Judgment

GOSWAMI, J.:- The only question with which we are concerned in these appeals by special leave is : Should there be a ceiling on dearness allowance in this case?

2. On May 11, 1966. the employers gave a notice of change for placing a celling on dearness allowance (for brevity D.A.) already in vogue at the figure of Rs. 325/-. Since this was not acceptable to the union, both sides agreed for a reference to the Industrial Tribunal, Maharashtra: By the impugned order of January 24, 1973, the Tribunal removed the ceiling and hence this appeal.

3. There was also another demand with regard to the D. A. for drivers on the same basis as that for clerical staff. The Tribunal following this Court s decisions in Bengal Chemical & Pharmaceuticals Works Ltd. v. Its Workmen (1969) 2 SCR 113 and Greaves Cotton and Co. v. Their Workmen, (1964) 5 CR 362 allowed the union s claim for the two categories to be treated on equal footing. This Court held in the above decisions that employees getting the same wages should get the same D.A. irrespective of whether they are working as clerks or as members of subordinate staff or as factory workmen. This part of the award is, therefore, rightly not challenged before us.

4. The reference was made in June 1966, there was an earlier award in the reference. At the instance of the management, the High Court set it aside and remanded the above two items of dispute alone for disposal. The tribunal had in the earlier award rejected all other claims of the union including that of revision of wage scale.

5. The only point that survives, therefore, is with regard to the ceiling on D.A. When the reference was made in June 1966 the cost of living index for Bombay city was 626. At the time of the impugned award in January 1973 it rose to 906 and in December 1974 it reached 1335 mark.

6. Various expert committees and commissions have dealt with the question of wages and D.A. from time to time. Dearness allowance as such is not known in foreign countries with the exception of Ceylon and Pakistan. Whenever there is any significant rise in the cost of living in foreign countries there is a revision of wage rather than payment of any D.A. as such. D.A. in India is a relic of the First World War to cope with the rise of cost of living although then in the shape of ad-hoc payment not linked to any consumer price index. During the Second World War it was introduced in the form of a Grain Compensation Allowance to compensate the hardship of the employees for the rise in prices of foodgrains. So far as the Central Government employees were concerned, the Government constituted the First Pay Commission in 1947 to examine the wage structure. The Government of India also set up a Committee on Fair Wages and the report was submitted in June 1949. A Second Pay Commission was also constituted by the Government in 1959. The Government of India in August 1964 constituted a One-man Independent Body to enquire into the question of D. A. payable to the Central Government employees and the report was submitted in January 1965 by Shri S. K. Das. In July 1966, the Government of India appointed a Dearness Allowance Commission presided over by Shri P. B. Gajendragadkar. The Commission examined the principles which should govern the grant of D.A. to Central Government employees in future and was also required to review the formula for the grant of D.A. as recommended by the Second Pay Commission and to recommend, changes, if any. In December 1966, the Government of India set up a National Commission on Labour presided over by Shri P. B. Gajendragadkar with exhaustive terms of reference and the Commission submitted its report on August 28, 1969. Then in sequence came the report of the Third Pay Commission in 1973. The parties have extensively quoted from the above reports during arguments.

7. Historically and by the industrial texts and also observations of various commissions and committees, D.A. was regarded as "applicable to those employee