Shivraj Fine Arts Litho Works: Vasant Fine Arts Litho Works: Shakti Offset Works, Nagpur vs State Industrial Court, Nagpur

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1978 Supreme(SC) 88

SUPREME COURT OF INDIA
N.L. UNTWALIA, JASWANT SINGH AND P.S. KAILASAM, JJ.
Shivraj Fine Arts Litho Works and others, Appellants
Versus
The State Industrial Court, Nagpur and others, Respondents.
Civil Appeals Nos. 2418, 2419 & 2643 of 1972
Decided on 28-2-1978.
(1) Civil Appeal No. 2418 of 1972:
(2) Civil Appeal No. 2419 of 1972:
Vasant Fine Arts Litho Works, appellant
Versus
State Industrial Court, Nagpur and others, Respondents.
And
(3) Civil Appeal No. 2643 of 1972:
Shakti Offset Works, Nagpur, Appellant
Versus
State Industrial Court, Nagpur and another, Respondents.
Advocates appeared
Mr. P. N. Phadke, Sr. Advocate (M/s. A. G. Menezes, J. N. Sihna and K. J. John, Advocates with him), for Appellants in C. A. Nos. 2418-2419 of 1972.
Mr. M. C. Bhandare, Sr. Advocate (M/s. V. P. Sathe and Mrs. S. Bhandari, Advocates with him), (for No. 2) and Mr. P. C. Bhartari, Advocate (for No. 8), for Respondents.
C. A. No. 2418 of 1972 set down ex parte against RR. 1, 3, 4, 7, 9 and 11.
C. A. No. 2419 of 1972 set down ex parte against RR. 1, 3, 4, 6 and 12. M/s. Shankar Anand and A. G. Ratnaparkhi, Advocates for Appellant in C. A. No. 2643 of 1972; M/s. V. P. Sathe and Mrs. S. Bhandari, Advocates, for Respondent No. 2 in C. A. No. 2643 of 1972.

Advocates:
A.G.MENESSES, A.G.Ratnaparkhi, J.N.Sinha, K.J.JOHN, M.C.BHANDARE, P.C.BHARTARI, P.N.Phadke, S.Bhandan, S.Bhandare, Shanker Anand, V.P.Sathe

Headnote:
Disputes Settlement Act, 1947 - Section 38-A – Circumstantial evidence – Employment and service – Trial court - Industrial Court made its award on May 10, 1968. The award divided the employers into two classes being Classes A and B on the basis of the financial capacity of the employers to pay. The award fixed rates and scales of wages for the employees of the three employers in Class A being Litho Works. The award did not fix any rates and scales of wages in respect of other units of the industry the reason being that they did not have adequate financial capacity. In the case of Class A the award also fixed the employees of various duration of service by way of fitment into the scales of wages awarded in the award. It also fixed the date from which the new rates and scales of wages are to be deemed to have commenced - Against the award six writ petitions were filed before the High Court, three by the appellants in this Court Fine Arts Litho Works Fine Arts Litho Works and Offset Works. Another three writ petitions were filed by the employees, they being Special Civil Application – Held, As we have not agreed with the view of the High Court that an industrial minimum should be fixed by the Tribunal even though it was fixed by the Government under the Minimum Wages Act, the judgment of the High Court cannot be sustained. As in the absence of an appeal by the employees final decision can only be by the Tribunal, we confirm the order of the High Court remanding the matter for a fresh disposal by the Tribunal. But as we do not agree with some of the conclusions arrived at by the High Court we modify the order of remand. We confirm the classification of the industries into Class A and B as determined by the Tribunal and the High Court. We also find that the appellants and industries belonging to Class A are in a position to pay fair wages. We also find that so far as the order of the Industrial Tribunal as confirmed by the High Court that industries classified as B are not in a position to pay anything more than the minimum wages under the Minimum Wages Act is concerned it will have to be confirmed - High Court has found that the determination of the paying capacity of the industry has not been satisfactory. It has found that some of the accounts maintained by the industry are suspicious and cannot be accepted. The Tribunal will have to examine the account afresh and determine the paying capacity. In fixing the paying capacity the Tribunal will have to fix the income as well as permit deductions and allowances properly incurred. There can be no dispute that expenses incurred for purchase of raw material, maintenance of the factory, expenses incurred towards rent, public charges, maintenance of the establishment and expenses incurred in marketing of the product should be deducted. The items mentioned above are not exhaustive. As to whether a particular item of expenditure is liable to be deducted or not will have to be determined on the facts of the case. This Court has clearly laid down that no deduction should be allowed for payment of income-tax or for allowances made for depreciation or for making provision for reserves. So far as expenses incurred towards payment of wage bill inclusive of dearness allowance, bonus, gratuity etc., are concerned they will have to be deducted. After properly determining the paying capacity of the industry the Tribunal will have to proceed to fix fair wages which would include the fitment, scale of wages and dearness allowance - Appeals partly allowed

JUDGMENT

P. S. KAILASAM, J.:— These three appeals are filed by the Shivraj Fine Arts Litho Works, Vasant Fine Arts Litho Works and Shakti Offset Works by special leave granted by this Court against the decision of the Nagpur High Court. The history of the industrial dispute may be shortly stated.

2. The dispute relates to the Litho Industry in the Vidarbha region. An award known as the Puranik Award was made on October 26, 1956. The award fixed Rs. 35/- as the minimum wage but did not attach any scale of pay to the basic pay of Rs. 35/- for the unskilled employees. By a notice dated January 22, 1958 the employees of the Litho Industry gave notice of change and as result the Puranik award stood terminated as from July 22, 1958. The employees of Shivraj, Shakti and Raj gave notice of change dated September 2, 1960 making certain demands against their respective employers. On March 13, 1961 the employees of the said three Units filed three references under Section 38-A of the C. P. and Berar Industrial Disputes Settlement Act, 1947 before the State Industrial Court, which were numbered as references 9, 10 and 11 of 1961. When the three references were pending employees of other industrial concerns made certain demands against their employers. Pending the decision in references 9, 10 and 11 of 1961 an agreement was entered into on February 21, 1964 between the employers and the employees of various concerns requesting the State Government to exercise its power under Section 39 of the Act and to refer to the arbitration of the State Industrial Court the disputes mentioned in that agreement. On January 7, 1965 the State Government issued its notification making a reference to the State Industrial Court under Section 39 of the Act. By the notification the Government referred the disputes in respect of the demands of the employees set out in Schedule II of the notification made against the 10 employers specifically mentioned in Schedule I to the notification, being the employers in the Litho Press Industry in the Vidarbha region. The demands that are set out in Schedule II are 15 in number but as we are concerned only with demands 3, 4, 5, 6 and 7 we will leave the rest out of consideration. Demand No 3 relates to the disputes to living wage and Demand No. 4 for scales of wages for each category and occupation. Demand No. 5 if for fitment of the employees already in service at the date of the demand. Demand No. 6 is that the revised scales of wages should be given with retrospective effect from 1958 and Demand No. 7 is for dearness allowance with retrospective effect from 1959 and that the dearness allowance should be linked with the index number at the rate of 2 paise per point with 1955 as 100. The State Government by its notification dated Dec. 31, 1964 fixed Rs. 70/- per month as the minimum wage under the Minimum Wages Act. The notification divided the employees into several classes. It did not attach any scale of pay to the minimum wages fixed but provided that at an interval of every six months the State Government may issue a notification fixing certain amounts payable in addition to the minimum wages as special allowance.

3. The Industrial Court made its award on May 10, 1968. The award divided the employers into two classes being Classes A and B on the basis of the financial capacity of the employers to pay. The award fixed rates and scales of wages for the employees of the three employers in Class A being Shivraj, Shakti and Vasant Litho Works. The award did not fix any rates and scales of wages in respect of other units of the industry the reason being that they did not have adequate financial capacity. In the case of Class A the award also fixed the employees of various duration of service by way of fitment into the scales of wages awarded in the award. It also fixed the date from which the new rates and scales of wages are to be deemed to have commenced.

4. Against the award six writ petitions were filed before the High Cou

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1978 Supreme(SC) 88

Cases Referred (11)