Workmen Of M/S Hotel Sofitel S vs M/S Hotel Sofitel Surya & Anr.
- Court
- Delhi High Court
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 15.05.2026
Date of decision: 03.09.2026
Uploaded on: 03.09.2026
# CNR No: DLHC010217722003
+ W.P.(C) 200/2003
WORKMEN OF M/S HOTEL SOFITEL S .....Petitioner
Through: Mr. Shankar Raju & Mr. Nilansh
Gaur, Advs.
versus
M/S HOTEL SOFITEL SURYA & ANR. .....Respondents
Through: Mr. Ravi Kant Chadha, Sr. Adv., Mrs.
Mansi Chadha & Ms. Misika
Chaudhary, Advs.
# CNR No: DLHC010236972003
+ W.P.(C) 3734/2003 & CM APPL. 12875/2017
HOTEL CROWNE PLAZA SURYA .....Petitioner
Through: Mr. Ravi Kant Chadha, Sr. Adv., Mrs.
Mansi Chadha & Ms. Misika
Chaudhary, Advs.
versus
WORKMAN OF M/S HOTEL CROWN PLAZA
SURYA .....Respondent
Through: Mr. Shankar Raju & Mr. Nilansh
Gaur, Advs.
CORAM:
HON'BLE MS. JUSTICE SHAIL JAIN
JUDGMENT
SHAIL JAIN, J.
1. These two connected Writ Petitions, filed under Articles 226 and 227
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of the Constitution of India, namely, W.P.(C) No. 200/2003, Workmen of
M/s Hotel Sofitel Surya v. M/s Hotel Sofitel Surya & Anr. , and W.P.(C) No.
3734/2003, M/s Hotel Sofitel Surya v. Workmen of M/s Hotel Sofitel Surya
& Anr. , arise out of the common Award dated 01.08.2002 passed by the
learned Presiding Officer, Industrial Tribunal-III, Delhi (hereinafter, “the
Tribunal”) in Industrial Dispute No. 8/1993. Since both petitions arise from
the same industrial dispute, proceed on the same evidentiary record and
assail the said Award from the respective standpoints of the workmen and
the Management, they have been heard together and are being disposed of
by this common judgment.
FACTUAL MATRIX
2. The petitioner/workmen in W.P.(C) No. 200/2003 are employed at
Hotel Sofitel Surya, New Friends Colony, New Delhi, a Five-Star hotel
establishment operating in the National Capital Territory of Delhi. The
establishment has, at different points in time, also been referred to as Best
Western Surya and Crowne Plaza Surya. The workmen are represented by
the Hotel Mazdoor Union (Regd.), a registered trade union representing
employees in the hotel industry in Delhi.
3. On 19.02.1992, the Union intimated the Management that the
workmen of the establishment had become members of the Union.
Thereafter, on 26.03.1992, the Union served upon the Management a
Charter of Demands seeking revision of pay scales and various allowances
and service benefits, including dearness allowance, house rent allowance,
city compensatory allowance, food allowance, enhancement of leave, night
duty allowance, conveyance allowance, uniforms and leave travel assistance.
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The claim was founded, inter alia, on the assertion that the workmen were
receiving wages and benefits substantially lower than those prevailing in
comparable Five-Star hotels in Delhi.
4. The dispute was taken up in conciliation proceedings before the
Labour Commissioner. Upon failure of conciliation, the appropriate
Government, by order dated 08.01.1993, referred the dispute for
adjudication to the Industrial Tribunal, which was registered as I.D. No.
8/1993. The reference required the Tribunal to determine whether the
workmen were entitled to revision of the pay scales, allowances and service
benefits specified therein and, if so, what directions were necessary in that
regard.
5. Before the Tribunal, the Union filed its Statement of Claim, while the
Management contested the reference. The principal objections of the
Management were that no subsisting industrial dispute survived, that the
Union had no locus to espouse the dispute, that the financial position of the
establishment did not permit the revision claimed, and that the hotel, having
regard to its location and other operational circumstances, could not
appropriately be compared with centrally situated Five-Star hotels. On the
pleadings, the Tribunal framed, inter alia, issues concerning the validity of
the espousal, the effect of any prior settlement, and the entitlement of the
workmen on the terms of the reference.
6. Evidence was thereafter led by both sides. The workmen examined
WW-1 to WW-5, while the Management examined MW-1 to MW-3. The
documentary evidence included, on behalf of the workmen, the Memoranda
of Settlement dated 24.01.1990 and 08.09.1993 entered into between the
Hotel Mazdoor Union and various hotel establishments in Delhi, including
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Hotel Claridges, Hotel Imperial, Hotel Vikram, Hotel Diplomat and Hotel
Alka. These documents were relied upon in support of the workmen's
contention that the wage and service conditions prevailing in comparable
establishments furnished an appropriate basis for adjudication of their
claim.WW-5, M.M. Gop, tendered his affidavit and proved Ex. WW-5/1 and
Ex. WW-5/2. In cross-examination, he accepted that Hotel Surya was not a
party to those settlements The Management, on the other hand, placed
reliance upon its audited balance sheets, financial statements, wage-revision
material and other documents bearing upon its financial position and the
benefits already extended to its workmen. The Financial Controller of the
Management also entered the witness-box and deposed with reference to the
audited financial statements of the establishment for various years.
7. By Award dated 01.08.2002, the learned Tribunal found the dispute to
have been validly espoused and proceeded to adjudicate the substantive
claims of the workmen. The Tribunal ultimately held the workmen entitled
to revision of wages and various allowances and facilities, and directed, inter
alia, payment of salary and allowances with reference to those prevailing in
the nearest Five-Star hotel in Delhi. The operative portion of the Award,
however, directed that the revised salary and allowances would be payable
with effect from 01.01.2003 . The workmen contend that, having found their
claims justified, the Tribunal ought to have granted the benefit from the date
of the Charter of Demands, i.e. 26.03.1992, or at least from the date of
reference, i.e. 08.01.1993. The record of the Award, as reproduced in the
proceedings, does not disclose any specific reasoning for the selection of
01.01.2003 as the effective date.
8. Aggrieved by the Award, the workmen instituted W.P.(C) No.
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200/2003, principally questioning the date from which the benefits awarded
by the Tribunal were directed to operate and seeking retrospective
implementation. The Management, in turn, instituted W.P.(C) No.
3734/2003 challenging the Award on merits, including the entitlement of the
workmen and the manner in which the Tribunal had directed implementation
with reference to the “nearest Five-Star hotel”. The Management also
approached the appropriate authority under Section 36A of the Industrial
Disputes Act, 1947, seeking clarification of the Award. On 28.05.2003, this
Court granted an ex parte ad-interim stay of the operation of the Award in
W.P.(C) No. 3734/2003. The said interim order has remained operative
during the pendency of the proceedings.
SUBMISSIONS ON BEHALF OF THE WORKMEN
9. Learned counsel appearing for the petitioner-workmen submitted that,
having upheld the workmen's claim for revision of pay scales and various
allowances and service benefits, the Tribunal ought to have made the relief
operative from the date of the Charter of Demands dated 26.03.1992 or, at
least, from the date of reference dated 08.01.1993, instead of 01.01.2003.
10. It was contended that the Tribunal assigned no reasons for selecting
01.01.2003 as the effective date, particularly when the dispute had remained
pending since 1992-93 and the Management had not sought prospective
operation of the relief. According to the workmen, there was no justification
for denying them the benefit of the revised wage structure for the
intervening period.
11. Learned counsel further submitted that the increases granted by the
Management from time to time did not constitute the revision sought under
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the Charter of Demands and that the workmen continued to receive inferior
wages and service conditions as compared with comparable Five-Star hotels.
Reliance was placed upon the settlements relating to comparable
establishments, including Hotel Ashok, New Delhi.
12. It was further submitted that the Management had the financial
capacity to bear the burden of wage revision. Reliance was placed upon its
Annual Reports to contend that the Management had witnessed substantial
growth in turnover and profits and that its financial position did not justify
denial of the wage revision claimed by the workmen.
13. Learned counsel accordingly prayed that the operative portion of the
Award be modified so as to make the revised pay scales and allowances
effective from 26.03.1992 or, in the alternative, 08.01.1993, with
consequential payment of arrears to the workmen.
SUBMISSIONS ON BEHALF OF THE MANAGEMENT
14. Learned counsel appearing for the Management submitted that the
Tribunal erred in granting a further revision of wages and service conditions
without first determining an appropriate comparator or establishing any
continuing disparity after taking into account the successive revisions
already granted by the Management. It was contended that the workmen had
accepted the revisions made in 1992, 1994 and 1995 and had failed to
establish that their existing wages and benefits remained inferior to those
prevailing in any properly comparable establishment.
15. It was further submitted that the settlements relied upon by the
workmen in respect of other hotels could not, by themselves, establish
entitlement at Sofitel Surya. The workmen had not placed before the
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Tribunal the corresponding particulars of wages, D.A., H.R.A. and other
benefits applicable to comparable categories in those establishments, nor
had the Tribunal identified any particular establishment as the appropriate
comparator.
16. Learned counsel further submitted that the Tribunal's conclusion
regarding financial capacity was based upon a selective consideration of the
evidence. The Management relied upon its audited financial statements and
the evidence regarding losses and other financial circumstances of the
establishment. It was contended that the Tribunal had not assessed the actual
additional burden which the relief granted by it would impose upon the
Management.
17. It was also submitted that the operative direction requiring payment
of salary and allowances as prevailing in the “nearest Five Star Hotel” was
incapable of precise implementation. The Award did not identify the
establishment intended, the categories of employees to be compared, or the
particular wage and service conditions to be adopted. Implementation would
consequently require a fresh adjudicatory exercise.
18. Learned counsel accordingly submitted that the substantive portion of
the Award was unsustainable and liable to be set aside.
ISSUE FOR CONSIDERATION
19. Having considered the pleadings, the evidence on record, the
impugned Award dated 01.08.2002 passed by the Industrial Tribunal in I.D.
No. 8/1993 and the rival submissions advanced by learned counsel for the
parties, the broad question that arises for consideration is whether the
impugned Award, including the Tribunal’s findings on espousal, the
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substantive entitlement to further revision of wages and conditions of
service, the relief granted and the effective dates prescribed therefor, calls
for interference in exercise of the supervisory jurisdiction of this Court.
ANALYSIS
20. The Court has heard the learned Counsel for the respective parties
and perused the record. Accordingly, this Court proceeds to determine the
issues arising for consideration on the basis of the material available on
record, the submissions advanced on behalf of the parties, the precedents
relied upon, and the settled principles of law laid down in a catena of
decisions of the High Courts and the Hon'ble Supreme Court.
21. The rival challenges to the impugned Award have to be examined
within the settled parameters governing the exercise of supervisory
jurisdiction by this Court under Articles 226 and 227 of the Constitution.
Such jurisdiction is supervisory and not appellate . This Court does not
ordinarily re-appreciate the evidence or substitute its own conclusion for that
of the Industrial Tribunal merely because another view may be possible on
the same material. The Tribunal, being the primary forum for appreciation of
evidence and determination of questions of fact, is ordinarily entitled to have
its findings respected. This restraint, however, does not place an Award
beyond judicial scrutiny. The Court may examine whether the Tribunal has
acted within the bounds of its jurisdiction, addressed the questions arising
from the reference, applied the governing principles of law, considered the
material evidence bearing upon those questions, and arrived at findings
having a rational and demonstrable nexus with the material on record.
Where material evidence is ignored, the enquiry required by the reference is
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not undertaken, an erroneous legal principle is applied, or relief is granted
without the evidentiary foundation necessary to sustain it, the resulting
infirmity is not one of mere appreciation of evidence but is amenable to
correction in exercise of the supervisory jurisdiction of this Court. The
question is, therefore, not whether this Court would, upon a fresh
appreciation of the evidence, have reached a different conclusion, but
whether the Tribunal undertook the adjudicatory exercise required by the
reference and recorded findings sufficient in law and on the evidence to
sustain the relief granted.
22. The contours of the jurisdiction to issue a writ of certiorari were
explained by the Supreme Court in Syed Yakoob v. K.S. Radhakrishnan ,
AIR 1964 SC 477, wherein it was held:
“....... The adequacy or sufficiency of evidence led on a
point and the inference of fact to be drawn from the said
finding are within the exclusive jurisdiction of the Tribunal,
and the said points cannot be agitated before a writ court. It
is within these limits that the jurisdiction conferred on the
High Courts under Art. 226 to issue a writ of certiorari can
be legitimately exercised (vide Hari Vishnu Kamath v. Syed
Ahmed Ishaque(1), Nagendra Nath Bora v. The
Commissioner of Hills Division and Appeals, Assam(2), and
Kaushalya Devi v. Bachittar Singh(3).”
23. The same principle has been reiterated in the context of industrial
adjudication in Indian Overseas Bank v. I.O.B. Staff Canteen Workers'
Union , (2000) 4 SCC 245. The present challenges must, therefore, be
examined on that limited footing. This Court is not called upon to undertake
a fresh exercise of wage fixation or to determine which of the rival versions
on the evidence it would itself prefer. The enquiry is whether the Tribunal,
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while adjudicating the dispute referred to it, addressed the questions arising
from the reference, applied the governing legal principles, considered the
material evidence and recorded findings sufficient to sustain the relief
ultimately granted. The nature of the dispute referred to the Tribunal,
the issues framed by it and the findings recorded in the impugned
Award may, therefore, first be noticed.
24. The impugned Award dated 01.08.2002 arises out of the industrial
dispute referred by the appropriate Government vide its order No. F.24
(4524)/92-Lab./1003-8 dated 08.01.1993 between the Management of M/s
Hotel Sofitel Surya and its workmen. The dispute was referred for
adjudication to the Presiding Officer of Industrial Tribunal No. III on the
following terms of reference:
“Whether the workmen are entitled to the revision in their
pay scales, D.A., City Compensatory Allowance, H.R.A.,
Food Allowance, Free Meal Facility, Enhancement of leave,
Night Duty Allowance, Conveyance Allowance, Uniforms,
Leave Travel Allowance and if so what directions are
necessary in this regard?”
25. On 17.09.1994, on the basis of the pleadings of the parties, the
Tribunal framed the following issues:
1. Whether there is espousal?
2. Whether claim is not maintainable due to settlement?
3. As per the terms of reference.
26. The Tribunal thereafter proceeded to adjudicate the issues on the basis
of the evidence led by the parties. The first issue concerned the validity of
the espousal. After considering the evidence on the issue, the Tribunal
decided it in favour of the workmen. Although the Management has
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challenged the said finding before this Court, no substantial ground has been
made out warranting interference with the Tribunal's conclusion. The
Tribunal considered the evidence led on the issue, and its finding is
supported by the material on record. The finding of valid espousal,
therefore, does not call for interference in exercise of the supervisory
jurisdiction of this Court.
27. The Tribunal had also framed Issue No. 2 as to whether the claim was
not maintainable on account of any settlement. The Tribunal found the issue
to be redundant, observing that no such settlement had been pleaded either
in the Statement of Claim or in the written statement of the Management. As
no factual foundation for adjudication of the issue was found in the
pleadings, and no independent challenge to this finding has been raised
before this Court, no interference with the Tribunal's disposal of Issue
No. 2 is warranted.
28. The Tribunal thereafter proceeded to adjudicate the substantive claim
in terms of the reference. Upon consideration of the evidence, it held the
workmen entitled to revision in respect of the various heads specified in the
reference. The operative portion of the Award accordingly directed the grant
of further monetary and service-condition benefits, while providing that the
benefits and facilities already being extended by the Management would
continue. Among the directions so issued, the Tribunal directed that certain
wages and allowances be provided by reference to the rates and benefits
prevailing in the “ nearest Five Star Hotel ”. The relevant portion of the
operative directions reads as under:
“It is held that the workmen are entitled to the revision in
pay scales, D.A., City Compensatory Allowance, H.R.A.,
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Food Allowance, Free Meal Facility, Enhancement of leave,
Night Duty Allowance, Conveyance Allowance, Uniforms,
Leave Travel Allowance. Therefore, the management is
directed to pay the workmen salary i.e. pay plus house rent
allowance plus dearness allowance as revised by the
management of its own of different categories vide
Annexure ‘A’ reproduced hereinabove in para no. 17 of this
award from the date the management has already
started/provided the sum total of pay, HRA and DA shall be
above minimum wages. The management shall pay in
addition an amount every month equal to the sum of City
Compensatory Allowance, Food Allowance, Night Duty
Allowance, Conveyance Allowance paid by other nearest
Five Star Hotels in Delhi besides absolutely free meal when
on duty from the date of award. The management will also
provide 30 days privilege leave, uniforms and leave travel
allowance to the extent as provided by the other nearest five
star hotel in Delhi from the date of this award. The
management is further directed to pay the salary and
allowances as paid by nearest five star hotel w.e.f. 1.1.2003
onwards. The benefits and facilities already given shall
continue.”
29. The nature of the directions issued by the Tribunal is material to the
examination of the relief granted. The Award does not merely preserve the
wage structure and benefits already available to the workmen; it directs
additional monetary and service-condition benefits by reference to those
prevailing in other Five Star Hotels. The workmen's case before the Tribunal
was not that their wages had remained static or that the Management had
failed to grant revisions. Their case was that, notwithstanding the revisions
and benefits already extended, the wages and conditions of service at Sofitel
Surya continued to remain inferior to those prevailing in comparable Five-
Star hotels in Delhi and that a further revision was consequently warranted.
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The question before the Tribunal was, therefore, whether, after taking
into account the revisions already granted, the material on record
established a continuing disparity between the conditions prevailing at
Sofitel Surya and those obtaining in a properly comparable
establishment and, if so, the extent of the further entitlement.
30. That question necessarily had to be examined against the wage
structure actually prevailing at the relevant stage. The evidence shows that,
after the Charter of Demands, the wage structure underwent successive
revisions. Following the revision in August 1992, further revisions were
effected on five or six occasions, including increases in pay, D.A. and
H.R.A. The Award itself records, on the evidence of the workmen, that the
revised pay scales and increases in H.R.A. and D.A. were accepted and that
the benefits granted from time to time were neither refused nor objected to
by the Union. WW-2 stated in cross-examination that he had accepted the
increased wages in 1992, 1994 and 1995 without protest and that the other
employees had likewise accepted them. WW-3 similarly stated that she had
accepted the increased emoluments granted by the Management without
protest. More significantly, WW-4 admitted that, by the time of his cross-
examination, the scale demanded in the Statement of Claim was lower than
the scale actually being received by the workmen from the Management.
31. These admissions do not, by themselves, amount to a waiver of the
claim for further revision. Their significance lies in the fact that the wage
structure against which the original demand had been made had materially
changed by the time the claim was adjudicated. The successive revisions
thus became part of the factual position against which any continuing
disparity had to be assessed. The earlier wage structure, having been
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superseded by those revisions, could not by itself furnish the basis for
determining a further entitlement. The inquiry consequently had to proceed
from the wages, benefits and conditions of service actually prevailing at
Sofitel Surya and determine whether, notwithstanding the revisions already
granted, a material disparity continued to exist in comparison with workmen
of a properly comparable establishment.
32. It was in that context that the comparative claim had to be tested
against the evidence relied upon by the workmen. The onus of proving the
disparity was on the workmen/claimants. They were required to prove that
there existed some disparity or deficiency in the wages, benefits or
conditions of service of the workmen of Sofitel Surya as compared to the
workmen of other hotels. The mere existence of a higher wage or a more
favourable benefit in another establishment could not, by itself, establish a
corresponding entitlement at Sofitel Surya. The workmen were first required
to establish that the establishment relied upon furnished a proper basis of
comparison and, on that basis, to establish the disparity relied upon.
33. It is against that requirement that the comparative material relied upon
by the workmen has to be examined. Their claim for further revision was
founded principally upon the wage and service conditions prevailing in other
hotel establishments. The material relied upon included settlements entered
into by the Hotel Mazdoor Union with Hotel Claridges, Hotel Imperial,
Hotel Vikram, Hotel Diplomat and Hotel Alka. Hotel Ashok was also
referred to in the submissions, but does not form part of the settlement
material proved through WW-5. The settlements were tendered through
WW-5, M.M. Gop, who proved Ex. WW-5/1 and Ex. WW-5/2. In cross-
examination, he accepted that Hotel Surya was not a party to those
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settlements. The settlements establish the terms agreed upon in the
respective establishments during the periods to which they relate; they do
not, however, by themselves establish a corresponding entitlement for the
workmen of Sofitel Surya. Their relevance to the present claim depended
upon the establishments concerned being shown to furnish a proper basis of
comparison with Sofitel Surya.
34. The requirement of such comparability assumes significance in the
light of the principle governing comparative wage fixation. In Kamani
Metals & Alloys Ltd. v. Their Workmen , (1967) 2 SCR 463, the Supreme
Court, while considering the industry-cum-region principle, held that, in
fixing or revising wages, the wages of the workers concerned are to be
compared with those paid to workers of similar grade and skill by other
employers in similar or other industries in the region, along with the
capacity of the establishment or industry to pay. The Court further
emphasised that, in applying the industry-cum-region principle, comparable
units may be compared, but units which are dissimilar cannot be treated as
guides without making adequate allowance for the differences between
them. Each case is required to be considered on its own facts and only
relevant circumstances are to enter into the determination of the wage
structure.
35. When the material relied upon by the workmen is examined against
that standard, the necessary comparison is not established. The settlements
placed on record were not uniform and reflected different classifications,
wage structures and revisions in the establishments concerned. The
establishments could not, therefore, be treated as interchangeable merely
because they were hotels operating in Delhi or belonged to the Five-Star
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category. The workmen named Vikram, Claridges and Imperial as
establishments with which Sofitel Surya could be compared, but the
evidence did not establish any of them as an appropriate comparator. WW-1
stated that he could not give the details of the benefits being provided by
those hotels, while WW-2 similarly stated that he could not furnish the
particulars of D.A., H.R.A. and other benefits being paid by those
establishments to their staff. The evidence further does not furnish the
particulars necessary to compare the wages, D.A., H.R.A., other allowances
and facilities applicable to corresponding categories of workmen during the
relevant period. The material on record, therefore, does not furnish a
sufficient basis for determining whether the conditions of service at Sofitel
Surya were materially inferior to those prevailing in any particular
establishment relied upon by the workmen.
36. The consequence follows from that evidentiary failure. The onus
having rested upon the workmen, the failure of the evidence to establish the
requisite disparity means that the burden has not been discharged. The
workmen have not proved that there existed any disparity or deficiency
in the wages, benefits or conditions of service at Sofitel Surya as
compared to those prevailing for workmen of a properly comparable
establishment. In the absence of such proof, the Tribunal could not sustain
a further entitlement merely by adopting the wage structure or benefits
prevailing in another hotel.
37. That finding also bears upon the individual heads under which the
Tribunal granted further benefits. The Management had already effected
successive revisions and extended benefits under several of those heads. The
Award itself records that, under certain heads, the benefits already extended
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by the Management were equal to or more favourable than those claimed by
the workmen, including the birthday gift of Rs. 501/- with ½ kg. cake,
interest-free loan and commendation certificate. The Tribunal was,
therefore, required to determine whether, notwithstanding those revisions
and existing benefits, any residual disparity remained under the respective
heads and, if so, the extent to which the evidence established such disparity
so as to justify the particular benefit granted. Such determination necessarily
required comparison with the corresponding terms prevailing in a properly
comparable establishment. In the absence of the necessary comparative
evidence, that head-wise determination could not be made. The Award
contains no such determination, as the workmen failed to discharge the
burden of proving any deficiency in the wage structure, allowances or
facilities applicable to them as compared to those prevailing for workmen in
any other comparable hotel. The workmen have also not been able to lead
any evidence to establish any particular hotel with which the wages and
facilities of the workmen of Sofitel Surya could be compared. This has
resulted in an Award which has decided the dispute without sufficient
evidentiary foundation.
38. The deficiency and ambiguity in the Award are also apparent
from its operative portion , which directs the Management to provide
benefits with reference to the “nearest Five Star Hotel” and, in relation to
salary and allowances, to pay them “as paid by nearest five star hotel”. The
Award does not identify the establishment which is to constitute that
benchmark. Nor does it record a finding that any particular establishment
was comparable with Sofitel Surya or disclose the evidence on the basis of
which such comparability was determined. The expression “nearest Five
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Star Hotel” therefore does not identify a proven comparator. Geographical
proximity by itself could not establish comparability for the purpose of wage
fixation. The Tribunal was required to identify the particular establishment
which, on the evidence, constituted an appropriate comparator and to
determine the relevant wages and conditions of service prevailing there.
39. That identification could not be left to the stage of implementation.
The identity of the comparative hotel, the terms prevailing there and their
application to the workmen of Sofitel Surya formed part of the substantive
comparative exercise necessary to determine the entitlement itself. Before
directing the Management to extend wages, allowances or other benefits by
reference to another establishment, the Tribunal was required to identify the
establishment as a proper comparator, ascertain the corresponding wages
and conditions of service prevailing there, and test those terms against the
revised wages and benefits already prevailing at Sofitel Surya. Only upon
completion of that exercise could it determine whether any residual disparity
remained and, if so, what further benefit was warranted under the respective
heads. These were not merely ministerial matters of implementation; they
went to the determination of the entitlement itself. The Award does not
disclose that this essential comparative exercise was completed or that the
findings necessary to sustain the further entitlement were recorded.
40. The consequence is not merely uncertainty in implementation. Since
the Award does not identify the establishment whose wages and benefits are
to constitute the benchmark, its operative directions cannot be given effect
to without first determining the very comparative facts upon which the
entitlement depends. The Award is, therefore, incapable of effective
implementation in its present form and leaves the parties to a further
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dispute over the identity and terms of the establishment to be treated as
the “nearest Five Star Hotel”.
41. There is, in addition, a fundamental disconnect between the reasons
recorded in the Award and the relief ultimately granted. While the Tribunal's
discussion addresses certain heads of claim, namely pay scales, D.A.,
H.R.A., C.C.A., Food Allowance, Free Meal Facility and L.T.A., the
operative portion grants relief under several further heads, including
enhancement of leave, Night Duty Allowance, Conveyance Allowance and
Uniforms, without recording the corresponding factual findings necessary to
establish the workmen's entitlement to such relief. There is no identification
of the establishment sought to be treated as the comparator, no
determination of the benefit prevailing in that establishment, no finding of
the difference between that benefit and the benefit already available at
Sofitel Surya, and no reasoning explaining the particular extent of the
benefit directed to be granted.
42. The financial capacity of the Management also required consideration
with reference to the financial position of the establishment during the
period relevant to the dispute. MW-1, the Financial Controller, deposed that
when the Charter of Demands was received, the financial position of the
Hotel was poor, payment of the existing wages was difficult and the Hotel
was running in losses, with low occupancy and turnover. This position was
also borne out by the evidence of WW-4, examined on behalf of the
workmen, who admitted in cross-examination that the balance sheets
disclosed losses for the years 1991-92, 1992-93 and 1993-94. Although
WW-4 stated that the losses were reducing year after year and that the
business was thereafter increasing, the subsequent improvement in the
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financial position could not, by itself, determine the capacity of the
establishment to bear the additional burden at the time when the dispute and
the demand for further revision arose. The Tribunal, however, concluded
that the Hotel had sufficient surplus and the capacity to bear higher wages
without disclosing a reasoned reconciliation of that conclusion with the
admitted losses during the relevant period, or determining the additional
financial burden which the benefits granted by the Award would impose
upon the Management. The finding on financial capacity, therefore, does
not disclose a sufficient and reasoned assessment of the financial
material relevant to the dispute.
43. The cumulative consequence of the foregoing is that the infirmity in
the Award goes to the very foundation of the entitlement granted by the
Tribunal. This is not a case where an otherwise established entitlement was
merely quantified incorrectly. Before directing a further revision of wages
and additional service benefits, the Tribunal was required to determine, on
the basis of the evidence, whether the workmen of Sofitel Surya were in fact
subject to any continuing disparity in comparison with a properly
comparable establishment, after taking into account the successive revisions
and benefits already extended by the Management, and, if so, the nature and
extent of that disparity and the particular relief warranted under each head.
That exercise was not undertaken. No particular establishment was
established on the evidence as a proper comparator; the corresponding
wages and conditions of service were not determined; no residual disparity
was demonstrated after accounting for the revised conditions at Sofitel
Surya; and no reasoned determination connected any such disparity with the
several heads and extent of relief ultimately granted. The Tribunal's
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conclusion regarding the financial capacity of the Management also does not
disclose a reasoned reconciliation of the relevant financial material or the
additional burden arising from the relief granted. In these circumstances, it
clearly follows that the learned Tribunal has travelled beyond the scope
of the reference in granting relief without first determining the factual
foundation necessary to sustain such entitlement. The substantive relief,
therefore, rests not upon a determination of an established entitlement, but
upon factual matters which the Tribunal itself was required to determine and
which remain undetermined. The Award consequently lacks the evidentiary
and analytical foundation necessary to sustain the substantive relief granted.
44. The same deficiency renders the operative directions incapable of
implementation without a further adjudicatory exercise. An adjudicatory
award must determine the rights and obligations of the parties with sufficient
precision to enable the relief granted to be implemented without requiring
the parties to re-adjudicate the very matters upon which entitlement depends.
In the present case, the directions do not furnish the benchmark, applicable
wage structure, corresponding categories or components of remuneration
necessary for implementation. Giving effect to them would consequently
require a fresh exercise of comparison, selection and determination. The
Award, therefore, cannot be sustained in its present form.
45. It is important, however, to define the scope of the conclusion
reached. The finding of valid espousal is affirmed and, consequently, the
reference cannot be said to have lacked the character of an industrial dispute.
Nor is the Court holding that the workmen were, as a matter of principle,
precluded from seeking further revision of wages or conditions of service.
The conclusion is confined to the Award under challenge: the further wage
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revision and package of benefits granted by the Tribunal were not preceded
by the necessary determination of the factual and evidentiary basis required
to sustain the relief granted, as the claimants/workmen failed to lead the
necessary evidence to prove that there was certain disparity in wages and
allowances between them and other hotels of the same category. The
workmen had also not been able to lead proper evidence to identify any
“hotel” with which their services could be compared. Hence, the Award
passed by the Tribunal was without any evidential basis.
CONCLUSION
46. The Award dated 01.08.2002 passed by the Industrial Tribunal-III,
Delhi in I.D. No. 8/1993 is accordingly set aside .
47. Accordingly, W.P.(C) No. 3734/2003 filed by the Management is
allowed.
48. In view of the setting aside of the substantive relief granted by the
Award, the question as to the date from which such relief was to operate
does not survive for independent consideration. W.P.(C) No. 200/2003 filed
by the workmen, seeking modification of the effective date of the benefits
awarded, is accordingly disposed of .
49. Nothing contained in this judgment shall affect any wage revision,
benefit or condition of service independently introduced or extended by the
Management and otherwise applicable to the workmen, insofar as such
entitlement does not derive from the Award dated 01.08.2002.
50. The interim order dated 28.05.2003 shall stand disposed of in view of
the final disposal of the writ petitions.
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51. There shall be no order as to costs. Pending application(s), if any, also
stand disposed of.
SHAIL JAIN
JUDGE
SEPTEMBER 03, 2026
RM
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