Judgment

R. S. PATHAK, J.:- This appeal by special leave has been preferred by Tata Consultancy Engineers against an award dated 20th December, 1978 of the Industrial Tribunal, Maharashtra, Bombay revising the wage scales of certain categories of employees and granting various other benefits.

2. Tata Consultant Engineers, at its inception, was a partnership firm but subsequently the partnership was dissolved and in 1974 the undertaking became one of the divisions of Tata Sons Limited. It functions as a consulting organisation and a service industry, and does not manufacture any product or carry on trade. Its work force consists of engineers and supervisors and different categories of workmen. Out of 665 employees at Bombay, the draftsmen and the administrative staff number 306. These workmen are members of the Tata Consultant Employees Union. They served a Charter of Demands in July. 1974, on the appellant, and as their demands were not accepted and conciliation proceedings proved fruitless, the State Government made a reference of the dispute under Section 10 (1) (d), Industrial Tribunal, Maharashtra for adjudication. The Reference was numbered I. T. No. 292 of 1975.

3. The Union filed a statement before the Tribunal claiming an upward revision of the wage scales and dearness allowance and an increase from fifteen years to twenty years in the span for earning annual increments. It was urged that the Efficiency Bar, as a feature of the wage scales, should be removed. The dearness allowance, it was claimed, should be 601 granted on a slab system. The claim of Union was resisted by the appellant. who maintained that the existing wage scales were fair and reasonable on a region-cum-industry basis and that it would not be possible for the appellant to bear the additional financial burden if the demands of the Union were accepted. Reference was made to the political uncertainty in Iran which had placed an appreciable part of the appellants business in jeopardy and to various other factors, peculiar to an engineering consultancy business, beyond the appellants control. There was fierce competition also, it was asserted, from other similar organisations.

4. The appellant had introduced various pay scales in 1973 and some time later they were revised. There was no separate dearness allowance until January, 1977 when it was introduced for the first time. House rent allowance was also paid. Dearness allowance became payable at 10% of the basic wage subject to a minimum of Rs. 50/- and house rent allowance at 30% of the basic salary. Noting those facts, the Tribunal observed that compared with the increased paying capacity of the appellant, an inference drawn from the prosperity enjoyed by the appellant over the years, there was definite need for revising the wage scales. It was pointed out that the dearness allowance and house rent allowance granted by the appellant made little impact in neutralising the cost of living. The need for revising the wage scales was not disputed by the appellant. In proceeding to revise the wage structure the Tribunal took into account the two principles involved in the process, the financial capacity of the industry to bear the burden of an increased wage bill, and the prevailing wage structure on an industry-cum-region basis. Wage Scale statements were filed by the parties before the Tribunal pertaining to several engineering consultancy organisations but in the absence of pertinent information concerning the strength of their labour force, the extent of their business, the financial position for some years, the capital invested, the precise nature of the business the position regarding reserves, dividends declared and future prospects of the company, the Tribunal found that it was unable to rely on them as comparable concerns. Holding it impossible in the circumstances to apply the principle of industry-cum-region basis, the Tribunal turned to a consideration of the financial capacity of the company to bear a