Bombay High Court
Transport Corporation Of India Ltd. And ... vs Maharashtra Rajya Mathadi Transport ... on 2 May, 2002
Equivalent citations: (2002)IIILLJ835BOM
Author: Nishita Mhatre
Bench: Nishita Mhatre
JUDGMENT Nishita Mhatre, J.
1. These Petitions are directed against the Award of the Industrial Tribunal granting a wage rise to the workmen employed with the Petitioners who are road transporters. The Union representing the workmen employed with employers who had business in road transportation raised a dispute for change in their service conditions. The All India Transport Employees Association raised the dispute relating to general demands including wage scales, dearness allowance and transfer of employees employed with transporters which have establishments all over India. This dispute was referred for adjudication by the Appropriate Government on August 12, 1981 under Section 10(1)(d) of the Industrial Disputes Act, 1947. Reference was made in respect of Prakash Roadlines Private Limited and 258 other employers. By a corrigendum issued on February 25, 1982, the Government included 116 more employers in the Reference. An Award was made by the Industrial Tribunal on November 12, 1986. This Award was challenged by 28 transporters as well as the Union representing the workmen. The Writ Petitions were disposed of by this Court by a common judgment dated November 11, 1992. The Reference was remanded to the Industrial Tribunal as the Tribunal instead of fixing fair wages had fixed minimum wages as the wages payable to the workmen employed with the transporters. On remand, all the 28 transporters did not appear before the Industrial Tribunal. These transporters and the workmen who now came to be represented by the 1st and the 2nd Respondent Unions appeared before the Industrial Tribunal. While remanding the matter, this Court directed the Tribunal to consider only the three demands, namely, basic pay, dearness allowance and whether transfers should be effected of the employees with consultation of the Union. Evidence, both oral and documentary, was let in before the Tribunal and an Award was made by the Tribunal on August 29, 1997. The Tribunal allowed the reference in respect of Demand No. 1 regarding basic pay scale and also in respect of Demand No. 4 regarding dearness allowance. However, the demand regarding transfer of employees with consultation of the Union was rejected. The transporters have in a fresh round of litigation in this Court impugned this Award.
2. The main thrust of the argument raised by the learned counsel on behalf of the Petitioners is that most of the transporters had entered into agreements with their respective workmen during the pendency of the reference and which were filed on record before the Tribunal. The Tribunal had endorsed these settlements as "Allowed" and, therefore, the Award should have been made in terms of these settlements in respect of all the petitioners. He urged that the workmen have not discharged their burden by proving that they were entitled to increase in wage scales and dearness allowance. In support of this argument that the workmen had not proved their case, the learned counsel relied on the judgment in the case of Narang Latex and Dispersions Pvt. Ltd. v. S. V. Suvarna (Mrs. ) and Anr. reported in 1995-I-LLJ-113 (Bom-DB). Placing reliance on the case of Pottery Mazdoor Panchayat v. Perfect Pottery Co. Ltd. and Anr., and on New Standard Engg. Co. Ltd. v. N.L. Abhyankar and Ors., it is also submitted that the Tribunal, while adjudicating the demands has awarded pay scales far in excess of what was demanded by the workers in 1981. Further, it was submitted that the Tribunal had not cared to calculate the burden which would be imposed on the employers while granting the demands of the workmen. He submits that the Tribunal has not kept in mind the observations of the Apex Court made in Killick Nixon Ltd. v. Killick & Allied Companies Employees' Union, regarding depreciation. As these observations have not been considered by the Tribunal, the burden cast on the transporters, according to the learned counsel is huge and excessive as well as unbearable which would lead to closing down of the business. Further, it was argued that the material produced on record before the Tribunal was not considered by it and, therefore, the Award must be set aside.
3. Dr. R.S. Kulkarni and Mr. M.N. Ganguli appearing for Respondent Nos. 2 and 1 respectively, submitted that the settlements entered into by the transporters with individual workman could not defeat the Reference as these settlements were not fair and just. According to the learned counsel, what was payable under the settlements were the minimum wages and, therefore, this was not in consonance with the judgment of this Court while remanding the matter to the Tribunal as the Tribunal had been directed to consider the fair wages which would be payable to the workmen. The learned counsel further submitted that the burden of proof that the employer had no capacity to bear the additional financial burden which would be imposed on account of the demands being granted, is on the employer and if no pleadings or evidence with respect to the burden is placed before the Tribunal, the Tribunal would be entitled to draw adverse inference against the employer. They placed reliance on the judgment of the Apex Court in Karamchand Thapar & Brothers (P) Ltd. v. Their Workmen, . The learned counsel rebutted the contention of Mr. Cama for the transporters that the Tribunal had . awarded more than what was demanded by submitting that the total wage packet has to be considered while making an assessment as to whether the Tribunal awarded something more than what was demanded by the workmen and not merely the basic wage as was sought to be urged on behalf of the employers. Learned counsel further argued that the Consumer Price Index had increased monstrously from August 12, 1981 when the Reference was mad till the date on which the Award was made. This factor itself, according to the learned counsel, was a sufficient change in circumstances to warrant a change in the service conditions of the workmen. The learned counsel relied on the judgments of the Apex Court in the cases of Express Newspapers (Pvt.) Ltd. v. Union of India and Ors., , Kamani Metals & Alloys Ltd. v. Their Workmen, Vol. XXXII, FJR 64, and Workmen represented by Secretary v. Management of Raptakos Brett. & Co. Ltd. and Anr., in support of their submissions that what was awarded by the Tribunal were fair wages and was in consonance with the orders of this Court while remanding the Reference. As regards the submission of the learned counsel for the employers that the workmen ought to have led oral evidence before the Tribunal, it was submitted on behalf of the Unions, that this was not necessary as there was sufficient evidence on record to indicate that an upward revision was warranted. Moreover, according to the learned counsel, there was documentary evidence in the nature of balancesheet and profit and loss accounts which was produced by the transporters, to indicate that the transport business was prospering and the workers were therefore entitled to an upward revision in the pay scales and dearness allowance. Further, it was submitted that the settlements which were filed before the Tribunal were not in conformity with Section 2(p) of the Industrial Disputes Act, 1947 read with Rule 62 of the Industrial Disputes (Bombay) Rules, 1957 and, therefore, they could not be considered as legal and binding on the workmen, more so when they were neither fair nor just.
4. The workmen of Jaihind Roadways, the -2nd Petitioner in Writ Petition No. 676 of 1999 were represented by Mr. Joseph before this Court who filed an affidavit stating that all workers had settled the dispute with the employer and were agreeable to the wage scales under the settlement.
5. On going through the Award of the Tribunal with the help of the learned counsel for parties, I find that the Tribunal has painstakingly considered the Reference before it and has awarded the wage scales to the workmen after considering the profit and loss accounts and the balance sheets of the individual transporters which were filed before it. He has also considered the fact that the Index when the Reference was made was 459 at the 1960 series and that while making the Award, the Index figure had risen to 7206 in the 1934 series i.e. 1797 of the 1960 series when the award was being made. He has also considered the fact that minimum wages payable to the motor transport industry had been fixed by the State Government as under:
Skilled: Rs. 1,275/- p.m. Semi Skilled: Rs. 1, 150/- p.m. Unskilled : Rs. 1,050/- p.m.
6. The Tribunal has also considered the effect of the settlements filed on record. He has noted that although the settlements were filed and there is an endorsement made by the Tribunal on some settlements 'allowed', it was necessary to consider whether these settlements were fair and just especially in view of the fact that the settlements were not between the Petitioners and the Respondent Unions but with individual workman. The Tribunal has considered these settlements and has concluded that they were neither fair nor just. In respect of Jaihind Roadways, the Tribunal has observed that an order was passed on October 5, 1995 allowing the parties to file the settlement. The wages granted under this settlement are on the basis of the 1994 Notification for minimum wages for motor transport industries and therefore the Tribunal has rightly concluded that this would not be sufficient to comply with the directions of this Court while remanding the matter. The Tribunal has also considered the financial capacity of all the petitioners in Writ Petition No. 676 of 1999. In respect of Savani Transports, which is Petitioner No. 3 in Writ Petition No. 676 of 1999, the Tribunal has observed that although the settlement had been filed on April 1, 1997, the Court had passed an order "Other side to say". While considering this settlement, the Tribunal has found that the balance sheets and profit and loss accounts have not been produced by the employer and has therefore drawn an adverse inference against the employer. As regards the settlement between Associated Road Carriers, i.e. Petitioner No. 4 in Writ Petition No. 676 of 1999 and its workmen, the Tribunal has observed that it deprived the workmen of all the benefits which even the Patil Award gave to the workmen and, therefore, rejected the settlement in respect of the said employer. In the case of the settlement with Patel Roadways, Petitioner No.4 in Writ Petition No. 676 of 1999, the Tribunal has rejected this settlement as the settlement only mentioned that an ex gratia amount of Rs. 5,00,500/- would be disbursed amongst the workmen without any reference to the increase in wages and dearness allowance. Therefore, the Tribunal has considered all aspects of the matter regarding the settlements which were placed on record and has rightly come to the conclusion that these settlements were not fair or just or in accordance, with the directions of this Court while remanding the Reference.
7. I see no reason to differ from the view taken by the Tribunal in respect of these settlements. It is true that the Tribunal has initially allowed the settlements in respect of Jaihind Roadways, Associate Road Carriers, who are the petitioners in Writ Petition No. 676 of 1999. As regards Savani Transport, Deluxe Roadlines and Transport Corporation of India, the Tribunal had endorsed "Other party to say" and in respect of Patel Roadways, by an order of October 24, 1996, the Tribunal had made the endorsement "Reference disposed of. However, merely making such endorsements would not, in my view, amount to making an Award. While making an Award in terms of the settlements, the Tribunal is expected to consider whether the settlements filed are fair and proper. The Tribunal for cogent reasons has considered the settlements to be contrary to directions of this Court that the Award should grant fair wages to the workmen and not merely minimum wages or wages less than the minimum. In any event, these settlements do not give anything more than the minimum wages and this was not what was envisaged by this Court while remanding the matter. In fact, the Reference was remanded because the Patil Award was made only on the basis of minimum wages and, therefore, it would be travesty of justice to accept settlements which do not give anything more than the minimum rate of wages even on remand. In respect of the Petitioners in the other petitions also, it is obvious that the settlements only give a marginal rise more than the minimum rate of wages.
8. The contention of the learned counsel for the Petitioners that the Tribunal has erred by fixing wages at rates which are higher than what was demanded, has to be negatived. The pay-scales demanded and awarded by the Tribunal are as follows:
Grade Demand linked to CPI 200 (1960 Series) Award linked to CPI 7206 (1934 series) Grade I Rs 800-50-1200-75-1500 Accountant, Banking incharge, Delivery incharge, Head Cashier, Stenographer, Secretaries.
Rs.2878-100-3378-140-4678-160-5478 Accountant, Booking incharge, Delivery incharge, Head Cashier Stenographer, Secretaries.
Grade II Rs.
600-40-760-60-100 Account-Clerks, Cashiers, Office Clerks, Typists Clerks, Typists, Filing Clerks, Booking Clerks, Loading Clerks, Unloading Clerks, Delivery Clerks.
Rs.2616-80-3016-100-3516-120-4116-140-4816 Accounts Clerks, Cashiers, Office Booking Clerks, Loading Clerks, Unloading Clerks, Delivery Clerks.
Grade III Rs. 450-350-570-55-790 Markers, Office Attendants Rs. 2378-60-2678-80 (sic) 3078- 100-3578-420-4178 Markers, Office Attendants Grade IV Rs. 325-25-425-35-565 Peons, Watchman, Mazdoors, Loaders, Unloaders and Cleaners.
Rs. 2162-40-2362-80-3062-100-3562 Peons, Watchman, Mazdoors, Loaders, Unloaders (sic).
Now, if one compares the two wage scales, i, e. the demanded wages and what has been awarded, at first blush, it may seem that the submissions made by the learned counsel for the Petitioners are correct. However, the grades as demanded were on the basis of the Index in 1980. When the reference was made on August 12, 1981 the CPI was 459 (1960 series). This is equivalent to 2038 in the 1934 series. The Tribunal has merely computed the wages that would have been payable at that Index had the demand been granted in toto and has awarded those wage scales on the basis of the prevailing Index. What was demanded by the workmen in the fourth grade was Rs. 325-25-425-35-565. Had this demand been granted from the date of the reference when the CPI was 459 (1960 series) which would be equivalent to 2038 (1934 series) taking 4.44 as the linkage factor a workman would have been entitled to Rs. 661.70 as his total wage packet i.e. Rs. 325 as basic plus Rs. 336.70 as D.A. While making the award the Tribunal has pegged the wage scales at CPI 7208 which was the Index at the time of making the award (old series). After the addition of the dearness allowance, which has been awarded at Rs. 3/- per 10 points rise in the Index over 7206 to the basic wage of Rs. 2162, in January 1995 a workman would be entitled to Rs. 2180. However if what had been demanded had been accepted by the Tribunal the same workman would have been entitled a basic wage of Rs. 775 (assuming the yearly increment given to him would remain static at Rs. 35 after he reached the maximum in the scale) together with D.A. of Rs. 1914. Therefore the total amount that he would have received is Rs. 2689. Thus the amount awarded is less than the amount demanded by approximately Rs. 500. Similarly, in respect of the other grades, the wages which have been awarded are less than what has been demanded. Moreover, what is required to be considered during wage adjudication is not merely the basic wage, but the total pay packet. If the total pay packet is not more than what was demanded, then it is open for the Tribunal to grant such wages. The Industrial Court, as is well settled, can create contracts and, therefore, if the circumstances warrant, can also grant a higher wage scale than demanded, provided the total wage packet is not more than the demand. In the instant case, the demands were raised in 1980 and the Reference was made in the year 1981. Taking into consideration the situation prevailing at that point of time, the workers had demanded the above wage scales. However, while making the Award, it was necessary for the Tribunal to take into consideration the prevailing circumstances and make an Award accordingly. This is what the Tribunal has done and, therefore, I see no reason to interfere with the same.
9. The Apex Court in Kamani Steel Metal (supra), has while rejecting the submission of the employer that there was no change of circumstance justifying a revision of wages, pay scales or dearness allowance observed that judicial notice must be taken of the fact that commodity prices have soared high, the general level of wages has gone up and in some industries there have been two or three revisions already and in some others Wage Boards have been appointed while adjudicating a wage reference. It has further observed that if inspite of these factors there has been no upward revision in the Company the demand would be justified. Therefore, it is obvious that while adjudicating the Reference, the Tribunal was required to keep certain principles which the Apex Court has laid down in the forefront and to consider the fact that upward revision in wages must be given if the circumstances so warrant. The Apex Court has held in a number of cases that the Industrial Tribunal must strive to endeavour to see that workers are paid fair wages and not merely the minimum wages. Fair wages are something less than the living wages which are the ultimate goal, and more than the minimum wages which must be paid in any event. Fair wages which are fixed at a particular time may not remain fair with passage of time and the price increase and, therefore, a revision in wages is necessary. To a certain extent, this disparity is made up by payment of dearness allowance, but as the Apex Court has consistently taken a view that 100% neutralisation is not advisable, it is necessary to sufficiently bridge the gap between the wages and cost of living by revision of the wages as also the dearness allowance. The mere fact that there is an increase in the Consumer Price Index, justifies an upward revision.
10. Mr. Cama, learned counsel for the Petitioners, has assailed the Award on the ground that the Tribunal was not considered the fact as to whether the individual employers had the capacity to bear the burden cast on them by the Award. He submits that it was necessary for the Tribunal to calculate the burden before imposing it on the transporters. Not having done so, the Award is required to be set aside. He further submits that it is in fact the workmen who have not discharged their burden by leading evidence to prove why any wage increase should be given. However, in the case of Raptakos Brett (supra), the Apex Court has held that the Management can revise the wage structure to the prejudice of the workmen in a case where due to a financial stringency it is unable to bear the burden of the wage. But in an industry or employment where the wage structure is at the level of minimum wages, such a downward revision is impermissible, not even on the ground of financial stringency. It is, therefore, for the Management which is seeking restructuring of the dearness allowance to the disadvantage of the workmen to prove to the satisfaction of the Tribunal that the wage structure in the industry concerned is well above the minimum level and the management is financially not in a position to bear the burden of accepting the wage structure as demanded. This obviously means that it is for the employer to prove before the Tribunal that it would not be possible for it to bear the burden that would be cast on it if the demands are allowed.
11. In the case of Karamchand Thapar (supra), the Apex Court has observed that it is a settled principle of law that if the paying capacity of the employer increases or the cost of living index shows an upward trend, the industrial employees would be justified in making a claim for the re-examination of the rates of dearness allowance. The Tribunal will not be normally justified in rejecting the claim solely on the ground that enough time has not passed after the making of the last award. In the present case, there is no doubt that the cost of living index has increased steeply and that the Tribunal was required to make an upward revision in the pay scales. The Tribunal has done so after considering the documents on record including the balance-sheets and the profit and loss accounts. If the transporters had any justifiable reason to refuse to pay the wages as demanded, it was for them to file a statement on record to indicate the burden that would be imposed on them if the demands were granted in toto. Not having done so, the transporters cannot avoid payment of the amounts as awarded by the Tribunal.
12. In Express Newspapers (supra), the Apex Court has laid down certain principles to be considered by the Tribunal while adjudicating a wage Reference. The said principles are as under 1961-1-LLJ-339 at 367:
"(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 such capacity;
(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; and (3) that the proper measure for gauging the capacity of the industry to pay should take into account the elasticity of demand for the product, the possibility of tightening up the organisation 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 the increased rate should not be such as to drive the employer out of business."
This view has been reiterated in the case of Management of the Kirlampudi Sugar Mills Ltd. v. Industrial Tribunal, A. P. and Anr., .
13. In the present case, the Reference is between about 259 transporters and their respective workmen. Out of these, only 36 appeared before the Tribunal initially, and on remand, 28 appeared before the Tribunal. The Tribunal has considered a fair cross-section of the employers amongst these 28 transporters and their financial capacities. It has also considered the fact that there is an elasticity for the demand of the product i. e. transportation of goods, and the possibility of tightening up of the organizations when in difficulty so that the workmen would be able to enjoy the benefits of the Award. Therefore, the Tribunal, in my view, has not erred in any way by coming to the conclusion that the workmen employed by the Petitioners are entitled to a wage increase as directed by him.
14. The contention of the learned counsel for the petitioners that unless the workman steps into the witness box and leads evidence to justify his demand, it would not be open for the Tribunal to consider any wage increase must also be negatived. This is because the mere change in circumstance of the rise in the consumer price index is sufficient to warrant an upward revision in wages. What is the consumer price index prevailing at the time when the demand is raised or when the dispute is referred for adjudication or when Tribunal makes an Award is a matter of record based on the Notifications issued by the Government from time to time. Therefore, the oral evidence of the workman would be of no assistance to prove this fact. Further balance sheets and profit and loss accounts which are necessary to show the financial capacity of an employer are maintained by the employer and the workman again would not be able to throw any light on these aspects as the financial capacity is to be assessed by the Tribunal from the record made available to it. This record is to be produced by the employer if he pleads financial inability to implement the burden of an increased wage structure. The burden of proof to show that he has no financial capacity to withstand the burden imposed upon it would be on the employer as it is he who knows his financial position and the conclusive proof of that are the balance sheets which are normally in his possession. In the instant case, the Tribunal has considered and assessed the financial capacity of the transporters to bear the burden by taking into account the balance sheets and the profit and loss accounts of those who had produced them on record. He has rightly drawn adverse inference against those employers who had not cared to produce these documents or to substantiate their claim that they do not have the capacity to withstand financial burden which would be imposed upon them due to the demands. The Tribunal has considered the fact that most of the employers neither appeared nor filed their balance sheets and profit and loss accounts or the statement of salaries. The statement recording the strength of the employees also were not produced and since all these factors were within the knowledge of the transporters, the Tribunal has drawn an adverse inference, and held that the transporters were able to bear the burden. The Tribunal has also considered the fact that over the last fifteen years i. e. from the date when the Reference was made till the time of making an Award, the fixed assets of the companies have arisen from year to year and, therefore, it could not be said that the financial stability and capacity of the transporters was not good. He has also considered the elasticity of the business and the demand for such business. I therefore see no reason to accept the case of the transporters.
15. While raising the basic wages, the Tribunal has pegged the wages at Index 7206. He has given a ten per cent rise in every grade in accordance with the skill necessary for each grade. While linking the wage scales to the Consumer Price Index at 7206, the Tribunal has awarded an increase in the dearness allowance at the rate of Rs. 3/- per ten point rise in the index. I see no reason to interfere with the finding of the Tribunal.
16. As stated earlier, that in 1980 the demand was raised for a scale of Rs. 325-25-425-35-565, This amount was claimed as basic wages on the basis that Dearness Allowance as demanded at the rate of Re. 1.30 per point rise in the consumer price index over 200 points would be granted. This means that the total wage packet of the workmen in 1981, when the reference was made under 1960 series would be Rs. 661.70. Converting this into 1934 series, if a workman in grade IV had been awarded the entire demand of wage scales as well as Dearness Allowance, he would have got Rs. 670/-. On the same basis in 1995, when the award was made, the lowest grade worker would have been entitled to Rs. 2,644.60 as the total wage packet that is, the basic wage plus Dearness Allowance. Converting this into the 1934 series in January, 1995, this workman would have been entitled to Rs. 2,689/- i. e. basic wage plus Dearness Allowance. However, what the Tribunal has awarded is an amount of Rs. 2,180/-, that is Rs. 2,162/-, which is the basic awarded for this grade by the Tribunal plus Rs. 18/- as Dearness Allowance. Obviously, this means that what the Union had demanded was much more than what has been awarded by the Tribunal. Similarly, for other grades also; the demand is more than what has been awarded. Therefore, I see no reason to interfere with the finding of the Tribunal.
17. The vehemence with which the transporters have pleaded that the Tribunal has erred while granting these wage scales and Dearness Allowance on the ground that the demand was less than the award is surprising as the conception is wholly unfounded. The Tribunal has rightly considered the fact that a person in grade IV in the lowest scale at the initial stage of the scale would get Rs. 325/- had the demand been granted from the date of the reference. This person in 1995, when the award was made, would have put in atleast 15 years of service and would, therefore, be entitled to a higher basic wage calculated on the basis of the demand made in 1980. Converting this into 1934 series on the basis of which the Tribunal has made this award, the workman would be entitled to a higher salary than what has been awarded by the Tribunal.
18. In view of the above, the Award of the Tribunal is confirmed in the aforestated terms.
19. Writ Petitions are disposed of accordingly with no order as to costs.
20. Issuance of Certified Copy expedited.