# BARODA v. THE GUJARAT ELECTRICITY BOARD, BARODA

- **Citation:** [1969] 3 S.C.R. 174
- **Court:** Supreme Court of India
- **Decided:** 1968-12-19
- **Bench:** J. M. Shelat, V. Bhargava, Vaidialingam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/baroda-v-the-gujarat-electricity-board-baroda-4850
- **Pages:** 11

## Headnote

. Industrial dispute-Capacity of employer to pay increased remuner,,.
t1on relevant. if demands for more than
mJnimum wagea-Comparisons
lt'ith remuneration paid by other employers---When relevant-Public tee·
tor undertaking to produce and supply electricity and prepare and evecute
development schemes for supply to new areas-If profits to be oolculated
taking account of all its activities or only commercial activities.
Over 9,000 employees of the Respondent Board, represented by seven
Unions, demanded an increase in the dearness allowance payable to them,
the payment of gratuity to some employees, and
the
calculation
of
pension payable to other employees after adding 50% of the . dearness
allowance. Six of the Unions
representing the
employees
amicably
settled the disputes with the Board which granted increases in dearness
allowance on the other demands being given up. The seventh
Union
declined to accept the settlement and the dispute was eventually referred
for adjudication by the Industrial Tribunal. Before the Tribunal took
up the reference, all except 466 of the employees individually accepted
the settlement.
At the hearing of the reference it was contended by the remaining
omployees through the seventh Union that the total wage packet including
the dearness allowance claimed , by them would only satisfy the requirement of a minimum wage and the Board's capacity to pay the increases
demanded was, therefore, irrelevant; furthermore, although
the
Board
'va:'l. an industry in the public sector, it must also be made to pay wages
on the same basis as private sector employers; two electric supply companies in the area were paying wages, which were much higher and there
was no justification for refusing the demand for additional dearness allowance which would place the employees of the Board on par with the
employees of those companies.
The Tribunal in its award rejected all the workmen's demands. It
found that the demand for increased dearness allowance was not confined
to achieving a minimum wage but as 6 result of its acceptance the wages
would he above the minimum wage.
The Tribunal also found that the
Board having inherited an accumulated deficit of over Rs. 2 crores from
its predecessor, the Bombay State
Electricity Board, having
sustained
heavy losses in its \vorking and having undertaken a further liability to
pay increased dearness allowance, it had no capacity to undertake
the
further burden of paying about Rs. 49 lakhs per year as increased dearness allowance or to meet the other demands. The Tribunal held that the
position in the other two electric supply companies was not comparable
\Vith the Board.
In appeal to this Court against the award it was contended inter alia,
that the Tribunal was wron~ in judl!ing the capacity of the Board after
takin~ into account the deficit of Rs. 2 crores which it had inherited
from its predecessor; and that the financial capacity of the Board should
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WORKMEN v. GUJARAT ELECTY. BOARD
175
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have been judged only on the basis of its commercial undertakiiig ex·
eluding the activities of the Board which were in the nature of national
duties.
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HELD : The Tribunal had rightly rejected the
demands of
the
appellants.
(i) As the appellants had failed to show that they would not be
receiving the minimum .wage with their basic pay and the increased dearness allowance otfered by the Board, the financial capacity of the Boar<.'
for acceding to the demands made became a relevant consideration.
Hindustan Antibiotics Ltd. v. The Workmen & Otherr, (1967] I S.C.R.
652 and The Hindustan Tlmts Ltd, v. Their Workmen, (1964] I S.C.R.
234 referred to.
Although the deficit inherited by the Board
from its predecessor
could not be treated as o revenue loss for determining the Board's financial
capacity and was in the nature of a capital loss, even this loss could
not be completely ignored. Apart from this, it was clear on the facts
that during three years after its formation the Boa

## Text

WORKMEN OF GUJARAT ELECl'RICITY BOARD,
A
BARODA
v.
THE GUJARAT ELECTRICITY BOARD, BARODA
December 19, 1968
[J. M. SHELAT, V. BHARGAVA AND C. A, VAIDIALINGAM, JJ,]
. Industrial dispute-Capacity of employer to pay increased remuner,,.
t1on relevant. if demands for more than
mJnimum wagea-Comparisons
lt'ith remuneration paid by other employers---When relevant-Public tee·
tor undertaking to produce and supply electricity and prepare and evecute
development schemes for supply to new areas-If profits to be oolculated
taking account of all its activities or only commercial activities.
Over 9,000 employees of the Respondent Board, represented by seven
Unions, demanded an increase in the dearness allowance payable to them,
the payment of gratuity to some employees, and
the
calculation
of
pension payable to other employees after adding 50% of the . dearness
allowance. Six of the Unions
representing the
employees
amicably
settled the disputes with the Board which granted increases in dearness
allowance on the other demands being given up. The seventh
Union
declined to accept the settlement and the dispute was eventually referred
for adjudication by the Industrial Tribunal. Before the Tribunal took
up the reference, all except 466 of the employees individually accepted
the settlement.
At the hearing of the reference it was contended by the remaining
omployees through the seventh Union that the total wage packet including
the dearness allowance claimed , by them would only satisfy the requirement of a minimum wage and the Board's capacity to pay the increases
demanded was, therefore, irrelevant; furthermore, although
the
Board
'va:'l. an industry in the public sector, it must also be made to pay wages
on the same basis as private sector employers; two electric supply companies in the area were paying wages, which were much higher and there
was no justification for refusing the demand for additional dearness allowance which would place the employees of the Board on par with the
employees of those companies.
The Tribunal in its award rejected all the workmen's demands. It
found that the demand for increased dearness allowance was not confined
to achieving a minimum wage but as 6 result of its acceptance the wages
would he above the minimum wage.
The Tribunal also found that the
Board having inherited an accumulated deficit of over Rs. 2 crores from
its predecessor, the Bombay State
Electricity Board, having
sustained
heavy losses in its \vorking and having undertaken a further liability to
pay increased dearness allowance, it had no capacity to undertake
the
further burden of paying about Rs. 49 lakhs per year as increased dearness allowance or to meet the other demands. The Tribunal held that the
position in the other two electric supply companies was not comparable
\Vith the Board.
In appeal to this Court against the award it was contended inter alia,
that the Tribunal was wron~ in judl!ing the capacity of the Board after
takin~ into account the deficit of Rs. 2 crores which it had inherited
from its predecessor; and that the financial capacity of the Board should
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WORKMEN v. GUJARAT ELECTY. BOARD
175
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have been judged only on the basis of its commercial undertakiiig ex·
eluding the activities of the Board which were in the nature of national
duties.
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HELD : The Tribunal had rightly rejected the
demands of
the
appellants.
(i) As the appellants had failed to show that they would not be
receiving the minimum .wage with their basic pay and the increased dearness allowance otfered by the Board, the financial capacity of the Boar<.'
for acceding to the demands made became a relevant consideration.
Hindustan Antibiotics Ltd. v. The Workmen & Otherr, (1967] I S.C.R.
652 and The Hindustan Tlmts Ltd, v. Their Workmen, (1964] I S.C.R.
234 referred to.
Although the deficit inherited by the Board
from its predecessor
could not be treated as o revenue loss for determining the Board's financial
capacity and was in the nature of a capital loss, even this loss could
not be completely ignored. Apart from this, it was clear on the facts
that during three years after its formation the Board had incurred heavy
losses of about Rs. 110 !aldu and it did not, therefore, have the capacity
of bearing the additional financial burden invoked in meeting the appellants' demands. (179 D-F; 180 E]
(ii) When the Board was constituted under the Electricity (Supply)
Act No. 54 of 1948 and was, by its constitution, charged with the
general duty of promoting the co-ordinated development of the
generation, supply and distribution of electricity within the State, its capacity
to bear the burden· of paying 'l'ages to its employees had to be worked
out after taking into account all the activities which the statute required
it to carry on. The running of power houses
was only one of the
branches o( these activities. The profit that the Board earned could only
be worked out after including in the accounts all the expenditure incurred
by it on all its development and other schemes for distribution of electricity to consumers in urban and rural areas. [181 B--D]
While •n industry in the pubfic sector was not exempt from application of principles which apply to an industry in the private sector and
the respondent Board must also be made to pay wages on the same basis
as private sector employers the ad!iitional burden in
either sector for
paying anyt;liing above a minimum wage can only be justifiably imposed
in industrial adjudication if the employer had the capacity to meet that
burden. [181 B-F]
The Tribunal had rightly held that neither of the other two electric
companies were comparable with the Board.
These
two
companies
merely carried on the activity of direct supply of electricity to consumers
in the towns and cities whereas the functions of the Board included
the development and execution of schemes for supply of electricity to
new areas.
Wil/iamsons (TndiJ;') Privat• Ltd. v. Its
302, referred to.
Crvn. APPELLATE JURISDICTION :
Workmtn (1962]
L.L.J.
H· of 1966.
Civil Appeal No. 2431
~ppeal by special leave from the Award _of the Industrial
Tribunal, Gujarat in Reference (IT) No. 88 of 1962.
176
SUPREME COURT REPORTS
[1969] 3 S.C.R.
A. S. R. Chari, M. K. Ramamurthi, Shyamala Pappu, Vineet
A
Kumar, P. S. Khera and Bindra Thakur, for the appellants.
I. N. Shroff, for the respondent.
The J uclgment of the Court was delivered by
Bhargava, J. This appeal, by special leave, is directed against
an Award of the Industrial Tribunal, Gujarat, in an industrial
dispute referred to it by the Government of Gujarat at the instance of the appellants who are 466 workmen of the Gujarat
Electricity Board, Baroda (hereinafter referred to as "the Board")
represented by the Saurashtra Vidyut Kamdar Sangh (hereinafter
referred to as "the Sangh").
The dispute referred to related
to two matters. One was the demand made in respect . of rates
of dearness allowanc.e to be paid to the workmen. The second
demand was that those of the workmen, to whom Contributory
Prqvident Fund or Employees Provident Fund scheme was applicable, should be granted gratuity equal to 15 days wages for
every year of service in addition to the provident fund benefits,
while those workmen, who were entitled to pension according
to 14e pensionary scheme in force, should have their pension calculated after adding 50 per cent of the dearness allowance to
the basic pay.
The facts needed to explain the second demand may first be
stated. The supply of electricity in the State of Saurashtra, prior
to the year 1954, was being carried out departmentally by the
Government of Saurashtra and the workmen employed in the
· power houses were, consequently, Government servants.
On
1st July, 1954, a Saurashtra Electricity Board was constituted
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to run the power houses and the employees of the Electricity
Department of the Government were sent to work with the Sau- ·
rashtra Electrii:ity 'Board on deputation. On 1st November, 1956,
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Saurashtra became a part of the Bombay State, whereafter the
Saurashtra Electricity Board was dissolved with effect from 1st
April, 1957 and its assets, liabilities, .and employees were taken
over by the Bombay State Electricity Board.
The employees,
who were originally in the service of the Saurashtra State Government, were entitled to the pensionary scheme of the Saurashtra Government, while the Bombay State Electricity Board had
a Provident Fund Scheme.
The Saurashtra State Govennment
servants, on being taken over by the Bombay State Electricity
Board, were given the option of either continuing in their pensionary scheme, or of joining the Provident Fund Scheme of the
Born bay State Electricity Board in which case the gratuity already
accrued to them and the equivalent of pensionary benefits were crt;-
dited to their accounts. Some of the employees opted for the Provtdent Fund Scheme, while others continued under the pensionary
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WORKMEN v. GUJARAT ELECTY. BOARD (Bhargava; ].)
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scheme.
Thereafter, on 1st May, 1960, the State of Bombay
was bifurcated and a separate State of Gujarat was constituted;
and, with effect from the same date, the Board came into existence.
The Board 1ook over all the electrieity, p<Jwer-houses
and electricity schemes in the State of Gujarat from the Bombay State Electricity Board, including the workmen who are the
appella,nts in this appeal. The assets and liabilities of the Bombay State Electricity Board were divided between the Board, and
the Maharashtra Electricity Board which was constituted for the
State of Maharashtra which came into existence on bifurcation of
the Bombay State.
The Board continued both the Pensionary
Scheme as well as the Provident Fund Scheme for the employees
in the manner they were in foroe when the employees were working
under the' Bbmbay State Electricity Board. The employees, who
were oi:iginally servants of the State Government, had ceased to
be government servants with effect from lst April, 1957 and
later on 1st May 1960, became the employees of the Board,
so that they were no longer entitled to the rights which the State
Government might subsequently grant in respect of pension under
the rules applicable to the government servants. The result
was that even improvements granted in the pensionary sweme
by the State. Government to its employees did not enure to the
benefit of the appellants. In these circumstances, the Sangh put
forward the claim that the pension of employees, who were governed by the pensionary scheme, should be calculated not on
the basis of basic salary, but after adding 50 per ceint of the
dearness allowance to it. In respect of employees, who were
governed by the Provident Fund Scheme, a second benefit of
gratuity was claimed.
The demand for dearness allowance was that it should be
linked with the scale prescribed for the Ahmedabad Millowners'
Association.
The workmen demanded that employees, drawing
up to Rs. 50 as basic pay, should be given dearness allowance
at the scale applicable to Ahmedabad Millowners' Association,
those drawing between Rs. 50 to Rs. 100, D.A. at that scale plus
Rs. 5, and those drawing above Rs. 100, dearness allowance at
that scale plus Rs. 10.
This demand was put forward before
the Board originally on behalf of all the 9,208 employees of
Class III and Class IV and some employees of Class l and Class
II whose salary was below Rs. 300 per mensem, who were
working either in the Gujarat Region or the Saurashtra Region.
These employees were represented by seven different Unions, one
of which was the Sangh who represented about 3,000 employees
working in the Saurashtra region.
The six Unions representing
the employees working in the Gujarat region amicably settled
these disputes with the Board by enterin_g into agreements. The
178
SUPREME COURT REPORTS
[1969] 3 S.C.R.
Board gave some increase in dearness allowance retrospectively
with effect from 1st October, 1961, while the second demand
relating to gratuity and calculation of pension after adding 50
per cent of the dearness allowance was given up.
The Sangh
declined to accept this settlem~t, whereupon the Board offered
terms in accordance with the settlement to all the employees
in the Saurashtra region individually. Out of the total of 3,042
in the Saurashtra region, 622 signed General Standing Order 56,
under which the Board had made its offer to individual employees
on the basis of the settlements arrived at before the reference to
concililation.
1152 signed before the date of the failure report
by the Conciliation Officer; 2058 signed before the reference, and
518 signed after the reference.
Thus, the dispute, after the
reference, became confined to the remaining 466 employees. who
did not, on individual basis, accept the offer made by the Board.
The Tribunal considered this dispute relating to the dearness allowance raised by these employees through the Sangh as also
the other demand relating to gratuity and calculation of pension,
and, by the impugned Award, rejected these demands.
Conseo quently, the workmen have come up in this appeal through the
Sangh.
The main ground for rejecting these demands, on which the
Award is based, is that the Board does not have the capacity
to meet the additional expenditure that would have to be inc.urred if these demands are acceded to. Before the Tribunal, this
aspect of the case was sought to be met by the Sangh by urging
that the total wage packet, including the dearness allowance
claimed by them in the demand. would only satisfy the requirement of a minimum wage, so that the Board's capacity t9 pay
was irrelevant; but the award shows that the Sangh completely
failed to provide any material to prove that the total wage.q, including the dearness allowance as offered by the Board on the
basis of the settlements, are Jess than the minimum wage. This
Court, in
Hindustan Antibiotics Ltd.
v.
The Workmen &
Others (1), recognised the three concepts of minimum wage, fair
wage, and living wage by quoting the· following pasqage from
the decision in The Hindustan Times Ltd. v. Their Workmen( 2 )
and stating that it briefly and neatly defined the three concepts ·
"In trying to keep true to the two points of social
phil.olsophy and
economic necessities which
vie for
consideration, industrial adjudication has set to itself
certain standards in the matter of wage fixation.
At
the bottom of the ladder, there is the minimum basic
(I) 11957] I S.C.R. 652.
(2) [1964] 1 S.C.R. 234.
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WORKMEN v. GUJARAT ELECTY. BOARD (Bhargava, J.)
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wage wltlch the employer of any indu~trial la~ur must
pay in order to be allowed to continue an industry.
Above this is the fair wage,
which may roughly be
said to approximate to the need based minimum, in
the sense of a wage whicli is "adequate to cover the
normal needs of the average employee regarded as a
human being in a civilised society".
Above the fair
wage is the "living wage"-a wage 'which will maintain
the workman in the highest state of industrial efficiency,
which will enable him to provide bis family with all
the material things which are needed for their health and
physical we11-being, enough to enable him to qualify to
discharge his duties as a cit~'."
These decisions make it clear that, if the claim be for a minimum
wage, the employer must pay that wage in order to be al~owed
to continue the industry; and, in such a case, the capacity of
the industry to pay is irrelevant.
However, if the industry is
already paying the minimum wage, and the claim is for ,fair
wage or living wage, the capacity of the industry to pay IS a
very important factor, and the burden above the minimum wage
can only be justifiably imposed if the industry is capable of meet•
ing !Jiat extra burden.
On this principle, in the present case,
if the appellants had succeeded in showing that they were not
receiving even the minimum wage on the basis of the offer made
by the Board in line with the settlements arrived at with the
E
other Unions . and individual workmen members of the Sangh.
there would have been full justification for granting additional
dearness allowance, ignoring the inability of the Board to meet
that extra expenditure. The finding of the Tribunal, however,
is that the demand of the workmen is not confined to minimum
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wage, but that, as a result of the demand, the wages will be
above the minimum wage.
Learned counsel appearing for the
appellants before us did not try to contend that the wages which
were being paid by the Board, were lower than the minimum
wage. so that the claim for the additiOl!al dearness allowance
cannot be considered without taking into account the capacity
of the Board to meet the expenditure.
So far as the question of capacity of the Board to pay i~
conccmed, there is ·a clear finding by the Tribunal that the
Board is running at heavy losses, so that it is not in a position
t~ meet !he extra ~xpenditure of about Rs. 49 lakhs a year which
will be mvolved tf the dearness allowance is fixed as claimed
by the Sangh. The Tnbunal has found that the Board when
constituted on 1st May, 1960, inherited an accumulated deficit
of over Rs. 2 crores from the Bombay State Electricity Board.
In its own workin11. the Board sustained a loss of over Rs. 29
lakhs between 1st May, 1960 and 31st March, 1961, and in
180
SUPREME COURT REPORTS
[1969] 3 S.C.R.
the two succeeding years 1961-62 and 1962-63, the losses incurred were in the region of Rs. 39 lakhs and Rs. 41 lakhs. The
Tribunal, thus, held that the total loss was to the tune of Rs. 31
millions; and since the Board had undertaken a further liability
of over Rs. 6. 75 lakhs a year under the settlements and the
offer to individual workmen, it could not posibly undertake the
further burden of paying about Rs. 49 lakhs per year as increased dearness allowance.
The Tribunal was also of the opinion that, considering this financial condition of the Board, there
was no justification for introducing a gratuity scheme for workmen governed by the Provident Fund Rules, nor was there any
justification for calculation of pension on the basis of adding 50
per cent of the dearness allowance to the basic pay. Mr:. Chari
counsel for the appellants, challenged this decision of .the Tribunal on two grounds.
The first ground was that the Tribunal
was wrong in judging the capacity of the Board to pay after
taking into account the. deficit of over Rs. 2 crores which it had
inherited from the Bombay State Electricity Board; and the
second ground was that the financial capacity of the Board should
be judged only on the basis of its commercial undertakings, excluding the activities of the Board which were in the nature of
national duties.
So far as the first point is concerned, we "-ink that there is
some force in the submission made by learned counsel.
The
deficit inherited by the Board from its predecessor cannot be
treated as a revenue loss which will have bearing on its paying
capacity. Such inherited deficit should really have been treated
as capital loss; but even this loss cannot be completely ignored,
because the paying capacity of an employer has to take into
account even capital losses. However, even if this accumulated
deficit of over Rs. 2 crores is ignored, it is clear that, during
the three years after its formation, the Board itself incurred heavy
losses which totalled to about R~. 110 lakhs. Consequently, even
if that accumulated deficit is . not taken into account, it cannot
be held that the Board will have the capacity of bearing the additional financial burden to the tune of Rs. 49 lakhs a year, if
required to pay dearness allowance at the rates claimed by the
Sangh.
On the second point, we are unable to accept the submission
made by learned counsel. The Board was constituted under the
Electricity (Supply) Act No. 54 of 1948, and section 18 of
th~t Act lays down the duties of the Board. By its very constitution. the Board is charged with the general duty of promoting
the co-ordinated development of the generation, supplv and distribution of electricity within the State in the most efficient and
economical manner, with particular reference to such developA
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WORKMEN v. GUJARAT ELECTY. BOARD (Bhargava, J.)
181
ment in areas not for the time being served or adequately served
by any licensee.
In particular, the duty of the Board is to prepare and carry out schemes with the objects mentioned above; to
supply electricity to owners of controlled stations and to licensees
whose stations are closed down under this Act; and to supply
electricity as soon as practicable to any other licensees or persons
requiring such supply and whom the Board may be competent
under this Act so to supply.
When the Board was constituted
to carry out these duties, its capacity to bear the burden of
paying wages to its employees has to be worked out after taking into account all the activities which the Statute requires it to
carry on. The running of Power Houses is only one of the 'branch
of those activities.
The profit that the Board can be held to
have earned can only be worked out after including in the accounts all the expenditure incurred by it on all its schemes for
distribution of electricity to licensees or to consumers, whether
in urban areas or in rural areas. In fact, there is not even an
assertion on behalf of the appellants-workmen that they were
employed solely in connection with a profitable undertaking of
the Board and had nothing to do at all with the other activities
which the Board is actually carrying on.
No doubt, learned
counsel is right in urging on the basis of the decision of this Court
in Hindustan Antibiotics Ltd(') that the circumstance that the
Board is an industry in the public sector does not exempt it from
application of principles which apply to an industry in private
sector, and the Board must also be made to pay wages on the
same basis as private sector employers.
This, however, does
not advance the case of the appellants, because, even in a private
sector, additional burden over and above a minimum wage can
only be justifiably imposed in industrial adjudication, if the
employer has the capacity to meet that burden. In this case,
the Tribunal has refused to grant the demand of the appellants
not on the ground that the Board is an industry in public sector,
but on the ground that it does not have the capacity to pay
That capacity has rightly been judged on the basis of all the
undertakings being worked by the Board.
The Tribunal, after holding that there was no justification for
granting the demands of the workmen because the Board had no
capacity to bear the additional burden, proceeded further to examine whether the Board's existing scheme of payment of dearness allowance was reasonable and took into account various factors for arriving at its finding that it could not be held that the
terms offered by the Board were unreasonable. In this connection, reliance was placed on behalf of the appellants on the fact
that two Electric Supply Companies were paying wages which
(I) [1967] tS:C·R. 652:----
182
SUPREME COURT REPORTS
were much higher than the wages being paid by the Board, and
there was no jujstification for refusing the demand for additional
dearness allowance which would place the employees of the Board.
on par with the employees of those Electric Supply Companies.
One of those Electric Supply Companies is the Ahmedabad Electricity Co. Ltd., Ahmedabad, in whose case wages were fixed by
an Award published in 1956 Industrial Court Reporter at p. 746
The other is the Viramgam Electric Supply Co. Ltd., Viramgam,
the Award relating to which is published in 1968 Industrial Court
Reporter at p. 1010. The argument was that wages paid by the
Board should not be lower than those paid by these two Electric
Supply Companies which were engaged in the same line of business of production and supply of electricity. The Tribunal brushed aside these example by stating that they were not comparable
with the Board. In taking this view, we do not think that the
Tribunal committed an error.
In Williamsons (India) Private
Ud. v. Its Workm-en('), this Court clearly. laid down what criteria had been established for considering what are comparable
concerns when dealing with. a question of wage fixation. It was
held:-
''This Court has repeatedly observed that, in considering the question about comparable concerns, tribunals should bear in mind all the relevant facts in relation to the problem. The extent of the business carried
by the concerns, the capital invested by them, the profits made by them, the nature of the business carried
on by them. their standing, the strength of their labour
force, the presence or absence and the extent of reserves,
th~ dividends declared by them and the prospects
about the future of their business-these and all other
relevant focts have to be borne in mind."
In the 1irc,c1: ca~e. it is clear that, if these various factors are
taken int<' .:~.;r,·.·nt, noit'.1er the Ahmedabad Electricity co: Ltd .. ·
nor the Viramgam Electric Supply Co., can be held to be a concern cornpJrable with the Board. As we have indicated earlier.
the activitks carried on by the Board are not only production of
electricity and direct distribution in some areas, but also include
preparation of schemes for development of supply of electricity
in areas not served so far and for supply of electricity to licensees.
The two concerns at Ahmedabad and Viramgam merely
generate and supply electricity to consumers in the cities or towns
served by them. The Board, according to the Act constituting
it, has primarily to supply electricity to licensees, and not confine its supply to direct consumers like these two concerns. The
(l) (1962)' 1 L.L.J. 302.
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supply to consumers is only undertakmi where there are no
licensees to undertake the distribution of electricity generated by
the Board
and this activity of direct supply to consumers is
primarily ~arried on in rural areas where the population is sparsely distributed as compared to the cities or towns served by the
other two concerns.
Then, there is the important factor that
the Board is running at a huge loss every year. The workmen
did not provide figures to show what was the profitability of
the other two concerns, though the A wards in their cases seem
to indicate that both of them are running at a profit.
In these
circumstances, we cannot hold that the Tribunal committed any
error in ignoring the wages being paid by these two concerns,
when dealing with the question of payment of dearness allowance by the Board.
In this connection, a request was made
by learned counsel that we may remand the case to the Tribunal
in order to enable the Sangh to produce evidence to the satisfaction of the Tribunal that these two concerns are comparable,
or to cite examples of other undertakings in the same industry
in the Saurashtra region, or, if there be no such undertakings available, of undertakings in other industries in the Saurashtra re·
gion so as to enable the Sa,ngh to cia;m wages on parity with those
undertakings.
We do not think that there is any justification for
remanding the case for such a purpose at this stage. It was open
to the Sangh to produce material before the Tribunal when the dispute was first investigated by it, and no reason is shown why
the Sangh did not do so.
Further, as we have indicated earlier, the very circumstance that the Board does not have the
financial capacity to meet the additional burden of the demands
made by the workmen justifies the order made by the Tribunal.
The further request that the remand would enable the Sangh to
show whether the losses brought to the notice of the Tribl]ltlal
by the Board were, in fact, net losses has also no force because, when the losses were proved before the Tribunal by' pro·
duction of an affidavit on behalf of the Board and the deponent
appeared in the witness-box, no attempt was made on behalf
of the Sangh to cross-examine the deponent in order to establish
that the losses had not been correctly represented.
We do not
think that, in these circumstances, any remand of this case is
ca.lied for.
It does appear that the Tribunal in its award comlllltted the error of comparing the Board with the Maharashtra
Electricity Board and similar Electricity Boards in other States
and thus ~cted against th~ principle that wages should be compared on mdustry-cum-regton basis; but that mistake does not
justify any interference with the award which is otherwise correct
and justified.
The Tribunal was quite right in rejecting the
demands made by the Sangh, particularly in the light of the further fact relied upon by the Tribunal that all the employees of
J:84
SUPREME COURT REPORTS
[1969] 3 S.C.R.
the Board in the Gujarat Region as well as large majority of
over 2500 employees even in the Saurashtra Region had accepted the existing rates based on the settlement and only 466 employees had come forward with this demand without establishing
that the demand was restricted to bringing up their wages to the
level of minimum wages.
The appeal is dismissed, but we make no order as to costs.
RK.P.S.
Appeal dismissed.
A
B