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SUPREME COURT OF INDIA
(From : Award of Industrial Tribunal, Maharashtra)**
V.R. KRISHNA IYER, R.S. PATHAK AND O. CHINNAPPA REDDY, JJ.
Civil Appeal Nos. 2299 and 2300 of 1979, D/- 13-11-1980.
*Note :- Kind attention is invited to AIR 1981 SC 599 reported in March Part. Therein the minority judgment of Honble Mr. R. S. Pathak, J. only was printed and the Majority judgment by Honble Mr. V. R. Krishna Iyer and Mr. O. Chinnappa Reddy, JJ. could not be printed as unfortunately the copy of majority judgment was not received by that time.
The Tata Consulting Engineers, Appellant
Versus
The Workmen employed under them, Respondents.
And VICE-VERSA
Advocates appeared
Mr. G. B. Pai, Sr. Advocate (M/s. Manick A Gagrat, J. B. Dadachanji, O. C. Mathur and K. J. John, Advocates with him), for Appellants in CA No. 2299 of 1979 and Respondents in CA No. 2300 of 1979; Mr. V. M. Tarkunde, Sr. Advocate (M/s. P. H. Parekh, S. R. Deshpande and Miss Manik Tarkunde, Advocates with him) for Respondents in CA 2299 of 1979 and Appellants in CA No. 2300 of 1979.
In a consulting division of a Company wage scale introduced in 1973 was continued to be maintained at that level with slight revision some time thereafter. Dearness allowance and house rent allowance were introduced in 1977. These allowances made no appreciable impact in neutralising the increasing cost of living. During all these years this division continued to enjoy increasing profits. Charter of demand was made in July, 1974. On failure of conciliation, State Government made reference to Tribunal in 1975. The Tribunal after referring to various considerations gave retrospectivity to the revised pay scales ranging it back to 1-1-1976.
Per Majority :
Held that Tribunal did not err in attaching retrospectivity to the revised pay scales. (Paras 11, 19)
(B) Industrial Disputes (Central) Rules (1957), R.31 - Wage scale - Revision of - Jurisdiction of Tribunal - Ambit of - Award - Corrections under Rule 31 - When open.
Industrial Disputes Act (14 of 1947), Sch.3, Item 1.
Per O. Chinnappa Reddy, J. (for V. R. Krishna Iyer, J. and himself).
Implicit and intrinsically connected with the question of revision of the wage scales are the questions of fitment of employees into the wage-scales and flat or ad hoc increase of salaries of workmen wherever considered necessary. An Industrial Tribunal deciding upon the wage scales of the employees of an establishment will have full liberty to propose ad hoc increase of salarie as part of the revision of wages. Fitment into the revised pay scales is certainly a part of the revision of pay scales. This is elementary and fundamental to the jurisdiction of the Industrial Tribunal in revising wage scales. (Para 22)
Per R. S. Pathak, J.
The jurisdiction given to the Tribunal by Rule 31 is closely circumscribed. It is only a clerical mistake or error which can be corrected and the clerical mistake or error must arise from an accidental slip or omission in the award. An accidental slip or omission implies that something was intended and contrary to that intention what should not have been included has been included or what should have been included has been omitted. It must be a mistake or error amenable to clerical correction only. It must not be a mistake or error which calls for rectification by modification of the conscious adjudication on the issues involved. (Para 12)
The Tribunal made an award in respect of the wage scales of consulting 1089 division of a Company. Two days after making of the award, the employees Union filed application under R. 31 seeking correction of an error therein. The endorsement made by the Company on the application did not indicate that the Company had any objection to the award being corrected. In the award itself the Tribunal had come to the conclusion that the Company was in an undisputed position to bear the additional burden. The Tribunal clearly intended to give an all round flat increase. However, it was not clearly mentioned that all the employees were to get additional pay. So the application was filed under R. 31 which was allowed by the Tribunal. On appeal by special leave to the SC :
Per Majority (R. S. Pathak, J. contra) Held that the omission of the words "to each employee" after the figures of pay scale as revised was clearly an accidental slip or omission which the Tribunal was entitled to correct. It could not be said that the corrigendum was in effect a fresh award. (Paras 19, 25)
(C) Industrial Disputes Act (14 of 1947), Sch.3, Item 2 - Dearness allowance - Computation - Mode - Interference under Art. 136 of Constitution - Whether open.
Constitution of India, Art.136.
Per O. Chinnappa Reddy, J. (for V. R. Krishna Iyer, J. and himself).
Dearness Allowance linked to cost of living index is ordinarily the best and the most scientific method of computing dearness allowance. It cannot always be said that an illegality warranting interference under Art. 136 of the Constitution, is committed, if some other mode is adopted. (Para 26)
Per R. S. Pathak, J. :
It is not a universal rule that the dearness allowance should in all cases be correlated with the cost of living index. (Para 16)
Per Majority :
Held on facts and circumstances of the case that the Tribunal had given satisfactory reasons for adopting a different mode for computation of dearness allowance and as such it could not be interfered in appeal under Art. 136 of the Constitution. (Paras 26, 16)
Judgment
R. S. PATHAK. J. (Minority view) :- 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) to the 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 granted on a slab system. The claim of the 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 scale. 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
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