Case: Shri Gajanan Weaving Mills Vs. Their Workmen

1. This is an appeal against a decision of the industrial court, Bombay, dated 18 March 1960. The facts are not in controversy. In an industrial dispute, the Labour Appellate Tribunal, Bombay, had passed an award on 9 July 1956 concerning dearness allowance, the operative portion of which is in these turms :"We are impressed by the facts and reasoning of the Sen award and we are of the view that the rate of dearness allowance given by him to well founded and be applied."2. Now the Sen award which had sometime earlier been made concerning certain mills at Sangli where the appellant mills are situate, provided as follows :"The minimum wage having been fixed at Rs. 24 per month of 26 working days, it seems to me that the scales of pay may reasonably be fixed at Sholapur rates minus 8.5 per cent ... and that in the case of dearness allowance also there should be similar deduction. I direct accordingly."3. By an award made on 1 May 1958, which was after the date of the Sen award, the rate of dearness allowance to the workmen of the Jam Mill of Sholapur was subjected to a maximum of Rs. 1.50 nP. This effected a reduction in that rate. Thereafter, by an agreement between the workmen and the employers, the rate of dearness allowance in other mills in Sholapur was similarly adjusted and reduced. The appellant mills thereupon also adjusted the dearness allowance payable by it under the award of 9 July 1956 in terms of the said award of 1 May 1958. The respondent workmen then raised a dispute contending that the appellant mills had no right to vary the award of 9 July 1956 and to reduce the dearness allowance payable to them under it as they had done. The appellant mills contended that the proper construction of the award of 9 July 1956 was that the dearness allowance had been linked with the rate prevailing at Sholapur and was therefore liable to be varied as the Sholapur rate varied and it was consequently entitled to reduce it as and when the Sholapur rate was reduced. The labour court and the industrial court held against the appellant mills. Hence this appeal

Court's reasoning:
4. When the Sen award referred to the Sholapur rate, it meant the rate prevailing at the time at Sholapur, for the subsequent award of 1 May 1958 and the agreements made in regard to the Sholapur mills earlier mentioned were not oven in contemplation then. The reason why the Sen award fixed the dearness allowance for the Sangli mills by reference to the Sholapur rate was that a cost of living index for Sholapur area was available which there was not for Sangli. In fixing the dearness allowance rate for Sangli, that cost of living index at Sholapur was taken into account because that was the nearest place to Sangli having such an index. That is the only reason why the sen award referred to the Sholapur rate.5. It would be reading too much in the Sen award to may that it intended that if for any reason the rate at Sholapur area was reduced, similar reduction would have to be made in the rate at Sangli mills. It is important to note that what was fixed was the Sholapur rate, that is, the rate then prevalent in Sholapur less a certain fixed deduction. As we have earlier stated, the rate at Sholapur was reduced by an award, and it is not disputed that that award reduced the rate not because there was a fall in the cost of living index but because the business of the mill concerned had suffered aBut that was not the position at Sangli. It was not as if the conditions of business in both the places bad necessarily to be the same, so that if business in one place suffered from a depression, the business at the other place must also meet a similar fate. Therefore, there was no reason for Sen award to have directed that if the Sholapur rate was increased or reduced, similar change would be made in the Sangli rate. We think that the appellants contention is whollydispute in the present case concerns the months May to August 1958. A similar dispute had earlier arisen concerning April 1958. That dispute was decided against the appellant mills by the Industrial courts as also the High Court of Bombay. It was said on behalf of the respondents that the present proceeding is therefore barred by res judicata. In the view that we have taken of the merits of the question, we do not think it necessary to pronounce on this contention.