Full Judgment Text
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PETITIONER:
TATA CONSULTING ENGINEERS
Vs.
RESPONDENT:
WORKMEN EMPLOYED AND VICE-VERSA
DATE OF JUDGMENT13/11/1980
BENCH:
PATHAK, R.S.
BENCH:
PATHAK, R.S.
KRISHNAIYER, V.R.
REDDY, O. CHINNAPPA (J)
CITATION:
1981 AIR 599 1981 SCR (2) 166
ACT:
Industrial disputes-Tribunal making an award
prescribing revised grades/ scales of pay to different
categories with retrospective effect from 1st January, 1976-
Validity of retrospectivity of the award.
Industrial Disputes (Bombay) Rules, 1957-Rule 31, scope
of-Whether the clarification made by the Tribunal
prescribing that a flat increase of Rs.150 in the category
of Draughtsmen and Rs. 100/- in the case of the other
categories payable "to cach of its employees" amounts to a
supplementary award not permissible under Rule 31.
HEADNOTE:
Dismissing the appeals by special leave, the Court.
^
HELD: Per Pathak, J. (Krishna Iyer and Chinnappa Reddy,
JJ. concurring)
(1) Having regard to the financial capacity of M/s.
Tata Consulting Engineers, the appellant, and the material
on the record and the various other considerations which
prevailed with the Tribunal, the granting of revised wage
scales is in order. Although the wage scales were introduced
as long ago as 1973 they were maintained at that level
except for a slight revision some time thereafter. No
dearness allowance was paid until the beginning of 1977 and
the house rent allowance also was introduced about that
time. The cost of living had gone on increasing from 1972
onwards and the dearness allowance and house rent allowances
made no appreciable impact in neutralising the increasing
cost. During all these years, the appellant had continued to
enjoy increasing profits; nonetheless the emoluments
received by the workmen did not receive the impress of the
appellant’s growing prosperity. The Charter of Demands was
presented by the Union in July, 1974 and when conciliation
proceedings failed the State Government made a reference to
the Industrial Tribunal in 1975. The several considerations
which prevailed with the Tribunal giving retrospectivity to
the revised pay scales and referred to by it cannot be
ignored. [174C-G]
(2) It is not a universal rule that the dearness
allowance should in all cases be correlated with the cost of
living index. The Tribunal, in the present case, considered
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the matter and found it sufficient and in accord with
justice that the wage scales should be restructured with
suitable increments provided therein. It noted that dearness
allowance was being granted by the appellant at 10% of the
salary subject to a minimum of Rs. 50/- and house rent
allowance at 30% of the basic salary. Having regard to the
not inconsiderable improvement in the level of the basic
wage, it observed that there would be a consequent increase
in the dearness allowance and house rent allowance. In view
of the increase so secured, the Tribunal rejected the
suggestion that a slab system should be introduced in the
dearness allowance or that there should be any other
modification of the principle on which dearness allowance
was being presently granted. It declared that the cumulative
effect of an im-
167
proved wage structure together with dearness allowance
operating on a slab system would throw an impossible burden
of about Rs. 1 crore on the financial capacity of the
appellant. It was open to the Tribunal to adopt the position
which it did. If the dearness allowance is linked with the
cost of living index the whole award will have to be
reopened and the entire basis on which it has been made will
have to be reconsidered. The award is a composite document
in which the several elements of increased wage scales,
larger increments longer span of 20 years for earning
increments, dearness allowance at 10% of the basic wage,
besides several other benefits, have been integrated into a
balanced arrangement in keeping with what the Tribunal has
found to be the financial capacity of the appellant. It is
not possible to maintain one part of the award and supersede
another. [179 E-F]
The Hindustan Times Ltd, New Delhi v. Their Workmen,
[1964] 1 SCR 234, 247 and Bengal Chemical & Pharmaceutical
Works Limited v. its Workmen, [1969] 2 SCR 113,
distinguished.
(3) The jurisdiction given to the Tribunal by rule 31
of the Industrial Disputes (Bombay) Rules, 1957, 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. [175 A-C]
Per contra
The order of 22nd December, 1978 is invalid so far as
it amends paragraph 23 of the original award. The amendment
has resulted in the Tribunal making, as it were, a
supplementary award, whereby a further relief is being
granted beyond that granted in the original award. The
original award was completed and signed by the Tribunal, and
it cannot be reopened now except for the limited purpose of
Rule 31. In travelling outside and beyond the terms of the
original award, the Tribunal has committed a jurisdictional
error. The evidence contained in the award throughout
provides incontrovertible proof that this flat increase (ad-
hoc) was never originally intended in the award. There was
only one increase contemplated in the award, in paragraph 23
of the award and it is more than plain that the increase was
the one incorporated in the revised pay scales pertaining to
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different categories. No second flat increase was envisaged
at all. The amendment made by the Tribunal has the effect of
providing a second increase, this time to each individual
workmen. If, as the Tribunal has stated in the amendment
order. the increase in paragraph 23 was intended to apply to
each individual workmen, there is nothing in the body of the
award to form the foundation on which the actual figures in
the restructured pay scales can be made to rest. There will
be no explanation why the initial start of the revised pay
scales has been increased by Rs. 150/- in the case of the
category of Draughtsmen and Rs. 100/- in the case of other
categories. Considering the fitment of the workmen in the
revised scales, it was stated in the award that workman
found drawing a salary less than the beginning of the grade
would be stepped up to the beginning of the grade and if his
pay fell between two steps in the reclassified pay scales
the
168
basic pay was to be fixed at the step higher in the revised
scale. Further the award was made on the basis that the
overall financial load according to paragraph 33 of the
award would be to the tune of about Rs. 5 lakhs. It was that
figure which the Tribunal had in mind against the backdrop
of the gross annual figures when it made the revised pay
scales retrospective from 1st January, 1976. [176 D-G, 177A,
178 D-F]
The statement, Exhibit C-51 afforded an indication
merely of what the additional financial load would be if a
flat increase was given to the individual workmen on the
alternative basis set forth therein. None of the
alternatives actually adopted by the Tribunal, because when
the award was made the Tribunal proceeded instead to
restructure the wage scales by the addition of Rs. 150/- in
the case of the category of Draughtsmen and of Rs. 100/- in
the case of other categories to the initial pay in the wage
scales pertaining to these categories. The addition was
integrated as a feature of the wage scales, it was not
regarded as an addition to the pay of each individual
workmen. [178A-C]
It is an accepted principle that consent by a party
cannot confer jurisdiction on a court. What is without
jurisdiction will remain so. [178 E-F]
Per O. C. Reddy, J. (Majority view, Iyer and Reddy, JJ.)
The order dated December 22, 1978 of the Industrial
Tribunal which purports to correct the award dated December
20, 1978 cannot be considered in effect to be a fresh award
and it is in order. The omission of the words "to each
employee" after the figure Rs. 150/- and again after the
figure Rs. 100/-was clearly an accidental slip or omission
which the Tribunal was entitled to correct. The application
for the correction was made immediately, that is to say, two
days after the Award, while iron was still hot or when
everything must have been fresh to the minds of the
Tribunal. Even the endorsement made on the application by
the Advocate for the Company to the effect "submitted to
whatever this honourable Tribunal desires to do, does not
indicate that the Company had any objection to the award
being corrected as sought by the employees union. On the
other hand the endorsement reads as if there was tacit
agreement on the part of the Company to the correction
sought by the union; it cannot possibly be doubted that an
Industrial Tribunal deciding upon the wage scales of the
employees of an establishment would have full liberty to
propose ad-hoc increase of salaries as part of the revision
of pay scales, not can it be doubted that fitment into the
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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. If without any flat or ad-hoc increase of salary the
workmen were to be fitted into revised scales of pay, it
would, obviously, result in serious anomalous situations. In
the case of several senior employees, the revised scale
would yield but a very small and almost a token increase in
the size of the pay packet whereas the junior employees
would get a large benefit. While workmen raising industrial
disputes for revision of wage scales are certainly minded
about their future prospects in the matter of wages, they,
surely would be more concerned with the immediate benefit
accruing to them. That was why the Industrial Tribunal
thought that all round flat increase of Rs. 150/- in the
case of Draughtsmen and Rs. 100/ in the case of other
workmen-to each employee-was called for. [180C, 181D-E, G-H,
182A, 183D-E, G-H, 184A-B]
169
(4) While it is true that 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 Article 136 is committed if some other method is
adopted. In the instant case, the Tribunal has given
satisfactory reasons for adopting a different mode. [184 F-
G]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 2299
and 2300 of 1979.
Appeal by Special Leave from the Award dated 20-12-1978
of the Industrial Tribunal Maharashtra in Reference (IT) No.
292 of 1975, published in Maharashtra Government Gazette
dated 15th February, 1979.
G. B. Pai, Manick K. Gagrat, J. B. Dadachanji, O. C.
Mathur and K. J. John for the Appellants in CA No. 2299 and
Respondents in CA 2300/79.
V. M. Tarkunde, P. H. Parekh, S. R. Deshpande and Miss
Manik Tarkunde for the Respondents in CA 2299 and Appellants
in CA No. 2300/79.
The following Judgements were delivered:
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.
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 s. 10(1)
(d), Industrial Tribunal, Maharashtra for adjudication. The
Reference was numbered I. T. No. 292 of 1975.
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170
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 appellant’s business in jeopardy and
to various other factors, peculiar to an engineering
consultancy business, beyond the appellant’s control. There
was fierce competition also, it was asserted, from other
similar organisations.
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. Nothing 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 an additional
burden.
171
in this connection, it proceeded on the footing that the
appellant was a separate and independent division of Tata
Sons Limited and had no "functional integrality" with the
other divisions. Having regard to the net profits earned by
the appellant from 1968 to 1977 it found that the acceptance
of the demands of the Union would result in an increased
burden of Rs. 7 crores, a burden which would dry up the
appellant’s resources and would be impossible for it to
bear. The Union modified its demands but even the modified
terms, according to the Tribunal, appeared to be on the high
side inasmuch as the resulting total burden of Rs. 1.70
crores was much higher than the average profits could
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sustain. The particular character of the appellant, that it
was a service industry and not a manufacturing concern, was
taken into account and it was observed that unlike a
manufacturing business there was little scope for
diversification in the case of an engineering consultancy.
Nonetheless, the Tribunal observed, there was every reason
to expect that the appellant would be able to earn sound
profits in the future, and the instability in its business
activities occasioned by the turbulent political situation
in Iran, would be, it was expected, compensated by contracts
secured in different developing countries. For the purpose
of determining the financial capacity of the appellant, the
Tribunal followed Unichem Laboratories v. Their Workmen(1)
where it was held that the gross profits should be computed
without making deductions on account of taxation,
development rebate and depreciation. It decided also that
there was no ground for deducting the notional value of
gratuity. Revising the figures on that basis, it computed
the annual gross profits for the years 1968 to 1977 and
determined the annual average at Rs. 26.69 lakhs.
The Tribunal took note of the elaborate scales of wages
already existing in the wage structure of the appellant and
decided "to modify the existing structure of the scales with
flat increases in each category." It also observed that the
category of Draughtsmen needed a special increase. But it
rejected the demand of the Union for dearness allowance on
the basis of a slab system, because that would have imposed
an unacceptable burden on the appellant’s financial capacity
and there was no reason why the existing scheme of dearness
allowance should be disturbed when a substantial increase
was being made in the level of the basic wage. Taking into
account the circumstance that besides the staff of 306
workmen represented by the Union there were several other
employees who would also have to be paid, the Tribunal
considered it fair, in paragraph 23 of the award, to give a
flat increase of Rs. 150/- in the category of Draughtsmen
and Rs. 100/- in the case of other categories. It rejected
the demand of the Union
172
for abolishing the Efficiency Bar, but the span of 15 years
for earning increment was expanded in some grades to 20
years and some adjustments were also made in specific
grades. The Tribunal also noted that after the salaries of
the employees had been fixed in the respective scales,
senior employees would have to be given some more increments
in the new scales according to their completed years of
service. Taking all these factors into consideration, it
made an award dated 20th December, 1978 prescribing the
following revision in the existing scales of wages:
------------------------------------------------------------
Grade & Category Existing Grade/ Revised Grade/
Scale Scale
------------------------------------------------------------
I Peon/Helper/ Rs. 250-10-300-EB- Rs. 350-10-450-15-
Sweeper 10-400. 600.
II Driver/Asstt. Rs. 300-10-420-EB- Rs. 400-15-520-20-
House-keeper/ 15-540. 660-EB-25-785.
Caretaker.
III Jr. Clerk-cum- Rs. 350-15-425-EB- Rs. 450-20-550-25-
Typist/Jr. Steno 20-625-EB-25-725. 800-EB-30-950.
Tel. Optr./Recep-
tionist/Assist.
Record Keeper/
Veh. Mechanic/
Jr. Librarian.
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IV Sr. Clerk/Steno/ Rs. 450-20-530-EB- Rs. 550-25-675-30-
Record Keeper/ 30-860-EB-35-1000. 975-EB-40-1175.
Tlx. Operator/
Xerox Operator
V Office Asstt./ Rs. 590-30-740-EB- Rs. 690-35-865-40-
Lib. Asstt./ 35-1020-EB-40-1300 1265-EB-45-1490.
Cost. Assist./
Administrative
Assist./Personnel
Asstt./Comm. Asstt./
Canteen Asstt.
VI Draughtsman/Site Rs. 380-30-620-40- Rs. 530-40-730-50-
Supervisor/ 1020-EB-50-1320. 1230-EB-60-1530.
Surveyor/(Diploma
Holder).
VII Junior Architect Rs. 760-40-1000-50- Rs. 860-50-1160-
(Engineering 1300. -60-1700.
Graduate)
VIII Sr. Draughtsman Rs. 1000-50-1300- Rs. 1100-60-1340-
(Diploma Holder) 60-1600-75-1750. 70-1690-80-2010.
The Tribunal maintained the existing schemes of
dearness allowance and house rent allowance, and observed
that in view of the revised basic wages there would be a
resultant increase in the dearness allowance and house rent
allowance.
The revised wage scales, the Tribunal directed, should
take effect retrospectively from 1st January, 1976. It also
laid down the principle enabling the actual fitment of the
workmen in their respective wage scales as on that date and
also provided for the number of increments to which they
would be entitled having regard to the period of completed
service.
173
Two days after the award was made, an application was
made by the Union stating:
"In the said award, your Honour has observed, at
the end of para 22, "In view of the increase that is
being allowed in the basic pay, I do not propose to
revise the existing scheme of Dearness Allowance."
Further, it appears that the Tribunal intended to grant
the increase of Rs. 150/- to each draughtsman and Rs.
100/- to all other workmen in their basic pay. However,
this is not clearly mentioned anywhere in the award due
to accidental slip or omission."
The Union prayed that the position may be clarified and the
award corrected accordingly. On the same date, the Tribunal
disposed of the application by the following order:
"There can be no doubt that a flat increase of Rs.
150/- to each of the employees in the category of
Draftsmen and of Rs. 100/- to each employee in the
other categories has been granted under my award. The
same has been made clear in paragraph No. 23, but it
appears that the words "to each employee" after the
figure "Rs. 150/-" were omitted. Similarly, the same
words "to each employee" after the figure "100" were
omitted. When the award is sent for publication, a
necessary corrigendum be made in the award and the
aforesaid words after the figures Rs. 150/- and Rs.
100/- be added. It may be mentioned that only from that
point of view viz. to grant flat increase of Rs. 150/-
and of Rs. 100/- to the employees in the category of
Draftsmen and the other categories respectively that a
burden statement was called for from the company and
the same was submitted (vide Ex. C-51). The fitment has
also to be done only after the flat increase is added
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to the present basic salary of each employee. I do not
think that any problem would arise for interpretation
of the award. Since the award has been already signed,
I do not think anything further can be added to this
award.
sd/- K. N. Wani
INDUSTRIAL TRIBUNAL."
In this appeal, the learned counsel for the appellant
had covered a wide field, but in the end he states that the
appellant is aggrieved by two matters only. One is the
retrospectivity attached to the revised wage scales, and the
other is the flat increase given to each
174
employee of Rs. 150/- in the category of Draughtsmen and Rs.
100/- in other categories resulting from the order dated
22nd December, 1978.
The workmen have filed an appeal by special leave,
Civil Appeal No. 2300 of 1979, in which they have challenged
the rejection by the Tribunal of their claim in respect of
dearness allowance which, they contend, should be pegged to
the cost of living index and should not be a fixed amount.
Considering the appeal of Tata Consulting Engineers
first, the contention of learned counsel for the appellant
is that having regard to the financial capacity of the
appellant the Tribunal erred in making the wage scales
retrospective and, in any event, in ranging the
retrospectivity back to 1st January, 1976. We have been
taken through some of the material on the record in the
attempt to support the contention, but after giving careful
thought to the matter, I think there is ample justification
for what the Tribunal did. It must be remembered that
although the wage scales were introduced as long ago as 1973
they were maintained at that level except for a slight
revision some time thereafter. No dearness allowance was
paid until the beginning of 1977 and the house rent
allowance also was introduced about that time. The cost of
living had gone on increasing from 1972 onwards and, as the
Tribunal has found, the dearness allowance and house rent
allowance made no appreciable impact in neutralising the
increasing cost. During all these years, the appellant had
continued to enjoy increasing profits; nonetheless the
emoluments received by the workmen did not receive the
impress of the appellant’s growing prosperity. The Charter
of Demands was presented by the Union in July, 1974 and when
conciliation proceedings failed the State Government made
the reference to the Industrial Tribunal in 1975. The
Tribunal has referred to various considerations which
prevailed with it in giving retrospectivity to the revised
pay scales. They are considerations which cannot be ignored.
Accordingly, the contention raised on behalf of the
appellant against retrospectivity of the wage scales must be
rejected.
The challenge embodied in the second contention against
the amendment of the award is more serious. It is urged that
the amendment results in the inclusion of a flat increase of
Rs. 150/- to each workman in the case of Draughtsman and Rs.
100/- to each workman in the case of other categories, a
result wholly unwarranted, it is said, by the intent of the
original award and, therefore, falling beyond the
jurisdiction of the Tribunal. In making the application of
22nd December, 1978, the Union invoked the jurisdiction of
the
175
Tribunal under rule 31 of the Industrial Disputes (Bombay)
Rules, 1957. Rule 31 provides:
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"31. The Labour Court, Tribunal or Arbitrator may
correct any clerical mistake or error arising from an
accidental slip or omission in any award it or he
issues."
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.
Is the instant case one where the amendment made by the
Tribunal in the original award can be said to correct a mere
clerical mistake or error arising from an accidental slip or
omission? To answer the question, it is necessary to examine
the basis of the award and the intent which flows from that
basis. The terms of reference in the State Government’s
order required the Tribunal to revise the scales of pay and
dearness allowance, and there was no mention of giving any
ad hoc increase in the basic pay of individual workman. It
would do well to recall that the claim of the Union filed
before the Tribunal also centered on the need to revise the
wage scales. That was the main issue between the parties. It
is to the task of revising the pay scales that the Tribunal
addressed itself, and throughout the material part of the
award it is that task which held its focussed attention. The
financial capacity of the appellant, and the related study
of its annual profits from 1968 to 1977, were examined from
that view point. The sufficiency of the existing pay scales
was considered in detail, and regard was had to their
original structure and the accretions made subsequently by
way of dearness allowance and house rent allowance. For the
purpose of restructuring the pay scales the Tribunal ruled
on the paying capacity of the appellant, both with reference
to the profits of the preceding year as well as the
prospects of the future. The financial capacity, as the
Tribunal observed, constituted one of "the principles which
are required to be followed in the fixation of the wage
structure." A clear statement of its intention is found in
paragraph 22 of the award, where the Tribunal stated:
"I only propose to modify the existing structures
of the scales with flat increases in each category."
176
No ad hoc increase to the pay of each individual workman was
intended. And that is confirmed by what was stated in
paragraph 23 of the award:
"Considering this outgoing the flat increase of
Rs. 150/- in the category of Draughtsman and Rs. 100/-
in the case of the other categories would be fair."
It will be noted that the pay scales of different categories
were being restructured, and the flat increase envisaged
there related to an increase in the general pay scales of
different categories. Individual workmen were not present to
the mind of the Tribunal. That the increase was pertinent to
the general pay scales in the revised wage structure is
patently clear from a comparison of the existing pay scales
and the revised pay scales. The comparative table of
existing pay scales and the revised pay scales has been
reproduced earlier. The revised pay scales of all
categories, except the category of Draughtsmen, shows an
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increase of Rs. 100/- in the initial pay fixed in each
scale, the increase in the case of the category of
Draughtsmen being Rs. 150/-. There was only one increase
contemplated in the award, in paragraph 23 of award, and it
is more than plain that the increase was the one
incorporated in the revised pay scales pertaining to
different categories. No second flat increase was envisaged
at all. The amendment made by the Tribunal has the effect of
providing a second increase, this time to each individual
workmen. If, as the Tribunal has stated in the amendment
order, the increase in paragraph 23 was intended to apply to
each individual workmen, there is nothing in the body of the
award to form the foundation on which the actual figures in
the restructured pay scales can be made to rest. There will
be no explanation why the initial start of the revised pay
scales has been increased by Rs. 150/- in the case of the
category of Draughtsmen and Rs. 100/- in the case of other
categories. Considering the fitment of the workman in the
revised scales, it was stated in the award that a workman
found drawing a salary less than the beginning of the grade
would be stepped up to the beginning of the grade and if his
pay fell between two steps in the reclassified pay scales
the basic pay was to be fixed at the step higher in the
revised scale. Conspicuous by its absence is any reference
to a flat increase in the pay of an individual workmen. Even
when considering the range of permissible retrospectivity
the Tribunal stated in the award:
"In view of the revision of the wage scales, there
would be consequent increase in the dearness allowance
and the house rent allowance."
177
And the clinching circumstances of all is that the award was
made on the basis that the overall financial load according
to paragraph 33 of the award would be to the tune of about
Rs. 5 lakhs. It was that figure which the Tribunal had in
mind against the backdrop of the gross annual figures when
it made the revised pay scales retrospective from 1st
January, 1976. This liability taken with the liability
accruing on the need to increase the salaries of the other
staff determined the Tribunal’s deliberations in regard to
the several features of the award, including the grant of
increments related to completed periods of service, the
expansion of the span from 15 years to 20 years for earning
increments, and other benefits. It cannot be the case of the
Union that the figure of Rs. 5 lakhs mentioned in paragraph
33 of the award represented the result of adding a flat
increase to the pay of each workman in addition to the
benefits conferred by the revised pay scales and other
awarded reliefs.
In its order of 22nd December, 1978, the Tribunal has
referred to the statement (Exhibit C-51) filed by the
appellant when called upon to indicate the increased
financial burden apprehended by it. The Tribunal has relied
on this statement as evidence showing that the appellant
knew that a flat increase of Rs. 150/- and Rs. 100/-was
intended to each of the employees in the category of
Draughtsmen and the other categories. In so construing the
statement, Exhibit C-51, the Tribunal has grievously erred.
It seems from a perusal of the document, Exhibit C-51, that
it is a statement giving trial figures of the increased
financial load on different bases. On the basis that a sum
of Rs. 150/- per month was added to the pay of each
Draughtsman and a sum of Rs. 100/- was added to the pay of
every other workman, who belonged to the Union staff, the
financial load would increase to Rs. 9,22,032/-. Likewise,
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if a flat increase of Rs. 100/- was given to individual
workmen of all categories, including Draughtsmen, the
increased financial load would total Rs. 7,64,256/-. The
statement then goes on to indicate that if a flat increase
of Rs. 75/-per month were given to individual workmen of all
categories the total increase would be Rs. 5,78,220/-.
Again, if the flat increase is Rs. 65/- per month to the
individual workmen of all categories, the additional load
would total Rs. 4,97,772/-. Finally, on the basis that the
individual Draughtsman would be given an increase of Rs.
75/- per month and the individual workmen of other
categories Rs. 50/- per month, the additional load was
calculated at Rs. 4,63,092/-. It will be noted that the
statement, Exhibit C-51, was prepared on the basis of the
employees’ strength as in December, 1971. A similar
statement was prepared on the basis of the employees’
strength as in September, 1978. These statements cannot be
regarded as evidence
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that the appellant was cognizant of the intention of the
Tribunal to provide a flat increase to the pay of each
workman. The statement afforded an indication merely of what
the additional financial load would be if a flat increase
was given to the individual workman on the alternative basis
set forth therein. None of the alternatives was actually
adopted by the Tribunal, because when the award was made the
Tribunal proceeded instead to restructure the wage scales by
the addition of Rs. 150/- in the case of the category of
Draughtsmen and Rs. 100/- in the case of other categories to
the initial pay in the wage scales pertaining to those
categories. The addition was integrated as a feature of the
wage scales; it was not regarded as an addition to the pay
of each individual workman.
It seems that the Tribunal was betrayed by a curious
confusion in accepting the plea of the Union that a flat
increase to the pay of each workman was intended in the
original wage and, consequently, it fell into the error of
amending the award. The evidence contained in the award
throughout provides incontrovertible proof that this flat
increase was never originally intended in the award. The
amendment has resulted in the Tribunal making, as it were, a
supplementary award, whereby a further relief is being
granted beyond that granted in the original award. The
original award was completed and signed by the Tribunal, and
it cannot be reopened now except for the limited purpose of
Rule 31. In travelling outside and beyond the terms of the
original award, the Tribunal has committed a jurisdictional
error. Our attention has been drawn to what purports to be
an endorsement by counsel for the appellant on the
application dated 22nd December, 1978 filed by the Union
before the Tribunal to the effect that the appellant would
submit to whatever the Tribunal decided, and it is urged
that the appellant is bound by the order made on the
application. It is an accepted principle that consent by a
party cannot confer jurisdiction on a court. What is without
jurisdiction will remain so. In the circumstances the order
of 22nd December, 1978 is invalid so far as it amends
paragraph 23 of the original award. The corrigendum amending
the award in consequence is liable to be quashed. The second
contention of the appellant is entitled to succeed.
I shall now consider Civil Appeal No. 2300 of 1979
filed by the workmen. The only contention of the workmen is
that the Tribunal should have fixed the dearness allowance
in communion with the cost of living index. It is wrong in
principle, it is said, to provide a fixed dearness
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allowance. Reliance was placed on The Hindustan Times Ltd.,
New Delhi v. Their Workmen where it was observed by this
Court that dearness allowance should not
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remain fixed at any figure but should be on a sliding scale
in order to neutralise a portion of the increase in the cost
of living. Reference was also made to Bengal Chemical &
Pharmaceutical Works Limited v. Its Workmen. Now, it is not
a universal rule that the dearness allowance should in all
cases be correlated with the cost of living index. The
Tribunal, in the present case, considered the matter and
found it sufficient and in accord with justice that the wage
scales should be restructured with suitable increments
provided therein. It noted that dearness allowance was being
granted by the appellant at 10% of the salary subject to a
minimum of Rs. 50/- and house rent allowance at 30% of the
basic salary. Having regard to the not inconsiderable
improvement in the level of the basic wage, it observed that
there would be a consequent increase in the dearness
allowance and house rent allowance. In view of the increase
so secured, the Tribunal rejected the suggestion that a slab
system should be introduced in the dearness allowance or
that there should be any other modification of the principle
on which dearness allowance was being presently granted. It
declared that the cumulative effect of an improved wage
structure together with dearness allowance operating on a
slab system would throw an impossible burden of about Rs. 1
crore on the financial capacity of the appellant. It was
open to the Tribunal to adopt the position which it did. If
the dearness allowance is linked with the cost of living
index the whole award will have to be reopened and the
entire basis on which it has been made will have to be
reconsidered. The award is a composite document in which the
several elements of increased wage scales, larger
increments, longer span of 20 years for earning increments,
dearness allowance at 10% of the basic wage, besides several
other benefits, have been integrated into a balanced
arrangement in keeping with what the Tribunal has found to
be the financial capacity of the appellant. It is not
possible to maintain one part of the award and supersede
another.
Accordingly, the appeal filed by the workmen must fail.
In the result, Civil Appeal No. 2299 of 1979 is allowed
in part insofar that the order dated 22nd December, 1978 of
the Industrial Tribunal, Maharashtra Bombay is quashed to
the extent that it modifies the original award dated 20th
December, 1978, and the corrigendum made consequent thereto
is also quashed. Civil Appeal No. 2300 of 1979 is dismissed.
There is no order as to costs.
CHINNAPPA REDDY, J. We have had the advantage of
perusing the judgment prepared by our learned brother
Pathak, J. we agree with
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him that Civil Appeal No. 2300 of 1979 should be dismissed.
We also agree with him that Civil Appeal No. 2299 of 1979
should also be dismissed in so far as it relates to the
award dated December 20, 1978. However, we do not agree with
our learned brother that Civil Appeal No. 2299 of 1979
should be allowed in so far as it relates to the order dated
December 22, 1978 of the Industrial Tribunal which purports
to correct the award dated December 20, 1978. In our opinion
Civil Appeal No. 2299 of 1979 should be dismissed in its
entirety.
We do not propose to give our reasons to the extent we
are in agreement with Pathak, J. and we propose to state our
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reasons for the disagreement only.
It is needless to recapitulate all the basic facts
which have been set out in the judgment of Pathak, J. The
Award of the Industrial Tribunal was made on December 20,
1978. On December 22, 1978 that is to say, two days after
the Award was made and when everything must have been fresh
to the minds of the Tribunal, the respective parties and
their Advocates, the employees Union made an application
under Rule 31 of the Industrial Disputes (Bombay) Rules,
1957 seeking a correction of an error, which it was claimed,
had crept into the Award. The application was as follows:
"In the above reference your honour was pleased to
pass an award on 20th December, 1978.
In the said award, Your Honour has observed, at
the end of Para 22, ’In view of the increase that is
being allowed in the basic pay, I do not propose to
revise the existing scheme of Dearness Allowance’.
Further, it appears that the Tribunal intended to grant
the increase of Rs. 150/- to each draughtsman and Rs.
100/- to all other workmen in their basic pay. However,
this is not clearly mentioned anywhere in the award due
to accidental slip or omission.
The Union therefore prays the honourable Tribunal
to clarify the position and correct the award
accordingly".
On this application, the Advocate for the employer company
made the following endorsement:
"Submitted to whatever this Hon’ble Tribunal
desires to do".
Thereafter the Tribunal made an order on the same day in the
following terms:
"There can be no doubt that a flat increase of Rs.
150/- to each of the employees in the category of
Draftsmen and
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of Rs. 100/- to each employee in the other categories
has been granted under my award. The same has been made
clear in paragraph No. 23, but it appears that the
words "to each employee" after the figure "Rs. 150/-"
were omitted. Similarly, the same words "to each
employee" after the figure "100" were omitted. When the
award is sent for publication, a necessary corrigendum
be made in the award and the aforesaid words after the
figures Rs. 150/- and Rs. 100/- be added. It may be
mentioned that only from that point of view viz. to
grant flat increase of Rs. 150/- and of Rs. 100/- to
the employees in the category of Draftsmen and the
other categories respectively that a burden statement
was called for from the company and the same was
submitted (vide Ex. C-51). The fitment has also to be
done only after the flat increase is added to the
present basic salary of each employee. I do not think
that any problem would arise for interpretation of the
award. Since the award has been already signed, I do
not think anything further can be added to this award".
This order was made in the presence of Shri Manak Gagrat,
Advocate for the Company and Shri N. P. Mehta, Advocate for
the workmen. The endorsement made on the application by the
Advocate for the company does not indicate that the company
had any objection to the award being corrected as sought by
the employees union. On the other hand the endorsement reads
as if there was tacit agreement on the part of the Company
to the correction sought by the union. The order dated
December 22, 1978 of the Tribunal also does not reveal that
there was any opposition by the company to the application
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for correcting the award. Even so we propose to examine
whether the correction sought by the employees union was
within the bounds of the authority of the Tribunal or
whether it was in effect a fresh award.
The primary and basic question considered by the
Industrial Tribunal, in making the award dated December 20,
1978 was the question of revision of the wage-scales.
Implicit and intrinsically connected with the question of
revision of the wage-scales were the questions of fitment of
employees into the wage-scales and flat or ad-hoc increase
of salaries of workmen wherever considered necessary. It
cannot possibly be doubted that an Industrial Tribunal
deciding upon the wage-scales of the employees of an
establishment would have full liberty to propose ad-hoc
increase of salaries as part of the revision of wages. Nor
can it be doubted that fitment into the revised pay scales
is certainly a part of the revision of pay scales. This in
our opinion is
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elementary and fundamental to the jurisdiction of the
Industrial Tribunal in revising wage-scales.
In the present case the Industrial Tribunal on a
consideration of the material placed before it came to the
conclusion that the company was in an undoubted position to
bear the additional financial burden. At the end of
paragraph 15 of the Award, the Tribunal stated: "But there
can be no doubt that the company can very well bear the
additional burden. The question is what should be the extent
of such burden?" At the end of paragraph 18 of the award
the Tribunal said: A" mere reading of Exhibit U-15 will
immediately dispel the misgivings about the future of the
present company. For some years to come this is likely to be
one of the few Consulting Engineers who will be securing
major contracts". Again in Paragraph 19 it was said: "I have
no doubt that the present Company would be able to bear the
additional burden for the years to come. This is further
borne out from the trading results of the Company for the
year 1968-69 to 1977. The profits have increased all along.
The copy of the letter dated July 23, 1973, alongwith the
Annexures from the Company to the Director General, Posts &
Telegraphs, Delhi (Ex. C-27) indicates the important
projects the Company was handling in India and abroad, and
the amount of foreign exchange earned and repatriated. I
will; therefore, proceed on the ground that the present
Company can bear the additional financial burden". Finally
at the end of paragraph 21 the Tribunal said : In view of
this position, the Company can easily bear some burden that
might fall as a result of the upward revision of the wage-
scales. The question is to what extent the relief should be
given to the employees ?"
After expressing himself in categoric terms about the
capacity of the company to bear the additional financial
burden, the Tribunal went on to say: "I only propose to
modify the existing structure of the scales with flat
increases in each category". The Tribunal then considered
the question whether Draftsmen should get a higher flat
increase and the question whether the existing scheme of
Dearness Allowance should be revised. The Tribunal then
observed: "...... the flat increase of Rs. 150/- in the
category of Draftsmen and Rs. 100/- in the case of the other
categories would be fair". Thereafter various other matters
were considered and finally the Tribunal revised the wage
scales in the manner already mentioned by my brother Pathak,
J. The question of "Fitment" was then considered in the
following manner:
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"34. Fitment:-
If as on 1st January, 1976, an employee is drawing
a salary less than the beginning of the respective
grade, he should be first stepped up to the beginning
of the grade. If the pay of an employee does not
coincide with any step in the revised pay scale, and
falls between two steps in the reclassified pay scales,
the basic pay of that employee shall be fixed at the
step higher in the revised scale.
35. After fixing the salary of the employees in
the scales as above, the employees should be given
increments in the new scales as noted below:-
(i) Employees who have completed 5 years or more
as on 1st January, 1976, 3 increments.
(ii) Employees who have completed 4 years of
service as on 1st January, 1976, 2
increments.
(iii) All other employees with more than one year’s
service shall be given one increment".
Now, if, without any flat or ad hoc increase of salary, the
workmen were to be fitted into the revised scales of pay, it
would obviously result in serious anomalous situations. In
the case of several senior employees, the revised scale
would yield but a very small and almost a token increase in
the size of the pay packet whereas the junior employees
would get a large benefit. While workmen raising
industrial disputes for revision of wage-scales are
certainly minded about their future prospects in the matter
of wages, they, surely would be more concerned with the
immediate benefits according to them That was why the
Industrial Tribunal thought that an all round flat increase
of Rs. 150/- in the case of Draftsmen and Rs. 100/- in the
case of other workmen was called for. It was clearly so
intended by the Tribunal as is evident from the reference to
"flat increase of Rs. 150/- in the category of Draftsmen and
Rs. 100/- in the case of the other categories". Since there
was to be a flat increase of Rs. 150/- and Rs. 100/- in the
case of draftsmen and other workmen respectively, the
revised wage scale had necessarily to commence with figures
Rs. 150/- and Rs. 100/- above the existing wage scales.
Immediately after the award was pronounced, while the iron
was still hot as it were, the employees apparently realised
that the employer might take advantage of the circumstance
that it was not clearly mentioned in the award that all the
employees were to get additional pay of Rs. 150/- and Rs.
100/- respectively and might contend that the Tribunal had
only revised the wage scales by increasing the salary on
entry into the service and res-
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tructuring the scale of pay and never granted any ad hoc
increase of salary to all employees. Therefore, they filed
an application before the Tribunal for correcting the award
so as to bring out what was intended. As it has now turned
out what the employees apparently suspected the employer
might contend, is precisely what the employer is not
contending, though the employer did not choose to so contend
before the Industrial Tribunal itself when the employees
filed the application for rectification. The application
before the Tribunal was filed under Rule 31 of the Bombay
Industrial Disputes Rules 1957, which is as follows:
"A Board, Court, Labour Court, Tribunal or
Arbitrator may, at any time, suo moto or on an
application made by any of the parties concerned, may
correct any clerical mistake or error arising from an
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accidental slip or omission in any proceedings, report,
award or as the case may be, decision".
The omission of the words to each employee first after
the figure Rs. 150/- and again after the figure Rs. 100/-
was clearly an accidental slip or omission which the
Tribunal was entitled to correct. We are unable to see how
it can be held to be otherwise. We are not impressed with
the submission of the learned counsel for the Company that
the corrigendum was in effect a fresh award. We, therefore,
see no ground for quashing the order dated December 22, 1978
of the Tribunal. The result of the foregoing discussion is
that Civil Appeal No. 2299 of 1979 has to be dismissed in
its entirety.
We have already indicated that we agree with our
brother Pathak, J., that the appeal (Civil Appeal No. 2300
of 1979) filed by the workmen should also be dismissed.
While we find lot of force in the submission of Shri V. M.
Tarkunde, learned counsel for the workmen that 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 Article 136 is committed if
some other method is adopted. The Tribunal has given
satisfactory reason for adopting a different mode and we are
not disposed to interfere with the award of the Tribunal. In
the result both the appeals are dismissed without any order
as to costs.
ORDER
In view of the opinion of the majority both the appeals
are dismissed and there is no order as to costs.
S.R. Appeals dismissed.
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