Case: Dalmia Dadri Cement, Limited Vs. Avtar Narain Gujral and Others

Venkatarama Ayyar, J. 1. This is an appeal by special leave against the award of the industrial tribunal, Punjab, Jullundur, dated 16 April 1959, made in Reference 40 of 1958. The appellant is a public limited company engaged in the manufacture of cement. On 8 April 1955, the appellant and its workmen entered into an agreement, Ex. A6, setting the mattes in dispute between them and fixing inter alia grades of several categories of workmen and their scales of wages. The agreement proceeds that the settlement should be binding on both the parties for a period of two years commencing from 8 April 1955, but that the union would have the right to move for re-consideration of the grades, if that was recommended by the government, wage board. It is common ground that the union terminated this agreement as from 8 April 1957, hereinafter referred to as "the Act" and then made a demand on the management for revision of the agreement in respect of the grades of the workmen and certain allowances. On 19 May 1957, the appellant and the union referred their disputes to the decision of two arbitrators but as they could not agree they wrote to the Government of Punjab on 30 August 1957, to refer the matter to the industrial tribunal, as an umpire. Before any acting was taken on this, both the parties applied to the Punjab Government on 5 April 1958, under S.10(2) of the Act for referring the disputes to a tribunal, and on 24 July 1958, the Government referred them to the industrial tribunal, Punjab, Jullundur, for adjudication under S. 10(1)(d) of the Act. The tribunal pronounced its with it, the appellant has preferred this appeal against the same with the leave of this Court. 2. Three contentions have been pressed before us in this appeal : (1) The tribunal which heard the reference was not validly constituted;(2) The award in so far as it revised the grades of workmen is illegal and erroneous : (3) The award of an additional allowance of Rs. 5 per mensem to the shift workers is not justified.These contentions will now be considered in their order : (1) Taking up the first contention that the tribunal was not validly constituted, the relevant facts are that on 28 April 1953, the Government of Punjab issued a notification whereby it constituted an industrial tribunal under S.7 of the Act and appointed Sri A. N. Gujral as its sole member and presiding officer under S. 7(3)(c) of the Act. Sri Gujral continued to hold this office at all material times. Parliament then enacted the Industrial Disputes (Amendment and Miscellaneous Provisions) Act 36 of 1956, whereby it introduced several amendments in the Industrial Disputes Act, 1947. This Act which came into force on 10 March 1957, repealed S.7 in the principal Act, and substituted in its place Ss. 7A, 7B and 7C. On 19 April 1957, the Government of Punjab issued a notification under S. 7A constituting a new tribunal and appointed Sri A. N. Gujral as its sole member and presiding officer. It is the award made by this tribunal that is the Subject-matter of the present appeal. Section 7A(3) omitting what is not relevant for the present discussion runs as follows : "A person shall not be qualified for appointments as the presiding officer of a tribunal unless - (a) he * * *; (b) he was held the office of the chairman or any other members of the Labour Appellate Disputes (Appellant Tribunal) Act, 1950, or of any tribunal, for a period of not less than two years." 3. It was under this provision that Sri A. N. Gujral who had held the office of the president of the industrial tribunal, Punjab from 28 April 1953, was appointed as the presiding officer of the new tribunal. It is the contention of the appellant that then appointment of Sri A. N. Gujral as president of the tribunal on 28 April 1953, was invalid, because according to S. 7(3)(c) which is the material provision, it is only a person who us "qualified for appointment as a Judge of a High Court" that could be appointed as a member and Sri A. N. Gujral was not qualified to be appointed as a Judge of the High Court on that date as he was more than sixty years of age, having been born on 4 June 1892 and that as the appointment of Sri A. N. Gujral as member on 28 April 1953, was invalid, the period during which he functioned as the president of the industrial tribunal constituted under S. 7 cannot count for the purpose of S. 7A(3)(b). The question whether a person who has attained the age of sixty could validly be appointed as a member of the tribunal under S. 7(3)(c) came up for consideration before this Court in Atlas Cycle Industries, Ltd. v. Its workmen in Civil Appeal No. 188 of 1961, decided on 8 February 1962 [Since reported in p. 250 (infra)] where also the validity of the appointment of Sri A. N. Gujral under the notification, dated 28 April 1953 aforesaid, was in question. The present appeal was heard along with Civil appeal No. 188 of 1961 and but our judgment in that appeal we have held that on the construction of S. 7(3)(c), a person who had attained the age of sixty could validly he appointed as a member. Following that decision we must hold that Sri A. N. Gujral was validly appointed to the industrial tribunal on 28 April 1953, and that in consequence, he was duly qualified to be appointed as presiding officer of the tribunal under S. 7A(3)(b).(2) We shall now proceed to consider the contention of the appellant that the revision of the grades of workmen and their scale of wages was illegal and erroneous. The argument of the appellant is that there having been an agreement between the parties Ex. A6, fixing the categories of workmen and their scales of wages, the tribunal should not have been a change of circumstances. Reliance was placed on the observation of this Court in Burn & Co., Calcutta v. Their employees [1957 - I L.L.J. 226] as supporting this contention. There a dispute between the management and the workmen with reference to the fixation of fair wages was referred for adjudication to the industrial tribunal under S. 10(1)(c) of the Act and the tribunal under S. 10(1)(c) of the Act and the tribunal gave its award on an consideration of the evidence adduced by the parties.That award was in operation under S.19(3) of the Act until 12 July 1951, when it was terminated by the union under S. 19(6). Thereafter the union made a demand for higher wages as from 12 July 1951, and as the management declined to grant the request, there arose an industrial dispute, and, that was again referred by the Government for adjudication to an industrial tribunal. It was found by the tribunal on the evidence adduced by the parties that there was no change of circumstances since the last adjudication was made, and on that the question was raised whether the award of the tribunal for the precious year was binding on the parties as res Judicata. This Court held that though S. 11 of the Civil Procedure Code was not as such applicable the principles of res judicata underlying that section were of wider application and observed : "And there are good reasons why this principle should be application to decisions of industrial tribunal also. Legislation regulating the relation between capital and labour has two objects in view. It seeks to ensure to the workmen who have not the capacity to treat with capital on equal terms, fair returns for their labour. It also seek to prevent disputes between employer and employees, so that production might not be adversely affected and the larger interests of the society might not suffer. Now, if we are to hold that an adjudication loses its force when it is repudiated under S. 19(6) and that the whole controversy is at large, then the result would be that far from reconciling themselves to the award and settling down to work it, either party will treat it as a mere stage in the prosecution of a prolonged struggle and far from bringing industrial peace, the awards would turn our to be but truces giving the parties breathing time before resuming the parties breathing time before resuming hostile action with renewed vigour. On the either hand, if we are to regard them as intended to have long-term operation and at the same time hold that they are liable to be modified by change in the circumstances on which they were based, both the purposes of the legislature would be served."On the very principle of it, this decision can have application only where there is an adjudication by the tribunal on the merits. In the present case there has been no adjudication by any tribunal but only a settlement between the parties. That would, of course, be binding on them but only to the extent provided in the agreement itself. Here the agreement was to be in operation for two years. It provides for the revision of the terms even earlier in accordance with the decision of the wage board. The agreement, therefore, becomes spent on its one terms, on 8 April 1957, and that is how the parties understood it as is clear from their conduct in referring the disputes including the one for revision of grades, first to the decision of arbitrators and then that failing, to the Government of Punjab, under S.10(2) of the Act. We must accordingly hold that it was competent to the tribunal to revised the grades for the period subsequent to the agreement event if there was no proof of change in circumstances. 4. It is next argued that in deciding that the existing grades should be revised, the tribunal has failed to consider one of the points raised by the appellant which was thus state in its statement : "Though a small unit, its scales are higher that those in the bigger surrounding factories." 5. It is urged that this omission vitiates the finding of the tribunal on this question. It is true that the tribunal does not expressly deal with this point in its award. In view of this we have examined the record with a view to satisfy ourselves whether that had resulted in failure of justice. The union has adduced considerable body of evidence as to the grades and scales of wages in this industry with a view to show that the existing scales required revision. Exhibits A1, A2 and A5 are statements of the scales of wages in the cement industry. The secretary of the union, Madanlal, has also given evidence on this matter as A.W. 3. Besides filing the above documents, he stated that the wages for some of the skilled workmen were less than what were paid in other factories. He also filed Ex. A10 which is a comparative chart of wages prevailing in certain industries. As against this there was practically no evidence on the side of the appellant. R. L. Agrawal, R.W. 2, who has been the manager of the appellants concern for the last nine months stated in his examination in-chief "our scales and grades are higher than those prevailing in other cement factories." But in cross-examination he admitted that he had got no personal knowledge about the wages prevailing in other cement concerns. As examination of the evidence let in by the appellant clearly shown that it was chiefly directed to showing that the company losses and that, therefore, it would not be able to bear the burden of an increase in the wages. It seems probable that before the tribunal the appellant did not place much reliance on the contention that the scale of wages in this factory compare favourably with those prevailing in other cement concerns and that what it seriously pressed was the contention that the industry was not in a position to pay more wages. Having examined the evidence we are satisfied that the appellant has no real cause for complaint on this score.That this revision has not in fact resulted in any injustice could be seen from the following statement showing the position before and under the award : SEMI-SKILLED Existing Revised DEMAND A Rs. 40-2-60 Rs. 45-2 1/2-80 Merged into one grade B Rs. 55-2 1/2-85 Rs. 45-3 1/2-77 1/2-4-97 Rs. 45-2 1/2-80-3-95 SKILLED WORKMEN B Rs. 70-3-110 Rs. 70-3-110 Merged into one grade A Rs. 80-4-125 Rs. 80-4-125 Rs. 80-4-125 JUNIOR CLERKS Rs. 50-4-80 Rs. 60-5-85-7 1/2-122- Rs. 50-5-90-6-120 10-173 1/2 SENIOR CLERKS Rs. 80-4-100-5- Rs. 90-7 1/2-120-10-220- Rs. 90-6-120-8-160- 125 15-310 EB-10-210 What the tribunal has done is simply to amalgamate different categories into one and to made consequential changes. The reason for this is thus stated in the award : "If I fix the scales of semi-skilled and skilled workmen as such, it will give rise to a number of industrial disputes when the management would be required to fix these categories in these classes." 6. The tribunal also refers to the fact that the number of unskilled workmen is not very high and that a slight increase in their wages would be justified. As regards the skilled workmen it takes into account the rates which are in vogue in other industries. In view of these facts, the revision of the grades and scales of wages of the workmen by the tribunal must be held to be justified and just. 7. A contention was also advanced that in recessing the scale of wages of junior clerks, the tribunal had taken into account the award made by it in the case of the Punjab Cloth Mills, Bhiwani, that the said award had not been admitted as evidence in the present case, and as it has been relied on for reaching the finding that the scale of wages of junior clerks required revision, the award is illegal, and must be set aside. The decision of this Court in Burn & Co., Ltd. v. Their workmen [1959 - I L.L.J. 450] is cited as a precedent directly supporting this contention. But, that however, is a decision on its facts, which were that an award had been given by an industrial tribunal fixing the wage structure in. An industry, and both the parties had agreed to accept the award. Subsequently the workmen wanted a revision of the wages, and the dispute was referred to a tribunal for adjudication. There was no evidence that the had been any change in the circumstances since the date of the previous award. But the tribunal revised the wages-structure on the strength of an award made in another reference, which had not been admitted as evidence in the case. It was with reference to these facts that this court observed :"It was points out to us that the tribunal had referred to some award in connexion with Martin Burn & Co., of the existence of which there was no evidence in the record and it was conceded on behalf of the workmen that this was so, It is patent, therefore, that so far as the workmen are concerned the award of the tribunal is based on some material which both parties concede does not exist in the record. There is no other reason given for altering the scales of pay and dearness allowance so far as the workmen are concerned." 8. Thus the award was set aside on the ground that apart from the award in Martin Burn & Co. case which was not in evidence, there was no other material in support of it. That is no other material in support of it. That is not the position here. The award given in the case of the Punjab Cloth Mills, Bhiwani, was not the only evidence before the tribunal, and even it that is rules out, there was on record other evidence supporting the demand for revision, on which the finding of the tribunal could be sustained. It should also be mentioned that the tribunal has not fully adopted the scale fixed in Punjab Cloth Mills case. It has modified it so as to suit the present case. The reference to the award in Punjab Cloth Mills case had not resulted in any prejudice to the appellant, and we must therefore, decline to interfere on this ground. 9. The last point urged for the appellants relates to the extra allowances of Rs. 5 per mensem directed to be paid to the shift workers. It is contended that shift working is incidental to service in this establishment and must be taken to be one of its service conditions and the workmen who had got into employment with full knowledge of it, cannot now be permitted to claim more on this account. But them there was evidence - and indeed this was admitted - that the clerks working in the shifts have to work for more hours than those working in the offices. Under the circumstances the grant of an workmen cannot be said to be unjust.A contention was also raised that there was no justification for increasing the dearness allowances but this was expressly abandoned before us.

Decision:
0[ds]The question whether a person who has attained the age of sixty could validly be appointed as a member of the tribunal under S. 7(3)(c) came up for consideration before this Court in Atlas Cycle Industries, Ltd. v. Its workmen in Civil Appeal No. 188 of 1961, decided on 8 February 1962 [Since reported in p. 250 (infra)] where also the validity of the appointment of Sri A. N. Gujral under the notification, dated 28 April 1953 aforesaid, was in question. The present appeal was heard along with Civil appeal No. 188 of 1961 and but our judgment in that appeal we have held that on the construction of S. 7(3)(c), a person who had attained the age of sixty could validly he appointed as a member. Following that decision we must hold that Sri A. N. Gujral was validly appointed to the industrial tribunal on 28 April 1953, and that in consequence, he was duly qualified to be appointed as presiding officer of the tribunal under S. 7A(3)(b).(2)On the very principle of it, this decision can have application only where there is an adjudication by the tribunal on the merits. In the present case there has been no adjudication by any tribunal but only a settlement between the parties. That would, of course, be binding on them but only to the extent provided in the agreement itself. Here the agreement was to be in operation for two years. It provides for the revision of the terms even earlier in accordance with the decision of the wage board. The agreement, therefore, becomes spent on its one terms, on 8 April 1957, and that is how the parties understood it as is clear from their conduct in referring the disputes including the one for revision of grades, first to the decision of arbitrators and then that failing, to the Government of Punjab, under S.10(2) of the Act. We must accordingly hold that it was competent to the tribunal to revised the grades for the period subsequent to the agreement event if there was no proof of change in circumstancesIt is true that the tribunal does not expressly deal with this point in its award. In view of this we have examined the record with a view to satisfy ourselves whether that had resulted in failure of justice. The union has adduced considerable body of evidence as to the grades and scales of wages in this industry with a view to show that the existing scales required revision. Exhibits A1, A2 and A5 are statements of the scales of wages in the cement industry. The secretary of the union, Madanlal, has also given evidence on this matter as A.W. 3. Besides filing the above documents, he stated that the wages for some of the skilled workmen were less than what were paid in other factories. He also filed Ex. A10 which is a comparative chart of wages prevailing in certain industries. As against this there was practically no evidence on the side of the appellant. R. L. Agrawal, R.W. 2, who has been the manager of the appellants concern for the last nine months stated in his examination in-chief "our scales and grades are higher than those prevailing in other cement factories." But in cross-examination he admitted that he had got no personal knowledge about the wages prevailing in other cement concerns. As examination of the evidence let in by the appellant clearly shown that it was chiefly directed to showing that the company losses and that, therefore, it would not be able to bear the burden of an increase in the wages. It seems probable that before the tribunal the appellant did not place much reliance on the contention that the scale of wages in this factory compare favourably with those prevailing in other cement concerns and that what it seriously pressed was the contention that the industry was not in a position to pay more wages. Having examined the evidence we are satisfied that the appellant has no real cause for complaint on this score.That this revision has not in fact resulted in any injustice6. The tribunal also refers to the fact that the number of unskilled workmen is not very high and that a slight increase in their wages would be justified. As regards the skilled workmen it takes into account the rates which are in vogue in other industries. In view of these facts, the revision of the grades and scales of wages of the workmen by the tribunal must be held to be justified and just8. Thus the award was set aside on the ground that apart from the award in Martin Burn & Co. case which was not in evidence, there was no other material in support of it. That is no other material in support of it. That is not the position here. The award given in the case of the Punjab Cloth Mills, Bhiwani, was not the only evidence before the tribunal, and even it that is rules out, there was on record other evidence supporting the demand for revision, on which the finding of the tribunal could be sustained. It should also be mentioned that the tribunal has not fully adopted the scale fixed in Punjab Cloth Mills case. It has modified it so as to suit the present case. The reference to the award in Punjab Cloth Mills case had not resulted in any prejudice to the appellant, and we must therefore, decline to interfere on this groundBut them there was evidence - and indeed this was admitted - that the clerks working in the shifts have to work for more hours than those working in the offices. Under the circumstances the grant of an workmen cannot be said to be unjustA contention was also raised that there was no justification for increasing the dearness allowances but this was expressly abandoned before us.