# [1966] 1 S.C.R. 25

- **Citation:** [1966] 1 S.C.R. 25
- **Court:** Supreme Court of India
- **Decided:** 1965-04-23
- **Case number:** Civil Appeal No. 4 of 1965
- **Bench:** P. B. Gajendragadkar, K. N. Wanchoo, M. Hidayatullah, V. Ramaswami
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1966-1-s-c-r-25-3539
- **Pages:** 39

## Headnote

lndustriul Disputes Act, 1947, s. 2(s)-Definition of 'workn1an'-'Supervisory capacity' ·whether different fro1n 'supervisory work'-Disputes about
non-workn1en when can he raised by ..,vorknien-Central Govern1nent whe1!ier can refer such disputes to Trihunal-Need-hased n1inimu1n "tt-'ageFor1nula to be adopted for connunption units per fa1nily-Proper coefficient for lVhite-col!ar lvorkers, lvhat is-Enforcen1ent of a1vard : discretion of Tribunal in the 111atter of.
The Class ll and Class Ill staff of the Reserve Bank of India through
their Association,
and Class lV staff through their Union raised an
industrial dispute 1,vith the Bank \vhich was referred by the Central Government on March 21, 1960, to the National Tribunal. The items referred bore upon scales of pay, allowances, and sundry matters connected
with the conditions of service of the three classes, the most important ones
being the den1and of Class 11 staff for a scale commencing with Rs. 500,
and the <le1nand of other workmen for a need-based minimum wage as
recommend·:::d by the Tripartite Conference. of 1957.
In its award the
1'ribunal pointed out that Class II staff worked in a supervisory capacity
and its demand for a minimum salary of Rs. 500, if conceded, \Vould
take the said staff out of the category of 'workman' as defined in s. 2(s)
of the Industrial Disputes Act, 1947.
Such an award, and any award
carrying \vages OCyond Rs. 500 at any stage, the Tribunal said, 1,vas
beyond its· jurisdiction to make.
It went on to ho1d that other workmen
could not raise a dispute which woukl involve consideration of matters.
in relation to non-\vorkmen and that it would be even beyond the jurisdiction of the Central Government to refer such a dispute under the Industrial
Disputes Act. The Tribunal ther-efore made no a\vard in regard to the
supervisory staff in Class II. As for the demand for a need-based minimum
wage, the Tribunal held tha,t the Tripartite rewlution had not been accepted
by the Government and was not binding; that a need-based minimum wage
was an ideal incapable of present achievement; that as against the demand
of a formula of 3 consumption units per family it was possible to allow
only 2.25 units; and that thei coefficient for white-collar \vorkers wouJd
not be changed from 80 to 120 as demanded, The Tribunal's award was
given on September 8, 1962 but made operative from January I, 1962.
Dissatisfied with the award, the workmen appealed by special leave, to this
Court.
Subsequently by resolution dated April 24, 1963 the Resen-e
Bank raised the minimum total emoluments, as envisaged by the definition
of wages, of each and every m-ember of the Class II staff, above Rs. 500
with effect from the date of operation of the a\vard.
In their appeal before this Court it was urged on behalf of the appellants
that there was a difference between 'spervisory capacity' mentioned in
cl. (iv) of s. 2(s) and 'supervisoiy work' mentioned in the main part of
the section. and as Class II officers did not work in a 'sup·~rvisorv capacity' they were 'workmen' under the definition.
'Supervisory Capacity' it
was urged, arose only \vben the employee was an agent of the employer.
26
SUPREME COURT REPORTS
--....
[1966] l S.C.R.
It '\.Vas aiso urged that Class' n \VOrkmen only had clerical and checking
A
duties which were not supervisory in character.
Alternatively it \Vas
contended that as Class lI was filled by promotion from Class III the
question as to the emoluments of the former could and should have been
gone into by the Tribunal in view of the 'Principle
enunciaited
in
the
Dimakuchi Tea Estate case.
HELD : (i) (a) Tue amendment to s. 2(s) of the Industrial Disputes
Act in 1956 introduced among the categories of persons already mentioned
B
as 'workmen' persons employed to do supervisory and technical \York.
So
far the language of the earlier enactment was used. \Vhen, however, exceptions were engraftotl, that language was departed from in cl. (iv) partly
because the draftsmen

## Text

_Characters 0–39,949 of 99,999. This is a partial read: ask again with offset=39949 for what follows._

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A ALL INDIA RESERVE BAl'llX EMPLOYEES ASSOCIATION
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v.
RESERVE HANK OF INDIA
April 23, 1965
(P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO,
M. HIDAYATULLAH AND V. RAMASWAMI, JJ.]
lndustriul Disputes Act, 1947, s. 2(s)-Definition of 'workn1an'-'Supervisory capacity' ·whether different fro1n 'supervisory work'-Disputes about
non-workn1en when can he raised by ..,vorknien-Central Govern1nent whe1!ier can refer such disputes to Trihunal-Need-hased n1inimu1n "tt-'ageFor1nula to be adopted for connunption units per fa1nily-Proper coefficient for lVhite-col!ar lvorkers, lvhat is-Enforcen1ent of a1vard : discretion of Tribunal in the 111atter of.
The Class ll and Class Ill staff of the Reserve Bank of India through
their Association,
and Class lV staff through their Union raised an
industrial dispute 1,vith the Bank \vhich was referred by the Central Government on March 21, 1960, to the National Tribunal. The items referred bore upon scales of pay, allowances, and sundry matters connected
with the conditions of service of the three classes, the most important ones
being the den1and of Class 11 staff for a scale commencing with Rs. 500,
and the <le1nand of other workmen for a need-based minimum wage as
recommend·:::d by the Tripartite Conference. of 1957.
In its award the
1'ribunal pointed out that Class II staff worked in a supervisory capacity
and its demand for a minimum salary of Rs. 500, if conceded, \Vould
take the said staff out of the category of 'workman' as defined in s. 2(s)
of the Industrial Disputes Act, 1947.
Such an award, and any award
carrying \vages OCyond Rs. 500 at any stage, the Tribunal said, 1,vas
beyond its· jurisdiction to make.
It went on to ho1d that other workmen
could not raise a dispute which woukl involve consideration of matters.
in relation to non-\vorkmen and that it would be even beyond the jurisdiction of the Central Government to refer such a dispute under the Industrial
Disputes Act. The Tribunal ther-efore made no a\vard in regard to the
supervisory staff in Class II. As for the demand for a need-based minimum
wage, the Tribunal held tha,t the Tripartite rewlution had not been accepted
by the Government and was not binding; that a need-based minimum wage
was an ideal incapable of present achievement; that as against the demand
of a formula of 3 consumption units per family it was possible to allow
only 2.25 units; and that thei coefficient for white-collar \vorkers wouJd
not be changed from 80 to 120 as demanded, The Tribunal's award was
given on September 8, 1962 but made operative from January I, 1962.
Dissatisfied with the award, the workmen appealed by special leave, to this
Court.
Subsequently by resolution dated April 24, 1963 the Resen-e
Bank raised the minimum total emoluments, as envisaged by the definition
of wages, of each and every m-ember of the Class II staff, above Rs. 500
with effect from the date of operation of the a\vard.
In their appeal before this Court it was urged on behalf of the appellants
that there was a difference between 'spervisory capacity' mentioned in
cl. (iv) of s. 2(s) and 'supervisoiy work' mentioned in the main part of
the section. and as Class II officers did not work in a 'sup·~rvisorv capacity' they were 'workmen' under the definition.
'Supervisory Capacity' it
was urged, arose only \vben the employee was an agent of the employer.
26
SUPREME COURT REPORTS
--....
[1966] l S.C.R.
It '\.Vas aiso urged that Class' n \VOrkmen only had clerical and checking
A
duties which were not supervisory in character.
Alternatively it \Vas
contended that as Class lI was filled by promotion from Class III the
question as to the emoluments of the former could and should have been
gone into by the Tribunal in view of the 'Principle
enunciaited
in
the
Dimakuchi Tea Estate case.
HELD : (i) (a) Tue amendment to s. 2(s) of the Industrial Disputes
Act in 1956 introduced among the categories of persons already mentioned
B
as 'workmen' persons employed to do supervisory and technical \York.
So
far the language of the earlier enactment was used. \Vhen, however, exceptions were engraftotl, that language was departed from in cl. (iv) partly
because the draftsmen followed the language of cJ. (iii) and partly because
from persons employed on supervision work some are to be excluded
he.cause they dra\v \vage.s exceeding Rs. 500 per month and some because
they function mainly in a managerial capacity or have duties of the same
i:haracter.
But the unity bet\veen the opening part of the definition and
C
cl. (iv) was expressly preserved by using the word 'such' twice in the
()pening part.
The \.Vords, which bind the two parts, are not-"but does
not include any person".
They are--"but does not include any such
person" showing clearly that what is being excluded is a person \.vho answers
the description "employed to do supervisory work" and he is to be excluded because being~ employed in a 'supervisory capacity' he drav.·s \Vages
exceeding Rs. 590 per month or exercises functions of a particular charac-
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Like the Taft-Hartley Act in the United States
the Amending Act
of 1956 in our country was passed to equalise bargaining power and
also to give the power of bargaining and invoking the Industrial Disputes
Act to supervisory workmen, but it gave it only to some of the workmen
employed on supervisory work.
'Workman' here includes an employee
employed as supervisor.
There are only two circumstances in which
such a person ceases to be a workman. Such a person is not a workman
E
if he draws wages in excess of Rs. 500 per month or if he performs 1nanagerial functions by reason of a po\ver vested in him or by the nature
of duties 2ttachcd to his office. The person \vho ceases to be· a ·\vorkman
is not a person who does not answer .the. description "employed to do
supervisory work" but one who does answer that description.
He goes
out of the category of "workmen" on proof of the circumstances excluding
him from !ho category. [42 F-H]
Packard· Motor Co. v~ T.Jze National Labour Relatloi1~ Board, 9l L.ed.
1040, referred to.
(b) The National Tribunal was not justified in holding that if at a
future time an incumbent would draw wage in the time scale in ex.cess
of Rs. 500, the matter must be taken to be withdfawn from the jurisdiction
of the Central Government to make a reference in resvcct of him and
the National Tribunal to be ousted of the jurisdiction to decide the dispute
G
if referred. Sup!'f"isory stajf drawing less than Rs. 500 per month cannot
be debarred from claiming that they should draw more than Rs. 500
preseD.tly or at some future stage in their service.
They can only be
deprived of the benefits if they are non-workmen at the time they seek
the protection of Industrial Disputes Act. [43 C-D]
(c) The word 'supervise' and its derivatives are not words of precise
import and must often be construed in the light of the context, for unless
controlled they cover simple oversight and direction of manual work of
H
others.
It is, therefore necessary to see the full context in which the
words occur and the words of our own Act are the surest guide. Viewed
in thi& manner one should nOt overlook1 the import of the word "such"
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EMPLOYEES V. RESERVE BANK
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which expressly links the exception to the main part. Unless this was
done it would have been possible to argue that cl. (iV) indicated something, which, though not included in the main part, ought not by construction ·to be so included. By keeping the link it is clear that what is excluded
is something which is already a part of the main provision. [43 F-G]
(d) Ins. 2(k) the word 'person' bas not been limited to 'workmen' "'
such and must, therefore, receive a more general meaning. But it does
not mean any person unconnected with the disputants in relation to v.-hom
the dispute is not of the kind described, It could not have been intended
that although the dispute does not concern them in the least, workmen
are entitled to fight it out on behalf of non-workmen. [44 D-E]
Dimakuchi Tea Estate's case, [1958]2 L.LJ. 500 referred to.
If the dispute is regarding employment, non-<:mployment, terms of
employment or conditions of labour of non-workmen in which workmen are
themselves vitally interested, the workmen may be able to raise an industrial dispute.
Workmen can, for example, raise a dispute that a class
of employees not within the definition of "workmen' should be recruited
by promotion from workmen.
When they do so the workmen raise a
dispute about the terms of their own enzploymen.t though incidentally the
'&erms of employment of those who are not workmen is involved. But
workmen cannot take up a dispute in re-spect of a class of employees who
arc not workmen and in whose terms of employment those workmen have
no direct interest of thrir own. What direct interest suffices is a question
of fact but it must be a real and positive interest and not fanciful or
remote. [44H]
In the present case the National Tribunal was in error in not considering the claims of Class TI employees whether at the instance of merribcra
drawing less than Rs. 500 as wages or at the instance of those lower do\vn
in the scale of employment. The National Tribunal was also in error in
thinking that scales of wages in excess of Rs. 500 per month at any stage
were not within the jurisdiction of the Tribunal or that Government could
not make a reference in such a contingency. r45 C-D]
( e) Duties such as distribution of work, deteotion of faults reporting
for penalty, making arrangements for filling vacancies are supervisory.
Class II staff performing such duties could nC>t be said to perform only
clerical or checking duties. [46 D-E]
Ford Motor Company of India v. Ford Motors Staff Union, [1953]2
L.L.J. 444 and Llyods Bank Ltd. v. Panna!al Gupta, [1961]1 L.L.J. 18, referred to.
(ii) (a) Minimum wage is the lowes1 wage in the scale below which tho
efficiency of the worker is likely to be impaired. It allows for living at a
•tandard con&idered socially, medically, and ethically to be the acceptable
minimum. [47 C-D]
Fair wage by comparison is more generous and involves a rate sufficiently high to pr<YYide a standard family with food, shelter, clothing,
medical care and education of children appropriate to the worker's station
in life but not at a rate exceeding the wage earning capacity of the class
of establishment concerned. [47F]
The living wage concept is one or more steps higher then fair wage.
H
It has now been generally accepted that living wage means that every
male earner should be able to provide f(}r his family not only the essentials
but a fair measur-e of frugal comfort and an ability to provide for old age.
or evil days. [48AJ
LlSup.Cl/65-3
..
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SUPREME COURT REPORTS
[1966] l S.C·R.
It may be taken that our political aim is 'living wage' though in actual
A
practice living wage has been an ideal which has eluded our efforts like
an ever-receding horizon and will so remain for sometime to come.
Our
general wage structure has at best reached the lower levels of fair
wage. [48DJ
Standard Vaccum Refining Co. v. Its Workmen, [1961]1 L.L.J. 227,
.referred to.
(b) There can be no doubt that in our march towards a truly fair
wage in the first instance and ultimately the living wage we must first
achieve the need~based minimum.
In detennining family budgets so as
to discover the \Yorker's normal needs \vhich the minimum wage regulations
ought to satisfy the size of the standard family is very necessary to fix. One
method is to take Simple statistical average of the family size and another
is to take into account some other factors such as the frequency of variations in frunily sizes in certain region and employments, the number of
\Vage earners available at different &tages, and the increase or decrease
in consumption at diJT erent stages in employment, that is, the age structure and
i~ bearing on consmnption.
The plain averages Jaid down in
the Resolution may have to be weighted in different regions and in
different industries and reduc-od in others. [52 F-H]
Crotvn Alu1ninht11z Works v. Workn1e11, [1958]1 L.L.J. 1, referred
to.
(c) Although the 3 consumption units formula is if anything on the
low· side the National Tribunal could not be said to be wrong, in the
present circumstances,
in accepting 2.25 consumption units.
But by
graduated increase the consumption units. must be raised to 3 v.•ithin five
years of service. [52F; 53Cl
(d) The Tripartite Conference of 1957 was a very representative body.
There must be attached proper value to its Resolution on wage policy.
The Resolution was passed on to indicate a first step towards achieving
the living wage.
Unfortunately, we are constantly finding that basic
\\'age, instead of moving to subsistence plus level, tends to sag to poverty
level when there is a rise in prices. To overcome this tendency our wage
structure has for a long time been composed of two items (a) the basic
wage, and (b) a dearness. allowance which is altered to neutralise, if not
entirely, at least the greater part of the increased C09t of living. This
docs not solve the problem cf real wage.
At the same time, we haYe
to beware that too sharp an upward movement of basic wage is likely
to affect the cost of production and lead to fall in our exports and to the
raising of prices all-round. There is a vicious circle which can be broken
by increased production and not by increasing wages.
What we need
is the introduction of production bonus, increased fringe benefits free
medical, educational and insurance facilities.
As a counterpart t~ this
capital must also be prepared to forego a part of its re'lum. There i~
much to be ~aid for considering the need-base formula in all its implicallons for 1t IS bound to be our first step toward• living wage
As in
many other matters relating to industrial disputes the problem may,' perhaps,
be best tackled by. agreement between Capital and Labour in an establishment where a begmnmg can be safely made in this direction. [54 E-Hl
East Asiatic Co. v. Workmen, [1962]2 L.L.J. 610 referred to.
(e) Without further data it is difficult to determine what coefficient
should be applied to the working class wage for the purpose of determming the need-ba<.ed minimum wage of clerieal staff.
When fresh anol
wmprehen.sive enquiries are conducted,
tl~e results would show whether
the coefficient should go up or down.
With the rise of wages to higher
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EMPLOYEES v. RESERVE BANK ( Hidayatullah, ]. )
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A
le'Yels among the working class the differential is bound to be lower and
thi• is a matter for inquiry. Till then there is no alternative but to
adliere to the coefficient already established. [56 F-G]
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(iii) Seniority and merit should ordinarily both have a part in prom<>-
tio;, to higher ranks and should temper each other. The National Tribtmal
was right in thinking that there was little scope for giving directions to
the Bank in this regard. [57 F-G]
(iv) Gratuity is not a gift but is earned and for feiture eornept to
recoup a loss occasioned to the establishment is not justified. [58F)
Express Newspaper (P) Ltd. & Anr. v. Union of India, [1961) 1 LL.I.
339, Garment Cleaning Works v. Its Workmen, [1962)1 S.C.R. 711, Greaves
Cotton Co. Ltd. & Anr. v. Their Workmen, [1964)1
L.L.J.
342 and
Burhanpur Tapti Mills Ltd. v. Burhanpur Taptl Mills Mazdoor Sangh,
A.LR. 1965 S.C.. 839, referred to.
(v) The Tribunal rightly declined to accept the demand that the Association and the Union should be allowed 'lo participate and represent workers in disputes between individual workmen and the Reserve Bank. This
would make internal administration impossible. [60B]
(vi) In making its award operate from January 1, 1962 and rejecting
the appellants' demand that it should come into force from November 1,.
1957 or at leai;t from March 21, 1960, the National Tribunal did not
act unreasonably. Ordinarily an award comes into operation from the time
stated in sub-3. (1 ) of s. 17 A of the Industrial Disputes Act.. 1.e. on the
expiry of thirty days from the date of its pnblication. The Tribunal however is given power to make it applicable from another date, and it could'
not be said that in the present case the discretion had not been exercised'
on judicial principles. [63 A-Bl
Upton>'s case, [1959)1 L.L.J 431, Remington Rand's [1962)1 L.L.J. 287,
Rajkamal Kalamnndir (P) Ltd. v. Indian Motion Picture Employees' Union
& Or», [1963]1 L.L.J. 318, Western India Match Co. Ltd. v. Their Workmen, [196212 L.L.J. 459, Wenger & Co. and Ors. v. Their Workmen, [1963)2
L.L.J. 403 and Hindustan Times Ltd. v. Their Workmen, [1964]1 S.C.R.
234, referred to.
Appeal by special leave from the award dated September 8,
I 962 of the National Industrial Tribunal (Bank Disputes) at Bombay in Reference No. 2 of 1960.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4 of
1965.
A. S. R. Chari, D.S. Nargolkar, K. Rajendra Cha11dh11ry and
K. R. Chaudhuri, for the appellants.
N. A. Palkhivala. N. V. Phadke and R. H. Dhebar, for respondent No. 1.
A tiqur Rehman and K. L. Hat hi, for respondent No. 2 .
The Judgment of the Court was delivered by
Hidayatullah, J.
This is an appeal by special leave from the
Award of the National Industrial Tribunal (Bank Disputes)°
Bombay, in a dispute between the Reserve Bank of India and its
30
SUPREMB COURT REPORTS
[1966] l S.C.R.
workmc:1. Jdi vcred on September 8, 1962 and published in the
A
Gazette of lt;tiia (Extraordinary) of September 29, 1962. Th·~
appellants are the AH India Reserve Bank Employees' A~socia
tion, Bombay (s:iortly the Association) representing CIJss JI and
Class Ill staff and the All India R~"Scrvc Bank "D'' Cla\s Employees' Union, Kanpur (i,hortly the Union) representing Cia's
IV »ta!I, of the Reserve Bank.
B
By notification No. S.0. 704 dated the 21st March 1960, the
untral Government, in exercise of its powers under s. 7B of
the Industrial Disputes Act, 1947, constituted a J',;ational lndu'-
trial Tribunal with Mr. Justice K. T. Desai (later Chief Justice of
the Gujarat High Court) as the Presiding Officer.
By an order c
notified under No. S.O. 707 of the same date, Central Government.
in the exercise of the powers conferred by sub-s. (IA) of s. 10 of
the Industrial Disputes Act, referred an industrial dis~·Ute, which,
in its opinion, existed between the Re,erve Bm1k and its workmen
of the three classes above-mentioned.
The Order of Rcfeoencc
specified the beads of dispute in two schedules, the first in respect
D
of Class II and Class Ill stall and the second in rcsricct of Cla~s
IV staff. 111e first Schedule consisted of 22 items and the second
of 23 items.
These items (a considerable number of whkh are
common to the two schedules) hear upon the scales of
pay nnd dearness and other
allow~nces am! sundry mat·
ters
connected
with
the
conditions
of
service
of
th,:
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three cbsses.
The reference was registered as Reference No. 2
of 1960.
During the trial of the Reference the Association and
the Union severally made applications for intcr:m relief a'king
for 25 % of the total emoluments to Class IV employees with a
minimum of Rs. 25 and for 25% of the basic pay to the employees of the two higher classes, with effect from July 1959, but F
this was refused by an interim Award dated December 29, 1960.
The final Award was delivered on September 8, 1962 bec:mse in
the meantime the Tribunal dealt with another reference re[!istered
as Reference No. I of 1960 in a dispute involving 84 banking cOJ11p~nies and Corporations and their workmen in respect of creation
of categorie9 of banks and areas for purposes of adjudication and of
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scales of pay, diverse allowances and other conditions of service.
The Award in that Reference was delivered on June 7, 1962. The
Tribunal was next occupied with the resolution of yet ano:hcr
dispute over bonus between 73 banking companies and their workmen which was registered as Reference No. 3 of 1960 and which
was concluded by an award on July 21. 1962. We shall have oecaH
sion to refer to these awards later.
We may now give the facts of
Ike dispute in the Reference from which this appeal arises.
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EMPLOYEES v. RESERVE BANK (Hidayatullah, /.)
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The Reserve Banlc was established on April l, 1935 as a
shareholders' Banlc with a capital of Rs. 5 crores which was mainly
subscribed by the public.
It was taken over in 1948 by the
Government of India, when, under the Reserve Banlc (Transfer
to Public Ownership) Act, 1948, the shares were compulsorily
acquired by Government at a premium of Rs. 18.62 over and above
the face value of the share of Rs. 100.
Thereafter the Reserve
Bank is administered by a Central Board of Directors nominated
by the Central Government from the civil services and public
men.
There are four local Boards to advise the Central Board
and to function as its delegates.
The Head Office of the Reserve
Bank is situated at Bombay with branches at Calcutta, New Delhi,
Kanpur, Madras, Bangalore, Nagpur, Lucknow, Hyderabad,
Gauhati, Trivandrum, Patna, Ahmedabad, Ludhiana, Jaipur and
Indore.
The Reserve Bank acts as Banlc to the Central and State
Governments and Commercial Banks and controls the issue and
circulation of currency. It has special duties to perform under
the Banking Companies Act 1949 and supervises and controls the
banking industry in India. It regulates and controls foreign
exchange and exchange of currency and remittances to and from
India.
It is hardly necessary to refer to its multifarious duties and
functions as the Central Bank and as the bankers' bank.
The Reserve Bank employs four classes of employees of which
the three lower classes are before this Court, the first class being of
officers.
At the material time the total number of employees of all
description was about 9,500 of which 3,300 were in the Head Office,
1,800, 1,100 and 1,100 respectively at Calcutta, New Delhi and
Madras and the rest were distributed in varying numbers among
the remaining twelve branches.
The present dispute has a long
history into the details of which it is hardly necessary to go but
as both sides have made reference to it, some of the leading events
connected with bank disputes in general, and the present dispute
respecting the Reserve Banlc, in particular, may be mentioned.
As is well-known there has been a rise in the price of commodities since 1939 and workmen earning wages and persons in the
fixed income groups are specially affected.
Between the years
1946 and 1949 there were set up numerous Commissions and Tril>unals to deal with disputes between the commercial banks and
their employees.
In 1946 strike notices were served on many
banks in Bombay, Bengal and the United Provinces.
Jn Bombay
Mr. H. V. Divatia dealt with a dispute between the Banlc of India
and its employees, happily settled by consent (August 15, 1946)
and again with a dispute between 30 named Banks in Bombay and
\
32
SUPRBMB COURT REPORTS
[1966] I S.C.R.
their employees.
The Award was given on April 9, 1947. That
award was extended to Ahmedabad Bank employees by another
award published on April 22, 1948.
Conciliation procccdmgs
were conducted by Mr. R. Gupta between the Imperial Bank of
India and its employees in Bengal which concluded on August 4.
1947.
Other awards and adjudications were made by Mr. S. C.
Chakravarti and Mr. S. K. Sen.
In the United Provinces first
Mr. B. B. Singh, Labour Commissioner, began arbitration in dL,.
putes between as many as 40 banks and their employees, which later
wen& before Conciliation Boards headed first by Mr. Nimbkar. and
A
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on his death, by Mr. Bind Basni Prasad and the rccommcudatiom
were made effective by a Government order. On the representation c
of the Banks an Ordinance was promulgated (followed by an Act)
and the Central Government took over the resolution oi disp•1te'
between banks and their employees in all cases where the hanks
had offices in more than one province.
On June 13, 1949 the
Central Government appointed an All India Industrial Tribunal
<Bank Disputes) with Mr. K. C. Sen and 2 members to codify the
D
terms and conditions of service of bank employees.
The Sen
Award (as it is known) was published on August 12, 1950 hut on
appeal this Court on April 9, 1951 declared it to be void a~ therl'
was a flaw in the composition of the Tribunal.
As a re.•ult of thi'
contingency a stand-still Act was pass~d and another Tribunal with
Mr. H. V. Divatia and 2 members was erected.
This Tribunal did
not conclude the work and resigned and in 1952 another Tribunal
presided over by Mr. S. Panchapagesa Sastry was appointed which
published its award in April 1953. That Award was subjected
F
to an appeal before the Labour Appellate Tribunal and it was
much modified.
Some banks represented to Government their inability to implement the modified award and the Central Govern·
F
ment intervened and modified the award of the Labour Appellate
Tribunal by an order dated August 24, 1954.
We mav leave this
general narration at thLs stage to view the di,putes b~tween the
Reserve Bank of India and its employees during the same period
In 1946 the Association delivered a charter of demand<; for
revision of pay scales and allowances of the employees of the
c;
Reserve Bank from April I, 1946 and after negotiations some revision in wages and dearness allowances was effected.
During the
interval between this revision and the appointment of th·~ s7istry
Tribunal other revisions took place.
When the Sastry Tribunal
gave its award in March 1953, the Association in May of tt.c same
year delivered a revised charter of demands to the Reserve Bank
II
but owing to the pendency of the Appeal before the Labour Appel·
late Tribunal, the demand could not be considered.
The Reservl'
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Bank, however, assured its employees that after the decision of
th.e Labour Appellate Tribunal was known, the entire question
would be reviewed.
When the Labour Appellate Tribunal gave
its decision in April 1954, the Association served a fresh charter
of demands on May l 8, 1954 but the decision of the Appellate
Tribunal was modified by Government and on September 17, 1954
a commission presided over by Mr. Justice Rajadhykshya and late1
by Mr. Justice Gajendragadkar (as he then was) was constituted to
consider whether the Appellate Tribunal's decision should be restored or continued with modifications and to suggest further modifications having due regard to the overall condition of banks in general
and individual banks in particular.
In October 1954 the Association, realising tl1at delay was inevitable, agreed to accept the scalel•
cf pay on the basis of the modified Labour Appellate Tribunal's
decision though the employees obtained by the agreement something more than their counterparts in the higher class commercial
banks under the order of Govermnent which modified the decision
of the Labour Appellate Tribunal.
The advantage to the Reserve
Bapk employees was neutralized when the Bank Award Cornmission restored the decision of the Labour Appellate Tribunal in respect of the Commercial Banks.
The agreement lasted till October
31, 1957 and the Reserve Bank employees honoured it.
On July 11, 1959, the Association submitted a fresh charter
of demands asking for a complete revision of the pay structure and
invoked the norms settled at the Fifteenth Indian Labour Conference and asked for iml'.)rovement generally in the conditions of
service.
As the Reserve Bank was not agreeable to negotiate, the
Association called upon the Reserve Bank to ratify the Code of
Conduct evolved at the Sixteenth Indian Labour Conference anc!
to proceed to arbitration but the Reserve Bank declin~<l. The
Association called upon the Reserve Bank to ratify the Code of
work from March 25, 1960. Before this happened the All India
State Bank of India Staff Federation had given a notice and there
was a strike from March 4, 1960 and on March I 9 all bank
employees struck work in support and the several references to
which we have referred followed.
The Reserve Bank during the years between 1946 and 1960
undertook from time to time revision of salaries and allowances.
In 194 7 and 1948 dearness allowances were revised and in 1948
there was a general revision of scales of pay as from Aprill, 1948 .
These revisions were made at the demand of the Association. In
1951 ad hoc increases in dearness allowances were made and compensatory allowances were introduced and from 1951 local allowances were paid to certain classes of employees serving at some of
34
SUPRB:ME
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[1966] I S.C.R.
the important offices of the Reserve Bank and subs~quently the
scheme of local allowances was extended 10 a kw other branches.
In 1954 local allowances were converted into local pay and 25%
of the dearness allowances was treated as pay for calculation of
retiring benefits etc.
In 1957 family allowances to class IV employees were raised and in 1958 aJOd 1959 d~arness allowanc~
were again slightly raise<l.
These increa.ses, though welcome to
them, hardly satisfied the demands of the employees. There were
many conciliation confcreilces but none w:1< succc"ful.
The cost
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of living index with b:t"c year I 949c-c I 00 had increased by 26
points in February 1960 and the principl:s of minimum and fair
wages were deliberated upon and advcrt,·d to in ti~c Report of the
15th Indian Labour Conference.
Th:;e princirk>. hl which detailC
cd reference will be made presen!ly, were desired by the employees
of the Reserve Bank to be put into o~rn:ion. 1\s a result the gap
between the demands of the employees and the olTers of the Reserve
Bank, which was wide already. became wid~r still and conciliation
which had always succoeded in the pa>!, was not po>sible.
The D
Associa1ion suggested arbitration but lhc
Rcserv~ Bank by its
letter daled February I I. 1960. did not agree.
Ti1e Reserve Bank
>talcd that it did not wbll 10 gel ·'seriously out of step"' with Government or the Commercial Banks.
The Reserve Bank referred to
the Pay Commission Report and pointed out that the demand~ of
the employees took no notice of the slate of Indian ewnomv. The E
Association, through iis Secrntary. in
!c~1ly ( F~b. 22. 1960)
observed :
"'Your criticism. that the Association's Charter of
Demand has been pitched so high as to exclude all scope
for satisfactory solution through negotiations we may
point out, is baseless and incorrect, as the Charter has
been based on the norms set up by the l Slh Tripartite
Labour Conference at Nainital where the need-based
wa~e formula for Indian worker was evolved, and the
coefficient for conversion to arrive at the minimum wage
for a middle class salaried employee has been accepted
from the Rajadhyaksha Report ...... ".
The Association also pointed out that it had been conceded hy the
Governors of the Reserve Bank in the past that the emoluments of
the
Reserve
Bank
employcc.s
ought
to
be
higher than
those of other Bank employees and, therefore, the recommendations of the Pay Commission were irrelevant.
In this appeal one
of the fundamental points argued is whether the National Tribunal
was right in rejecting the demand for the inauguration of the needG
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base formula.
It was, however, in this background that the
National Industrial Tribunal was constituted and the whole of
the dispute was referred to it.
This Reference embraced as many as 22 items in respect of
Class II and Class III employees and 23 items in respect of Class
IV employees.
Some of these were decided in favour and some
against the employees.
Not much purpose would be served if
we mentioned the many points of controversy or the decision on
them, for in this appeal, the employees have stated their case with
commendable restraint and Mr. Chari, though he argued it with his
customary earnestness and ability, did so appreciating the realities
of our national economy.
He paid (it may be noted) sincere
tributes to the Reserve Bank for its helpful attitude at all times, and
expressed regret that there was no conciliation as on previous occasions.
Mr. Palkhivala too, on behalf of the Reserve Bank, showed
an awareness of the point of view of the employees and on some
of the less important points, as we shall show later, agreed to consider the matter favourably.
The dispute now centres round two fundamental or major
points and a few others not so fundan1ental.
We shall deal with
the main points first and then deal w!th the others.
The first major
point concerns employees of Class IL
This class of employees
was in the scales of pay which were settled by the agreement of
November 2, 1954.
These were :
1. Research
Superintendents
2. Superintendents and
SubAccountants
3. Deputy Treasurers (Bombay
and Calcutta)
4. Deputy Treasurer (Gauhati)
S. Assistant Treasurers
6. Personal Assistant to the
Governor
7. Personal Assistant
8. Caretakers. Grade I (Bombay and Calcutta)
'
9. Staff A.ssistant5
10. Supervisor, Premises Section
11. Deputy Treasurer (Hyderabad)
Rs. 301l--25-401l--E.B.-25-6SO.
Rs. 275-25-375-E.B.-25-50025- 650.
Rs. 450-25-650.
Rs. 375-25-550.
Rs. 330-25-450.
Rs. 321'~30-650.
Rs. 325-25-550.
Rs. 275-10-325-E.B.-12l:-
400.
Rs. 250-25-450-E.B.-25650.
Rs. 250-15-310-E.B.-20650.
Rs. 350-25-500.
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SUPllEME COURT
REPORIS
tl966J I S.C.R
There was in addition local pay for these employees equal to 10%
of pay, at Bombay, Calcutta, Ahmedabad, New Delhi, Madras and
Kanpur.
There was also a family allowance of Rs. I 0 per child
subject to a maximum of Rs. 30 for employees drawing le<s than
Rs. 550 per month with ~ completed service of 5 years.
The National Tribunal in considering the dem:m<ls of Class 11
staff of the Re;erve Bank came to the conclusion that it could not
give any award regarding these employees who were employed in a
superviwry capacity.
In this connection the Re,et vc Bank had
pleaded :hat the Reference concerned only those employees who
came within the definition of "workman" in the Industrial Disputes
Act, 1947, as amended by the amending Act of 1956, and the
Reserve Bank had contended that it was futile to fix a time scale
for Class II staff because every incumbent in it w:h cm~!,1ycd in a
supervisory capacity and under the existing scales of pay every
incumbent at a local pa,)' centre would draw wages in excess of
Rs. 500 after three years' service and every other incumbent at
the end of 5 years' service and that most of the employees in that
class had entered it by promotion and even at their entry were
drawing wages in exce~s of Rs. 500.
The Rese1•·c Rank had
funher contended that a dispute could only be rahed before the
National Tribunal provided a workman continued to be a workman
as defined .. If the National Tribunal was asked to provide a scale of
payment which would make the workman cease to be workman by
reason of the award, the Reserve Bank e<'ntended, the National
Tribunal had no jurisdiction to make such an award anti the Reference itself would become incompetent.
The relation.ship of employer and workman, so it was contended, must exist (a) at the
time of dispute, (b) at the time of the award, and (c) during the
currency of the award, otherwise the Reference and the consequent
award would he without jurisdiction.
The Associ:uion had contended in reply (a; it docs in t11i.s
appeal) that the duties performed by these employees were not
of a supervisory nature and further that they were doing .111pervisory work and were not employed in a supervisory capaci1y. In
Reference No. 1 of 1960, Mr. Sule, on behalf of the employees, had
contended (a) that workmen could raise an industrial dispute for
themselves and for a section of them at any level, (b) that per.;ons
who were workmen could raise an industrial dhpute regarding
their conditions of service not only at sta~cs '·'·hen they would be
workmen but also at stages when they would cease to be workmen
under the same employe•, and ( c) that workmen could raise a
dispute on behalf of non-workmen in the .same estahlishmo:lt proA '
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vided they had a direct and substantial interest in the dispute and
bad a community of interest with such non'workmen.
The National Tribunal in the present award adopted its discussion of the question in paragraphs 5.206 to 5.219 of the award in
Reference No. 1 of 1960.
It pointed out that the demand by
Class II Supervisory Staff envisaged a scale commencing at Rs. 500
and that if the demand were considered favourably everyone in tliat
class would cease to be a workman and such an award was beyond
its jurisdiction to make.
The National Tribunal held that even
though by reason of community of interest other workmen might
be entitled, having regard to the definition of "industrial dispute",
to raise a dispute on behalf of others, they could not raise a dispute
either for themselves or on behalf of others, when the dispute
would involve consideration of matters in relation to non-workmen.
The National Tribunal also held that it would even be beyond the
jurisdiction of Central Government to refer such a dispute under
the Industrial Disputes Act.
The National Tribunal, therefore.
held that the expression "scales of pay and methods of adjustment
in the scales of pay" in Schedule I of the present Reference conld
not cover non-workmen such as supervisory staff in Class II. Those
employed in supervisory capacity and drawing more than Rs. 500
p.m. were treated as not present before the National Tribunal and
ll.i they could not be heard the National Tribunal found it inexpedient to fix scales of salary affecting them. As regards those employed in the same capacity but drawing less than Rs. 500 per
month but on scales carrying them beyond that mark, the National
Tribunal thought that if all that it could do was to fix a scale up to
Rs. 500, it would be unfair to lower the scale already fixed. The
National Tribunal thus made no award in regard to supervisory staff
in Class II.
Before we consider the case of the appellant' an event which
happened later may be mentioned. The Reserve Bank by a Resolution (No. 8) passed at their 1456th weekly ineeting held on April
24, 1963, increased the scale of pay, dearness allowances, house
rent allowances etc. for Class II staff with effe.ct from January 1,
1962, that is to say, the date from which the impugned award
came into force.
Under. the Resolution scales of pay, which were
acknowledged by Mr. Chari, to be as generous as the present circumstances of our country permit, have been awarded.
But more
than this the minimum total emoluments as envisaged by the definition of wages, even at the commencement of service of each and
every member of Class II staff on January I, 1962 now exceed
Rs. 500 per month.
This, of course, was done with a view to with-
:<8
SUPREME COURT
REPORTS
[ 1966) l S.C.R.
drawing the whole class from the ambit of the Reference, because,
A
it is supposed, no member of the class can now come within the
definition of "workman". We shall, of course, decide the question
whether the Resolution has that effect.
If it does, it certainly
relieves us of the task of considering scales of pay for these employee& for no remit is now possible as no National Tribunal is
.,i1ting.
The scales having been accepted as generous, the dispute
regarding scales of pay for Class II employees under the Reference,
really ceases to be a live issue.
B
However, in view of the impo11ance of the subject and the
rossibility of a recurrence of such question in other spheres, and
the remarks of the National Tribunal as to jurisdiction of the
Central Government and itself we have considered it necessary to
go into some of the points mooted bcforo us.
Before we deal with
them we shall read some of the pertinent definitions from tho Industrial Disputes Act, 1947 :
"2.