JUDGMENT

KULDIP SINGH, J.:- Special leave granted.

2. The Reptakos Brett & Co. Ltd. (hereinafter called the Company) is engaged in the manufacture of pharmaceutical and dietetic speciality products and is having three units, two at Bombay and one at Madras. The Madras factory, with which we are concerned, was set up in the year 1959. The Company on its own provided slab system of Dearnces Allowance (DA) which means the DA paid to the workmen was linked to cost of living index as well as the basic wage. The said double-linked DA Scheme was included in Various settlements between the Company and the workmen and remained operative for about thirty years. The question for our consideration is whether the Company is entitled to restructure the DA Scheme by abolishing the slab system and substituting the same by the Scheme - prejudicial to the workmen - on the ground that the is lab system has resulted in over-neutralisation thereby landing the workmen in the highwage island.

3. The first settlement between the Company and the workmen was entered into on August 11, 1964. While accepting the double linked DA it further provided variable DA limited to the cost of living index up to 5.415.50. Further relief was given to the workmen in the settlement dated July 18, 1969 when the limit on the variable DA was removed. The Company revised the rates of DA on August 7, 1971. Thereafter, two more settlements were entered into on July 4, 1974, and January 4, 1979, respectively. Slao system with variable DA continued to be the basic constituent of the wage-structure in the Company from its inception.

4. The position which emerges is that in the year 1959 the Company on its own introduced slab system of DA. In 1964 in addition, variable DA to the limited extent was introduced but the said limit was removed in the 1969 settlement. The said DA Scheme was reiterated in the 1979 settlement. It is thus obvious that the slab system of DA introduced by the Company in the year 1959 and its progressive modifications by various settlements over a period of almost thirty years, has been consciously accepted by the parties and it has become a basic feature of the wage structure in the Company.

5. The workmen raised several demands in the year 1983 which were referred for adjudication to the Industrial Tribunal, Madras. The Company in turn made counter demands which were also referred to the said Tribunal. One of the issues before the Tribunal was as under:-

"Whether the demand of the Management for restructuring of the dearness allowance scheme is justified, if so, to frame as schemes,

The Tribunal decided the above issue in favour of the Company and by its award dated October 14, 1987 abolished the existing lab system of DA and directed that in future dearness allowance in the Company, be linked only to the cost of living index at 33 paise per point over 100 points of the Madras City Cost of Living Index 1936 base. The Tribunal disposed of the two References by a common award. The Company as well as the workmen filed separate writ petitions before the Madras High Court challenging the award of the Tribunal. While the two writ petitions were pending the parties filed a joint memorandum dated June 13, 1988, before the High Court in the following terms:

"In view of the settlement dated 13-5-1988 entered into between the parties, a copy of which is enclosed, both the parties are not pressing their respective writ petitions except with regard to the issue relating to restructuring of dearness allowance."

6. The learned single Judge of the High Court upheld the findings of the Tribunal on the sole surviving issue and dismissed the writ petition of the workmen. The writ appeal filed by the workmen was also dismissed by the High Court by its judgment dated September 14, 1989. The present appeal by special leave is against the award of the Tribunal as upheld by the High Court.

7. Mr. M. K. Ramamurthi, learned counsel for the appellants has raised the following points for ou