 03.07.2003 (Exhibit M) written by one of the partners of Bharti Bhawan requesting a Chartered Accountant (MW3) to carry out a Break-Even Analysis and Feasibility Study of Bharti Bhawan to understand the financial health of Bharti Bhawan. Accordingly, the said Chartered Accountant firm carried out a Break-Even Analysis and Feasibility Study and prepared a report on 23.07.2003 which was handed over to Bharti Bhawan. The said report has been brought on record before the Tribunal as Exhibit M/1. The said MW3, in his deposition, has referred the report showing that the Break-Even point of Bharti Bhawan is very high and the Break-Even Analysis of another very renowned publisher, namely, Navneet Publication (India) Ltd. for the year ending 30 th September, 2001 was better than Bharti Bhawan. A summary of the Profit & Loss A/C of Navneet Publication and the Annual Report of Navneet Publication were produced for a comparison of the summarized Profit & Loss A/C of Bharti Bhawan. On the strength of these documents, it was impressed upon the Tribunal that although Bharti Bhawan is a much smaller publishing house than Navneet Publication in terms of turnover, still Bharti Bhawan has been bearing more financial burden towards meeting the cost of employees. Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 20/28
28. We do not find any evidence on the record brought by the Management to show that Bharti Bhawan was paying better remuneration to its employees than Navneet Publication. We also do not find any documentary evidence produced by the Management to show that its financial health would not permit revision in pay scale even after 15 years from the last pay revision. A report prepared in the year 2003 during the pendency of the reference before the Tribunal only showing a comparison of the Break-even point between the publishing firms would be of no avail because of the assumptions and presumptions which are taken for purpose of preparation of such reports. The main purpose of break-even analysis is to determine the minimum output that must be exceeded for a business to profit. If the business does not think that they can sell the required units, they could consider (i) Reducing the fixed cost through reductions in rent, or through better management of bills or other costs, (ii) Reduce variable costs, for example, finding a new supplier on lesser cost and (iii) Increase the quantity of sale. In the present case, admittedly the Management of „Bharti Bhawan‟ has crossed the break-even point. It is not the case of the Management that they are enable to earn profit because of failure to achieve the break-even point also known as „Target Income Sale‟. Further, the Margin of Safety represents the strength of the business. In break-even analysis, Margin of Safety is the Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 21/28 extent by which actual or projected sales exceed the break-even sales. It may be arrived at by applying following formula-
Margin of Safety = (Current output - break-even output) Margin of Safety% = (Current output - break-even output) / Current output x 100
29. By inserting different prices to the formula one can obtain a number of break-even points, one for each possible price charged. The Management of „Bharti Bhawan‟ on the strength of the report showing break-even analysis has shown that its‟ Margin of Safety is only 10% which clearly means that it‟s business is running in profit. 10% Margin of Safety may be a substantial amount in lakhs and lakhs of rupees. The Management relied upon the Safety of Margin of M/s Navneet Publication which was said to be over 50%, this may be a useful ratio analysis for comparing the health of two companies but there are certain limitations of ratio analysis be ti a financial ratio analysis or accounting ratio analysis.
30. In our opinion, the pertinent issue in this case is whether or not the demand for Pay Revision after about 14-15 years from the Last Pay Revision is justified? If yes, what relief may be granted to the workmen within the capacity of the Management to pay?
31. The Management was in possession of the documentary evidences, such as, its Profit & Loss A/C and Balance Sheet for the relevant years, i.e., 1996 and the same could have been produced before Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 22/28 the Industrial Tribunal if at all the Management had any plea with regard to it‟s financial capacity to pay but instead of producing the relevant documents, such as, Profit & Loss A/C and Balance Sheet of the relevant period which could have shown the actual profit earned, the Management of Bharti Bhawan, in its wisdom, thought just and proper to get prepared a Feasibility Report based on certain assumption to analyse the Break-Even point and that report was produced.
32. We have gone through the report prepared by Mr. Tara Chand, Chartered Accountant, which has been marked as Exhibit M/1 and is placed as Annexure 15/A to the Writ Application. A bare perusal of the said report would show that the Chartered Accountant has prepared the report taking the Audited Profit & Loss A/c in a summarised vertical format and the Audited Profit figure has been adjusted by following two figures to arrive at a „Hypothetical (Actual) Profit‟ figure. The income tax as actually paid/payable by the Firm on its profit has been deducted to arrive at Profit After Tax and the Profit After Tax has been arrived by further adjustments for debtors which, according to the Chartered Accountant, are actually appearing to him as difficult to be recovered. The Margin of Safety shown in his report has been calculated keeping the Total Actual Sales Value static and taking different scenario in case of rise in the cost of employee. This kind of adjustments and hypothetical figures taken for purpose of comparing Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 23/28 the cost of employee between Bharti Bhawan and M/s Navneet Publication is of no avail and cannot and in no way indicate that the Management of Bharti Bhawan is not capable of bearing the financial burden arising out of revision of pay. Further, the deposition of said Tara Chand would show that in course of cross-examination he has admitted that in the year 2000-2001 and in 2001-2002 Bharti Bhawan has paid income-tax of Rs. 29,43,000/- and Rs. 27,31,000/- respectively which clearly demonstrate and given strength to the submission of the Workers‟ Union that the Management of Bharti Bhawan is earning huge profit and is capable of bearing financial burden arising out of revision of pay.
33. The Hon‟ble Supreme Court in the case of Ajay Kumar D. Amin Vs. Air Force, reported in (2016) 12 SCC 566, observed as under-
"7. Again, in support of the said proposition, the Commissioner for Taking Accounts rightly placed reliance upon the judgment of this Court in Gopal Krishnaji Ketkar v. Mohd. Haji Latif (AIR 1968 SC 1413), wherein this Court held that under Sections 114(g) and 103 of the Evidence Act, 1872, a party in possession of best evidence which throws light on the issue in controversy withholding it, the Court ought to draw an adverse inference against it notwithstanding that onus of proof does not lie on him and the party cannot rely on abstract doctrine of onus of proof or on the fact that he was not called upon to produce it."
34. Since Bharti Bhawan was in possession of the Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 24/28 documents relating to its financial health showing their capacity to pay which were not produced before the Tribunal, we following the ratio of judgment of the Hon‟ble Supreme Court in the case of Ajay Kumar D. Amin (Supra) would draw an adverse inference. We take a view that the Management of Bharti Bhawan is capable of bearing financial burden arising out of revision of pay scale. This adverse inference is corroborated from admitted position emerging from the report prepared by a Chartered Accountant at the instance of the Management which shows Margin of Safety, i.e. in other words the Management has crossed break-even point and is earning profit.
35. The learned Single Judge could not appreciate one more thing that the workmen were demanding fair wages saying that their pay should be revised with effect from 1996, i.e., after a period of 15 years from the date of the last revision. Here it would be important to note as to what is a Fair Wage? The Committee on Fair Wages, for the first time, in the year 1948 and then the 15th Session of the Indian Labour Conference held in 1957 propounded certain wage concepts, such as, Minimum Wages, Fair Wages, Living Wages and Need-Based Minimum Wages. While the first three types (concepts) of wages were defined by the Committee on Fair Wages, the last one was defined by the 15th Session of the Indian Labour Conference. These definitions are considered here one by one.
Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 25/28
(i) Minimum Wage: A minimum wage is a compensation to be paid by an employer to his workers irrespective of his ability to pay. The Committee on Fair Wages has defined Minimum Wage as "the wage must provide not only for the bare sustenance of life, but for the preservation of the efficiency of the workers. For this purpose, Minimum Wage must provide some measures of education, medical requirements and amenities".
(ii) Living Wages: A Living Wage is one which should enable the earner to provide for himself and his family not only the bare essentials of food, clothing and shelter but a measure on frugal comfort including education for his children, protection against ill-health, requirement of essential social needs and a measure for insurance against the more important misfortunes, including old-age. Thus, a Living Wage represents a standard of living. A Living Wage is fixed considering the general economic condition of the country.
(iii) Fair Wages: A Fair Wage, according to the Committee on Fair Wages, is the one which is above the Minimum Wage but below the Living Wage. The lower limit of the Fair Wage is obviously the Minimum Wage; the upper limit is set by the capacity of the industry to pay. The concept of Fair Wage is essentially linked with the capacity of the industry to pay.
(iv) Need-Based Minimum Wages: The Indian Labour Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 26/28 Conference, in its 15th Session held in July, 1957, suggested that Minimum Wage should be need-based and should ensure the minimum human needs of the industrial workers, irrespective of any other consideration.
36. We have found that the learned Tribunal has gone through the summary sheets which were provided by the Management. The same is enclosed as Anneuxre-16 to the Writ Application. It is hard to believe that how these workers are surviving on the meager amount of salary. The submission of the Management that the learned Tribunal has gone beyond its jurisdiction in comparing the pay scale of a private organization with that of the employees of the State Government is totally misfounded and misplaced. The learned Tribunal has rightly and logically considered what was being paid to a workman of Bharti Bhawan in the year 1981 and to a government employee in the same year. It was found that the wages being paid to an employee of Bharti Bhawan was much less than the payments being received by a Bihar Government employee. The Tribunal thereafter took note of the pay scale of a Bihar Government employee after revision of pay in the year 1996 and then following the same differences which were there between the two class of employees, i.e., employees of the private organization and the government organization, in the year 1981 the Tribunal fixed a pay-scale for the workmen of Bharti Bhawan which is Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 27/28 much lower than the pay-scale of the State Government employees; therefore, the Tribunal has consciously acted and fixed the pay-scale of the workmen of Bharti Bhawan in the same manner as it was existing in the year 1981 if compared with the pay scale of the Bihar Government employees. We have taken note of the concept of Fair Wages here-in-above, the Management has failed to prove that it has no financial capacity to pay, in the Writ Application only a vague plea on this ground has been taken, therefore, come to a conclusion that the Industrial Tribunal has not committed any illegality or jurisdictional error of any kind in comparing the pay-scales of the workmen of Bharti Bhawan with that of the employees of the Bihar Government in the year 1981 and thereby maintaining the differences while fixing the pay-scale for the workmen of Bharti Bhawan on revision of pay in the year 1996. We are of the considered view that the demand for Revision of Pay is fully justified, the Management has capacity to pay the revised pay as fixed by the Industrial Tribunal. The Tribunal has rightly exercised its‟ jurisdiction as an Industrial adjudicator to keep industrial peace and harmony.
37. Learned counsel for the Management has cited some judgment as mentioned in the Writ Petition to apply in cases where Region Wise Industries Theory is applicable. We accept the contention of the workmen that it is not one of those cases where Principle of Patna High Court LPA No.2250 of 2015 dt. 18-10-2017 28/28 Region-cum-Industries basis theory is to be applied. Thus those judgments are distinguishable in the facts of this case and cannot come to the rescue of the Management.
38. The learned Single Judge has, therefore, erred on both counts and wrongly allowed the Writ Application by setting aside the impugned award. The impugned judgment dated 29.07.2015 passed by the learned Single Judge in CWJC No. 9645/2007 is hereby set aside and the Award dated 22.02.2007 passed by the Industrial Tribunal, Patna in Reference Case No. 14/2003 is hereby restored. The Responent no. 3 shall comply with the award within a period of three months from today.
39. In the result, Letters Patent Appeal stands allowed. There will be no order as to costs.
(Rajeev Ranjan Prasad, J) I agree.
Ajay Kumar Tripathi, J. -
(Ajay Kumar Tripathi, J)
Dilip, AR
AFR/NAFR AFR
CAV DATE 18.09.2017
Uploading Date 18.10.2017
Transmission N/A
Date