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SUPREME COURT OF INDIA
P.K. GOSWAMI AND S. MURTAZA FAZAL ALI, JJ.
Union of India and another, Appellants
Versus
Majur Mahajan Mandal and others, Respondents.
Civil Appeal No. 690 of 1976,
D/- 16-12-1976.
Advocates appeared
Mr. G. S. Sanghi, Sr. Advocate, (Mr. Girish Chandra, Advocate with him), for Appellants; Mr. V. M. Tarkunde, Sr. Advocate, (M/s. K. L. Hathi and Mrs. P. C. Kapur, 716 Advocates with him), for Respondent No. 1.
Additional Emoluments Act 1974 – Constitution of India, 1950 - Article 226 - Interests of national economic development – Employment and service - whether by or under an agreement or settlement between the parties or any award....." comes within the sweep of the aforesaid definition clause - industrial disputes in respect of dearness allowance (D. A.) had been pending between the union and the mills in five references before the Industrial Court, Gujarat, being Reference Nos. 406, 407, 408, 409 and 421 of 1973. the rate of D. A. for the employees in the cotton textile industry in Ahmedabad had earlier been fixed by an award of an Industrial Tribunal which will be referred to hereinafter as the Ahmedabad Rate. The prevalent D. A. in 1973 in the mills with which we are concerned was 90% of the Ahmedabad Rate. the union was raising the aforesaid disputes for increasing the D. A. to 100 % of the Ahmedabad Rate with effect from October 1, 1972. Hence the above references were pending before the Industrial Court - As a result of negotiations between the parties during the pendency of the said disputes before the Industrial Court D. A. was agreed to be paid at the rate of 95 % of the Ahmedabad Rate of D. A. with effect from January 1, 1974, as will appear from an interim award of the Industrial Court dated June 21, 1974. Thereafter by further negotiations the disputes regarding D. A. were finally resolved by the mills and the union entering into a settlement on June 28, 1974, by fixing D. A. at 100 % of the Ahmedabad Rate with effect from January 1, 1974. Awards were later made by the Court in conformity with the said settlement in the pending disputes some time in August and September - It is not disputed that the workers of the mills in pursuance of the settlement of the disputes received D. A. at 100 % of the Ahmedabad Rate retrospectively with effect from 1st January, 1974. it may even be assumed that the arrear D. A. for the past period from January 1, 1974, was paid to the workers in August or perhaps even later, that is to say after 6th July, 1974, the significance of which date we will immediately see – Held, We are informed that the awards have not yet been published but that should not detain us in this case. It is common ground that the awards were in terms of the settlement which had retrospective operation from January - Settlement has merged in the awards the terms of the awards are those specified in the settlement. It is those dates which are, therefore, specified in the awards and, under Section 75 of the Bombay Industrial Relations Act, the awards came into operation with effect from January 1, 1974. The sanction of the awards in such a case is the sanction under the settlement and since the settlement was prior to July 6, 1974, the additional D. A. cannot be said to be sanctioned after the appointed day, 100 % of the Ahmedabad Rate of D. A. will be payable to the workers with effect from January 1, 1974 and the sanction for that rise was on 28th June, 1974, the date of the settlement which was prior to the appointed day - We have already noted the definition of additional D. A. in Section 2 (b) which is an integrated definition. The definition clause has twin components both of which will have to be satisfied in order that a particular amount can be held to be additional D. A. To put it clearly the two components - It is manifest that if the sanction is after the appointed day it is then only the question of additional D. A. will arise within the meaning of Section 2 (b). Once it is found that the sanction of rise in D. A. is prior to the appointed day, Section 2 (b) will not at all be attracted. In that event it will not be necessary even to consider the second component of the definition mentioned above. In the instant case we have already held that the rise in D. A. to 100 % of the Ahmadabad Rate of D. A. was sanctioned under the settlement of 28th June, 1974, that is, before the appointed day. One of the principal components of the definition clause is, therefore, clearly absent in this case since there is no sanction for any rise in D. A. after the appointed day - Appellants submits that in view of the aim and object of the Act the court should lean in favour of an interpretation advancing the remedy by construing the word "sanctioned" in Section 2 (b) to mean sanctioned by the award and not by the settlement. We have already given our reasons for our inability to accept this submission. One other reason may be added - Appeal dismissed
Judgment
GOSWAMI, J.:- This appeal on certificate is from the judgment of the High Court of Gujarat. The appellants 1 and 2 are respectively the Union of India and the Regional Provident Fund Commissioner. The 1st respondent is Majur Mahajan Mandal (hereinafter to be described as the union), a registered trade union representing the majority of the textile workers of the five textile mills of Baroda (respondents 2 to 6) who are not represented before us and who will be described hereinafter as the mills.
2. Since some time in 1973, industrial disputes in respect of dearness allowance (D. A.) had been pending between the union and the mills in five references before the Industrial Court, Gujarat, being Reference Nos. 406, 407, 408, 409 and 421 of 1973. the rate of D. A. for the employees in the cotton textile industry in Ahmedabad had earlier been fixed by an award of an Industrial Tribunal which will be referred to hereinafter as the Ahmedabad Rate. The prevalent D. A. in 1973 in the mills with which we are concerned was 90% of the Ahmedabad Rate. the union was raising the aforesaid disputes for increasing the D. A. to 100 % of the Ahmedabad Rate with effect from October 1, 1972. Hence the above references were pending before the Industrial Court.
3. As a result of negotiations between the parties during the pendency of the said disputes before the Industrial Court D. A. was agreed to be paid at the rate of 95 % of the Ahmedabad Rate of D. A. with effect from January 1, 1974, as will appear from an interim award of the Industrial Court dated June 21, 1974. Thereafter by further negotiations the disputes regarding D. A. were finally resolved by the mills and the union entering into a settlement on June 28, 1974, by fixing D. A. at 100 % of the Ahmedabad Rate with effect from January 1, 1974. Awards were later made by the Court in conformity with the said settlement in the pending disputes some time in August and September, 1974.
4. It is not disputed that the workers of the mills in pursuance of the settlement of the disputes received D. A. at 100 % of the Ahmedabad Rate retrospectively with effect from 1st January, 1974. it may even be assumed that the arrear D. A. for the past period from January 1, 1974, was paid to the workers in August or perhaps even later, that is to say after 6th July, 1974, the significance of which date we will immediately see.
5. While the aforesaid disputes were pending before the industrial Court. The Additional Emoluments (Compulsory Deposit) Act 1974 (briefly the Act), replacing the earlier Ordinance on the subject, came into force retrospectively from 6th July, 1974, the appointed day, under the Act. This Act was passed as the preamble says, "to provide, in the interests of national economic development, for the compulsory deposit of additional emoluments and for the framing of a scheme in relation thereto, and for matters connected therewith or incidental thereto."
6. The employees to whom the Act is applicable are classified into three categories, namely, employees of the Government, of local authorities and other employees.
7. The principal object of the Ordinance and later of the Act is to control the menacing inflationary trend which has been the bane of the countrys economy. On the one hand there has been persistent demand from employees for revision of wages and increase of D. A. on account of the high cost of living and on the other the State has to tackle the national problem of mounting pressure of inflationary forces. While, therefore, meeting with the demands for rise in emoluments, simultaneously, steps with equal force had to be taken so that the additional amounts disbursed do not immediately flow to the market adding a further fillip to inflation. The Ordinance and later the Act thus provide for compulsory deposit for a period of one year of the whole of the additional wages and for a period of three years of half of the additional D. A.
8. The additional emoluments earned are thu
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