# CLERKS OF CALCUTTA TRAMWAYS v. CALCUTTA TRAMWAYS CO. LTD

- **Citation:** [1956] 1 S.C.R. 772
- **Court:** Supreme Court of India
- **Decided:** 1956
- **Case number:** Civil Appeal No. 105 of 1954
- **Bench:** Bhagwati, Venkatarama Ayyar, s. K. DAS, GovINDA MENON
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/clerks-of-calcutta-tramways-v-calcutta-tramways-co-ltd-1266
- **Pages:** 9

## Headnote

Industrial dispute-Dearness allowance-Clerks-Middle class
employees-Whether uniform rates to be adopted-Decisions of Trilmnals-Power of the Supreme Court to interfere.
It is well settled that the decisions of a Tribunal on questions
of fact are final and that the Supreme Court would interfere only in
cases where (1) the Tribunal acts in excess of the jurisdiction conferred upon it under the statute or regulation creating it or where it
ostensibly iails to exercise a patent jurisdiction; (2) there is an
error apparenb on the face of the decision; (3) the Tribunal bas
erroneously applied well-accepted principles of jurisprudence.
The Bengal Chamber of Commerce of which the respondent
Company was a member, had made an investigation into the cost of
living index for the middle class families and fixed the dearness
allowance payable to the employees of the mercantile firms in Calcutta. Before the Industrial Tribunal as well as the Labour Appellate Tribunal the claim was put forward on behalf of the appellants
{bhe clerks of the respondent Company) that the dearness allowance
for them should be at the same rates as those decided upon by the
Bengal Chamber of Commerce in respect of the middle classes to
which the appellants belonged and they contended that the procedure
adopted by the Labour Appellate Tribunal leaving out 20 points of
the living cost index un-neutralised was not justifiable.
Held, that in matters of bhe grant of dearness allowance there
cannot be a hard and fast rule applicable to all kinds of employees
and except in the very lowest class of manual labourers it is not
proper to neutralise the entire rise in the cost of living by dearness
allowance. There are different grades among the middle classes and
the appellants cannot claim to have the same rates of dearness
allowance as those fixed for the clerks of the mercantile firms by the
Bengal Chamber of Commerce.

## Text

1956
October 11
772
SUPREME COURT REPORTS
[1956]
CLERKS OF CALCUTTA TRAMWAYS
v.
CALCUTTA TRAMWAYS CO. LTD.
[BHAGWATI, VENKATARAMA AYYAR, s. K. DAS and
GovINDA MENON JJ.]
Industrial dispute-Dearness allowance-Clerks-Middle class
employees-Whether uniform rates to be adopted-Decisions of Trilmnals-Power of the Supreme Court to interfere.
It is well settled that the decisions of a Tribunal on questions
of fact are final and that the Supreme Court would interfere only in
cases where (1) the Tribunal acts in excess of the jurisdiction conferred upon it under the statute or regulation creating it or where it
ostensibly iails to exercise a patent jurisdiction; (2) there is an
error apparenb on the face of the decision; (3) the Tribunal bas
erroneously applied well-accepted principles of jurisprudence.
The Bengal Chamber of Commerce of which the respondent
Company was a member, had made an investigation into the cost of
living index for the middle class families and fixed the dearness
allowance payable to the employees of the mercantile firms in Calcutta. Before the Industrial Tribunal as well as the Labour Appellate Tribunal the claim was put forward on behalf of the appellants
{bhe clerks of the respondent Company) that the dearness allowance
for them should be at the same rates as those decided upon by the
Bengal Chamber of Commerce in respect of the middle classes to
which the appellants belonged and they contended that the procedure
adopted by the Labour Appellate Tribunal leaving out 20 points of
the living cost index un-neutralised was not justifiable.
Held, that in matters of bhe grant of dearness allowance there
cannot be a hard and fast rule applicable to all kinds of employees
and except in the very lowest class of manual labourers it is not
proper to neutralise the entire rise in the cost of living by dearness
allowance. There are different grades among the middle classes and
the appellants cannot claim to have the same rates of dearness
allowance as those fixed for the clerks of the mercantile firms by the
Bengal Chamber of Commerce.
CIVIL
APPELLATE JURISDICTION:
Civil Appeal
No. 105 of 1954.
Appeal by special leave from the judgment and
order dated November 6, 1952, of the Labour Appellate Tribunal, Calcutta in Appeal No. Cal-3 of 1952
S.C.R.
SUPREME COURT REPORTS
773
1956
arising out of the award dated September 25, 1951,
of the Court of District Judge, Industrial Tribunal,
Calcutta in Case No. VIII-23 of 1951.
Clerks of Calcutta
Tramways
S. 0. Isaacs, A. K. Datt and Sukumar Ghose, for
the appellants.
M. 0. Setalvad, Attorney-General for India, D. R.
Das and S. N. Mukherji, for the respondent.
B. Sen and P. K. Bose, for Intervener (State of
West Bengal).
1956. October 11. The Judgment of the Court
was delivered by
GOVINDA MENON J.-This appeal is by special
leave against the decision of the Labour Appellate
Tribunal of India, Calcutta, which modified the award,
passed by the Industrial Tribunal, Calcutta, in the
matter of a dispute referred to it by the Government
of West Bengal, for adjudication with regard to the
rates of dearness allowance for clerks and Depot
cashiers, employed by the Calcutta Tramways Coy.
Ltd., numbering about 600, out of a total of 10,000
workmen. Disputes having arisen between the workmen of the Calcutta Tramways Coy. Ltd. (which may
hereafter be called 'The Company') on the one hand,
and the employers on the other, relating to the dearness allowance payable to the workmen, there were
two previous awards, one dated May 16, 1947, by Sri
S. N. Guba Roy, and the other dated October 27,
1948, by Sri P. K. Sircar. Both of these awards related
to all the employees of the Company and not to the
clerks and Depot cashiers alone.
Subsequently a
reference was made by the West Bengal Government
on June 13, 1951, concerning a dispute relating to the
dearness allowance of the workmen of the Company,
excluding clerks and Depot cashiers.
There was an
award and an appeal, and in that appeal the Appellate Tribunal increased the dearness allowance by
Rs. 7 /8/- for workmen in the pay ranges below Rs. 50
and up to the pay range of Rs. 250 and by a flat rate
v.
Calcutta
Tramways
Co. Ltd.
•
1956
Clerks of Calcutta
Tramways
v.
Calcutta
Tramways
Co. Ltd.
Govinda ,Menon].
774
SUPREME COURT REPORTS
[1956]
of Rs. 5 in the higher pay ranges taking the cost of
living index of the workmen class at 370 points.
In the present award, which relates to the clerks
and the Depot cashiers alone, the Industrial Tribunal
gave Rs. 47 /8/· as dearness allowance for a pay
range of Rs. 51 to Rs. 100 and provided for a progressive increase of Rs. 5 for each slab of Rs. 50 in
the pay range. The Appellate Tribunal increased the
amounts so awarded by Rs. 2/8/- more than what was
granted to the other workmen of the Company. The
cost of living index for the middle class families had
been fixed by an investigating body of the Bengal
Chamber of Commerce during the relevant year at
382 points, whereas the index in the case of working
class was fixed at 370 points. The increased amount
awarded for the various pay ranges and shown in the
decision of the Labour Appellate Tribunal which need
not be repeated again; was founded on these cost of
living indices though the amount was not the same as
recommended by the Bengal Chamber of Commerce.
Before the Labour Appellate Tribunal, as well as
the Industrial Tribunal, the claim put forward on behalf of the clerks and Depot cashiers was that the
dearness allowance should be on the same rates as
decided upon by the Bengal Chamber of Commerce
of which the company is a member and no difference
should have been made between the dearness allowance recommended by the Bengal Chamber of Commerce and that to be awarded by the Industrial Tribunal. In fact, what was urged was that the recommendation of the Bengal Chamber of Commerce ought
to have been accepted in its entirety for the reason
not only that the Company is a. first class member of the
Chamber but also that the class of persons, namely
the middle classes for whom the recommendation was
in tended, includes clerks and Depot cashiers of the
Company as well, and the same having been accepted
by the Mercantile Tribunal which dealt with the dearness allowance payable.to the employees of the mercantile firms in Calcutta, the Industri1'1 Tribunal, as
well as the Labour Appellate 'I'ribunal, should have
-
S.C.R.
SUPREME COURT REPORTS
775
1956
Clerks of Calcutta
Tra1nways
v.
Calcutta
Tramu•ays
Co.lid.
followed the same. The learned Judges of the Appellate Tribunal held that those recommendations were
made to the mercantile firms where the workmen
consist practically of the clerical and subordinate
staff as opposed to Tramways Company where the
large percentage of workmen belong to other categories, the clerks and Depot cashiers being only a
small minority, though they found that the cost of Go"i"da Me11o11 J.
living index found by the Bengal 8hamber of Commerce should be accepted as the criterion for awarding the increased dearness allowance in the case of
the employees of the Company as well.
On behalf of the appellants it is urged before us
that a different mode of treatment than the one recommended by the Bengal Cham her of Commerce
should not have been resorted to in the case of the
appellants, for the reaso~ that those recommendations
are intrinsically reasonable, considering the uniformity of life and modes of habit of the middle classes
to which the clerks and Depot cashiers belong.
The
respondent Company being a member of the Bengal
Chamber of Commerce should, instead of ignoring
the recommendation, have acted upon it as a mandate, so that its action as a member should hot be
inconsistent with that followed by others especially
since there have been no valid reasons alleged for the
non-acceptance of the recommendation. It is further
urged that there is no acceptable defence put forward
that the abovementioned recommendation will not
apply to institutions having a mixed sta.ff as the Company in question. On the other hand, what is stated
in the written statement of the Company is that
according to the previous award it had been paying a
uniform sliding scale of dearness allowance for all
categories of workmen as detailed in Paragraph 6(b).
It is, therefore, contended that what the Industrial
as well as the Appellate Tribunal should have done
was to have evolved a principle to fix the dearness
allowance in relation to the basic salaries and the cost
of living index, as that alone would satisfy the recommendations of the Bengal Chamber of Commerce.
1956
Clerks of Calcutta
Tramways
v.
Calcutta
Tra11iways
!;o.Ud.
Got·iuda Menon J.
776
SUPREME COURT REPORTS
[1956)
We have, therefore, to see whether in following the
course now adopted by the Tribunals below they have
ignored any legal principle or acted in violation of
any statute. There can be no doubt whatever that
if.the scheme adumbrated by the Bengal Chamber of
Commerce is adopted in the case of clerks and Depot
cashiers, they would get amounts far in excess and
out of all proportion to what were awarded to the
other workmen whose appeal had already been disposed of by the Appellate Tribunal though it has to
be recognized that the cost of Jiving index in the case
of the appellants has to be considered to be more than
the index of workmen whose avocations are the result
of physical labour rather than of mental faculties. In
short, the clerks and Depot cashiers should be considered as the white collared fraternity.
In these circumstances, we have to find out whether the procedure followed by tl;ie Labour Appellate
Tribunal, namely leaving out 20 points un-neutralised
and allowing Rs. 5 per 20 points rise in the Hving
cost index but taking into consideration a higher living
cost index of 382 in the case of the appellants as compareq with the average index of the workmen of 370,
is a justifiable method to be adopted.
·
It is difficult t<> hold that the middle classes in this
country can be said to form a separate stratum of
society even in a city like Calcutta having the
same mode of life, the same necessities, uniform
requirements and comforts.
There are different
grades even among the middle classes and it is unwise
to predicate the same degrees of comforts and necessities for everyone who is said to belong to the middle
classes. Such being the case, to say that the clerks
in the mercantile firms can be considered equal in all
respects to the 600 clerks and Depot ca.shiers of the
Company, is an argument which cannot be accepted
as sound. The Labour Appellate Tribunal has not
completely ignored the recommendations of the
Bengal Chamber of Commerce, for it is seen that in
raising the amount awarded by the Industria.l
•
S.C.R.
SUPREME COURT REPORTS
777
Tribunal the Appellate Tribunal has based its conclusion on the higher cost of living index in the case of
1956
Clerks of Calcutta
middle class employees.
Tramways
Such being the case, the point for consideration is
v.
whether any quest.ion of principle is involved, so that
Calcutta
this court might interfere with the conclusions arrived
Tt'amways
at by the Labour Appellate Tribunal. Wide and unco. Ud.
definable with exactitude as the powers of the Court
are (see Dhakeswari Cotton Mills L.td. v. Commissioner of Income Tax, West Bengal(1)), it is now well
settled that generally the necessary pre-requisites for
this court's interference to set right decisions arrived
at by Tribunals whose conclusions on questions of fact
are final can be classified under the following categories, namely, (i) where the Tribunal acts in excess
of the jurisdiction conferred upon it under the statute
or regulation creating it or where it ostensibly fails
to exercise a patent jurisdiction; (ii) where there is
an apparent error on the face of the decision and
(iii) where the Tribunal has erroneously applied wellaccepted principles of jurisprudence. It is only when
errors of this nature exist, that interference is called
for. In the present case the appellants have not been
able to show that there is any deviation from those
principles. If the Tribunal below had failed to resort
to a basic principle, then something might have been
said but what has been done is, that in computing the
dearness allowance it has considered various methods
and adopted one of them. That being the case, it is
difficult to say that there is any question of principle
at all.
The report of the Central Pay Commission at page
46, in Paragraph 71, made the following recommendation:
"Without adopting such a complicated procedure, we think it sufficient to provide by slabs for
persons on different levels of pay, as shown in the
accompanying table which also provides for diminishing rates of dearness allowance as the cost of living
index falls, taking the stages by 20 points at a time".
(1) [1965] 1 S.O.R. 9!ll, 9:19.
Gooinda Menon}.
1956
Clef'ks of Calcutta
Tramways
v.
Calcutta
Tra,nways
Co. Ltd.
Govinda Menon J.
778
SUPREME COURT REPORTS
[1956]
It refrained from recommending the neutralisation
of the entire higher coat of living by means of dearness allowance.
The report of the Committee on Fair Wages appointed by the Government of India in .Chapter IV,
dealing with Wage Adjustments considered in paragraph 43 the various modes and methods of granting
relief to meet the burden of increased cost of living
and came to the conclusion that there is no practice
of uniformity in the extent of compensation given to
employees to meet the increased cost of living. It
observed as follows:-
"Tbe Pay Commission bas accepted the principle
that the lowest paid employee should be re-imbursed
to the full extent of the rise in the cost of living and
that higher categories of employees should receive a
diminishing but graduated scale of dearness allowance. The Pay Commission bas rejected the principle of a flat rate for all categories of employees,
irrespective of their basic salaries".
Finally it came to the conclusion "that for the lowest
categories of employees the target should obviously
be compensation to the extent of 100 per cent. of the
increase in the cost of living. For categories above
the lowest we agree that the same consideration will
not apply. A flat rate equal to the rate allowed to
the least skilled worker is not likely to satisfy higher
categories":
In the analysis regarding the Industrial Awards,
issued by the Government of India, Ministry of
Labour, the question of dearness allowance is considered somewhat elaborately. At page 33 there is a
discussion regarding the linking of dearness allowance
to the cost of index numbers and as to whether a flat
rate of dearness allowance irrespective of the income
group should be allowed or not.
They further considered the linking of dearness allowance to the cost
of living index numbers on the scale of income groups,
but at rates diminishing with the income received. A
perusal of the fairly elaborate discussion in Chapter
-
....
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-
•
S.C.R.
SUPREME COURT REPORTS
779
1956
III shows that there cannot be a hard and fast rule
applicable to all kinds of employees. Very much will
d
h
d
f 1 b
h
f Clerks of Calcutta
depen upon t e con itions o
p. our, t e nature o
Tramways
the locality and the mode of living.
v.
Calcutta
In Buckingham and Carnatic Company Ltd., Madras
v. Workers of the Company(1) the Tribunal considered
Tramways
the question of neutralisatiOn of the rise of the cost
co. Ltd.
of living by the grant of dearness allowance and was Govinda Meno11J.
of the opinion that cent per cent neutralisation cannot be allowed, as it would lead to a vicious circle
and add fillip to the infiatory spiral. It further held
that there was no reason why the Industrial worker
should not make sacrifices like all other citizens. We
can now take it as settled that in matters of the
grant of dearness allowance except to the very lowest
class of manual labourers whose income is just
sufficient to keep body and soul together, it is impolitic and unwise to neutralise the entire rise in the
cost of living by dearness allowance. More so in the
case of the middle classes.
The criterion to be adopted in the fixation of dearness allowance is also considered in Mahomad Rai
Akbarali · Khan v. The Associated Cement Companies
Limited(9) where similar principles are discussed.
On behalf of the appellants our attention was invited to certain observations contained in The Millowners' Association, Bombay v. The Rashtriya Mill
Mazd,oor Sangh(3), but we do not think that any different principle is enunciated there at all. Mr. Isaacs,
the learned counsel for the appellants, laid great
stres1;1 on the decision in Workmen of the Firestone
Tyre and Rubber Company of India Ltd., Bombay v.
Firestone Tyre and Rubber Oompam,y of India Ltd.,
Bombay(4) where the Tribunal expressed the opinion
that dearness allowance is intended to neutralise rise
in the cost of living and as there is a well recognised
difference between the clerical staff and other workmen in their cost of living, the latter are not entitleμ
(1) [1952] L.A.O. 490, 519, 520.
(2) [1953) Ii A.O. 677.
(S) {1955] L.A.C. 371.
(4) (1953] L.A.O. 509.
101
19>6
Clerks of Calcutta
Tramways
v.
Calcutta
Tramways
Co. Lt4.
Govi"nda Menon J.
780
SUPREME COURT REPORTS
(1956)
to claim the allowance on the same basis. From this
the learned counsel contends that the recommendations of the Bengal Chamber of Commerce should be
accepted iμ toto. In our opinion, the decision does
not help the point of view put forward on behalf of
the appellants. In fact, the Labour Appellate Tribunal has made a distinction between the physical
labourers and the clerks and Depot cashiers.in whose
work it is not alone the physical exertion that is
essential but some kind of mental and brain work as
well and accordingly the higher cost of living index
taken into account.
In such circumstances, it seems to us that the
Labour Appellate Tribunal has, after conside.ring the
various points of view, come to the correct conclusion
in awarding the dearness allowance it did. There is
no question of law or principle invo)ved and the
appeal has to be dismissed with costs of the Calcutta
Tramways Coy. Ltd.
The State of West Bengal, which has intervened
during the appeal, will bear its own costs.
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•