# HINDUSTAN HOSI~'RY INDUSTRIES v. F. H. LALA AND ANOTHER

- **Citation:** [1974] 3 S.C.R. 302
- **Court:** Supreme Court of India
- **Decided:** 1974
- **Case number:** Civil Appeal No. 548 of 1970
- **Bench:** S. N. Dwivedi, P. K. Goswami
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/hindustan-hosi-ry-industries-v-f-h-lala-and-another-6048
- **Pages:** 11

## Headnote

Bo111b.ay [ndustrial -Rf!lations Act, 1946-:-w'orkmen's de1nand for rew.wnn
of basic wages and dearness allowance of timt-rated and pitct-ratcd workers
with retrospectil'f' eflect-Co11ct>pts of 111'11!rnun1 wage, fair wage, and livl"g wnJ:e.
Principles of wage fixation.
A
B
Co11s!itutio11 of /f1dai .A rt. 136-Practice-Principlts go1•erni11g interference
C
with awards of Industrial Tribunals-Power not to ht exercised so as (o co111·ert
Suprcnie Court into a court of appeal.
On a demand by the ·Mill Mazdoor Sabha for the revision of basic wages
for time-rated and piece-rated
workers and for
the rev1s1on
of dearness
nllowance, reference was made to the Industrial Court Maharashtra u/s 73-A
of the Bombay Industrial Relations Act. The Court follnd that on the face of
it, the wages provided for the work.men of the factory were inadequate and low
and i;ven in a loss-making concern, such wages have to b! raised: The Court
further held that although the business was started by the appellant in 1967,
it had earned profits of Rs. 1,51,000/- in· 8 months of 1967 with a capital of
Rs. 2,28,000/-. The appellant Company also earned profits of Rs. 1,88,000/-
on the capital of Rs. 3,42,000/- in 1~68. The Court, therefore, held that the
appellant-company was prosperous and its financial position was sound so as
to tak:e the burden of the revision of pay scitles and dearness allowance.
The
J ndustrial Court fixed the minimum Wages at Rs. S /- and fixed bigher wa~cs in
a graded ntanner to the maximum. of Rs .. 8.SO per day.' The Tribunal also
granted for every rise of 10 _points or part thereof, above the index bracket
621-630, dearness allowance @ lOP per day.
The wages of the
piece-rated
workers were raised by 30 per cent.
D
E
On appeal by special leave to this Court, the ap~llant raised the following
contentions : (i) the Tribunal erred in ignoring the difference between ntinimum
wage and fair wage; it was in- fact granting fair wage .and did not take into
account the well-settled relevant factors in making the award; (ii) the tribunal
absolutely ignored the aspect of the capacity of the appellant to bear the burden
of the additional rise in -wages on account of the award; (iii) there is no justiF
fication whatsoever for allowing the present increase of wages without following
:1ny piinciple and :ven higher than the statutory minimum waae fixed in respect
of iJther industrits in the state.
fhe Sabha, on the other hand, submitted as follows·: {i) the Tribunal has
awllrdcd only minimum wage; (ii) even if it is assumed that the wage awarded
is a little higher than the minimum: «'age, it is certainly tower than the lowest
level of the fair wage; and (iii) in order to allow the wage increases the Tribunal
had before it materials from· the evidence famished in the Strctchlon A.ward
G
::i.s well as the trend of wage rates with which the ·Tribunal must be ex:pectcd to
be familiar, in the region and in the ind1,1stry.
Dismissine, the appeal,
HELD: (i) From a perusal of the award it is clear that the Tribunal was con~i
dering the case from ~h~ poinf of_ view of .grantina ~omethiog hig_her than ~~c
subsistence or bare m1n1mum wage bordenng on fair waac.
'Ilus conc1us1on
has been reached since th.! yardstick of the present award is the
Stretchlon
H
awai-o which was seeking to determine some kind of fair wage,
[307Cl
(ii) from an ex:ami~ation of lhe decisions of this Court, it is clear that
the floor _level is the bare minimum wage or subsistence wage.
In fix.in~ this
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HINDUSTAN HOSIERY INDUSTRIES v. F. H .• LALA (Goswami, J.) 303
wage: Industrial Tribunals will. ~ave to consider the position from the Point
~f VIC\\'.. of the wo~kcr. 1!1e capacity of the employer to pay s~ch a wage being
irrelevant.
The fair wage also must take note of the economic reality of the
situation and the minimum needs of the working class having a fair sized falilily
with, an eye to the prc!ervation of his efficiency as a work.er. [310D)
Exprtss Newspaptrs (Prii-att)

## Text

HINDUSTAN
HOSI~'RY INDUSTRIES
v.
F. H. LALA AND ANOTHER
Febmary 8, I974
[S. N. DWIVEDI AND P. K. GOSWAMI, JJ.]
Bo111b.ay [ndustrial -Rf!lations Act, 1946-:-w'orkmen's de1nand for rew.wnn
of basic wages and dearness allowance of timt-rated and pitct-ratcd workers
with retrospectil'f' eflect-Co11ct>pts of 111'11!rnun1 wage, fair wage, and livl"g wnJ:e.
Principles of wage fixation.
A
B
Co11s!itutio11 of /f1dai .A rt. 136-Practice-Principlts go1•erni11g interference
C
with awards of Industrial Tribunals-Power not to ht exercised so as (o co111·ert
Suprcnie Court into a court of appeal.
On a demand by the ·Mill Mazdoor Sabha for the revision of basic wages
for time-rated and piece-rated
workers and for
the rev1s1on
of dearness
nllowance, reference was made to the Industrial Court Maharashtra u/s 73-A
of the Bombay Industrial Relations Act. The Court follnd that on the face of
it, the wages provided for the work.men of the factory were inadequate and low
and i;ven in a loss-making concern, such wages have to b! raised: The Court
further held that although the business was started by the appellant in 1967,
it had earned profits of Rs. 1,51,000/- in· 8 months of 1967 with a capital of
Rs. 2,28,000/-. The appellant Company also earned profits of Rs. 1,88,000/-
on the capital of Rs. 3,42,000/- in 1~68. The Court, therefore, held that the
appellant-company was prosperous and its financial position was sound so as
to tak:e the burden of the revision of pay scitles and dearness allowance.
The
J ndustrial Court fixed the minimum Wages at Rs. S /- and fixed bigher wa~cs in
a graded ntanner to the maximum. of Rs .. 8.SO per day.' The Tribunal also
granted for every rise of 10 _points or part thereof, above the index bracket
621-630, dearness allowance @ lOP per day.
The wages of the
piece-rated
workers were raised by 30 per cent.
D
E
On appeal by special leave to this Court, the ap~llant raised the following
contentions : (i) the Tribunal erred in ignoring the difference between ntinimum
wage and fair wage; it was in- fact granting fair wage .and did not take into
account the well-settled relevant factors in making the award; (ii) the tribunal
absolutely ignored the aspect of the capacity of the appellant to bear the burden
of the additional rise in -wages on account of the award; (iii) there is no justiF
fication whatsoever for allowing the present increase of wages without following
:1ny piinciple and :ven higher than the statutory minimum waae fixed in respect
of iJther industrits in the state.
fhe Sabha, on the other hand, submitted as follows·: {i) the Tribunal has
awllrdcd only minimum wage; (ii) even if it is assumed that the wage awarded
is a little higher than the minimum: «'age, it is certainly tower than the lowest
level of the fair wage; and (iii) in order to allow the wage increases the Tribunal
had before it materials from· the evidence famished in the Strctchlon A.ward
G
::i.s well as the trend of wage rates with which the ·Tribunal must be ex:pectcd to
be familiar, in the region and in the ind1,1stry.
Dismissine, the appeal,
HELD: (i) From a perusal of the award it is clear that the Tribunal was con~i
dering the case from ~h~ poinf of_ view of .grantina ~omethiog hig_her than ~~c
subsistence or bare m1n1mum wage bordenng on fair waac.
'Ilus conc1us1on
has been reached since th.! yardstick of the present award is the
Stretchlon
H
awai-o which was seeking to determine some kind of fair wage,
[307Cl
(ii) from an ex:ami~ation of lhe decisions of this Court, it is clear that
the floor _level is the bare minimum wage or subsistence wage.
In fix.in~ this
A
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HINDUSTAN HOSIERY INDUSTRIES v. F. H .• LALA (Goswami, J.) 303
wage: Industrial Tribunals will. ~ave to consider the position from the Point
~f VIC\\'.. of the wo~kcr. 1!1e capacity of the employer to pay s~ch a wage being
irrelevant.
The fair wage also must take note of the economic reality of the
situation and the minimum needs of the working class having a fair sized falilily
with, an eye to the prc!ervation of his efficiency as a work.er. [310D)
Exprtss Newspaptrs (Prii-att) Ltd. and a11other v. Union of India and othtrl
fl9.S9] S.C.R. 12, Mtsser.f. Crown Al1a11itti1u11 Works v. Their Workmen [1958]
S.C."R. 651 quoted in [1953] S.C.R. 12, Kama11i Metals a11d Alloys Ltd. v.
Tl1tir Workmen [1967) 2 S.C.R. 463/467 Hydro Engineers (Pl't.) Ltd. v. Th~r
Work,nu:ri {1969] I L.L.J. 713/716 Mfs Jaydip
Industries,
Tlia11t v.
T!te
Workmen [1972] 1 L.L.J. 244/247 V. U11ic/1oyi v.
State of Kuala
[1962]
J S.C.R. 951, quoted in [1972] 1 L.L.J. 244/247 and MIS Uniclie111 Laborat"ries
Ltd. v. The Workmen [1972) 1 L.L.J. 5161590/591, referred to.
Piece-rate is what is paid by results or outturn of work.
There is greater
consideration to quantity in fiXing piece-rates in some particular types of work
in some industries with a guaranteed minimum.. The same standard may not be
appropriate in all types of piece work. Factors such as the importance of man
rather than the machine employed. correlation of piece-rates with time-rates
of•the same or similar class of workers. special skill of the. worker with
or
without machine. the time factor in work and payment of a guaranteed ruinimuin
will have to be considered.
There may be a -misty penumbra which has got
lo be P.ierced through upon all available materials on record and also on what
the Tnbunal, in fairness, can lay its hands on, with notice to the p<irties. for the
purpose of fixing the piece-rates balancing all aspects.
The central figure in
the adjudication, however, is the wage-earner who should have a fair deal in
the bargain in a rCal sense as far as can be without at the same time ignoring
the vital interests of the industry whose viability and prosperity ure ulso the
mainstay of labour. [310G]
(iii) 4tt· 136 of the Constitution does not create a right of appeal in favour
of any person. ·Jt confers power on the court which should not be so exercised
as to convert the court into a court of appeal. Though Art. 136 is couched in
the Widest terms. it is necessary for this
Court to · exercise its
dicretionary
jurisdiction only in cases where awards are made in violation of the principles
of natural justice. causing substantial and grave injustice to parties or raises. an
important principle of industrial Jaw requiring elucidation and final dech.1011
by this Court or discloses such othei exceptional or special circumstances which
merit the consideration of this Court.
Taking a comprehensive view of the
facts and circumstances of the case, no intervention is called for with th\! <1wanl.
13 l!E]
Bengal C./iemical and PIUlnnaceutical Works Ltd. v. Their Workn1en, [1959]
Supp. 2 S.C.R. 136, !cfcrred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 548 of 1970.
Appeal by Special Leave from the Award dated the 29th Janu·
ary, 1970 of the Industrial Court, Maharashtra, Bombay, in rder-.
ence (IC) N.o. 2 of J 969.
G. B. Pai, Prakash Mehta., 0. C. Mathur an<l P. C. Bhartari. for
G
the appeUant.
H
fl. K. Sowani, P. H. Parekh and S. Bhandare, for the rospondent.
The Judgme11t of the Court was delivered byGoswAMI, J. This appeal by special ]eave is directed against an
award of the Industrial Court. Maharashtra (hereinafter referred to
for brevity as the Tribunal) of 29th January, 1970.
There was a
reference by the Mill Mazdoor Sabha, Bombay (briefly the Sabha)
under section 73A of the Bombay T ndustrhl Relations Act~ 1946, in
304
SUPRE].!E COURT REPORTS
[ 1974-J 3 S.C,R •.
pursuance of a notice of change dated 22nd · August, 1968. The
.Sabha. demanded revised, basic wages for the time-rated workme)l of
several categories and also a rise of 50% in the wage of th• piccerated workers in the Consumers' Price Index bracket 621--030 (old
series).· The Sabha also demanded dearness allowance of iO paise
per day for every rise of 10 points or part thereof abov.e the said stab.
They also claimed the benefits retrospeetively fr0m· 1st June, 1968.
The Sabha submitted its statement of claim on 14th February, 1969.
It appears that the appellant is a . partnership firm which was
constituted and commenced production in April 1967. Tne lirm
manufactures and sells nylon and hosiery goods such as socks, undergarments, and tbe like. It is registered with the Maharashtra State.
Directorate of Industries as a small scale industry.
Prior to April
1967, .all the partners of .the appellant were partners of a firm knOwn
as M/s. Hindustan I:Iosfory Factory. That firm again was constituted
and commenced business on and from 15th December, 1963, after
the dissolution of India I:Iosiery Factory on 14th December, 1963,
due to . differences amongst the partners.
On the same date, some
other partners of India I:Iosiery Factory constitu•ed another firm k,nown
as Stretchlon Private Ltd. While Stretchlon Private Ltd. continued to
function, I:Iindustan I:Iosiery Factory was closed in August 1966 and
the appellant constituted and commenced business in the name_ and
style of I:Iindustan I:Iosiery Industries with effect from 17th April,
1967, on which date another firm also commenced business. under
the name and style of I:Iindustan I:Iosiery Mills.
I.t appears that all
these three firms, namely, Stretchlon Private Ltd., the appellant and
the Hindustan I:Iosiery Mills are off shoots of tbe India I:Iosiery Fac•
tory with a complement of 800 workmen which was actually the pioneer in tbe industry.
The Sabha contended before the Tribunal that the consolidated
wages paid to the employees were extremely low.
According to the
Sabha, tbe time-rated workmen got as tow a wage of Rs. 2.50 per
day a.nd never higher than Rs. 3.50 per day.
The piece-rated wor·
ker9, who, according to the Sabha, are skilled workers, earned between Rs. 6J- and Rs. 7f- per day. ·The Sabha, therefore, claimed a
revision of the wages _of both the categories.
The appellant resisted the claim. According to tbe appellant,. it
is a new concern and has employed some of the workers of the Hin·
dustan Hosiery Factory. The average dat1y wages of the piece-rated
.iobs vary from Rs. 6J- to Rs. I 0120 per dav and are adequate. The
work involved in the jobs is not of highly skilled nature. The aopeltant further contended that the compaay was only of two years standing and the wages prud by it are higher than those earned bv em·
ployees of other concerns in the industry. Its financial position also
cannot be assessed as it is hardly two years old.
The demands are
excessive and the appellant cannot bear the additional burden· arising
-0ut of these demands.
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HJNDUSTAN HOSIERY INDUSTRIES v. F. H. LALA (Goswami, J.) ! :ios
The appellant has in its employme.nt about 250 workers. . The
Tribunal had before it a statement (Ext. C-2) filed by the appellant
showing the number of employees receiving wages below Rs" 51- per
day, another statement (Ext. C-3) with regard to the o'.her employees
and also the books filed by the appellant and observed that many
of the piece-rated and time-rated employees got as low a wage as
Rs. 4.60 per day and Rs. 2.50 per day respectively.
It,
therefore,
held that "on the face of it the wages provided for the workmen of
the factory appear to be inadequate and low and even in a loss·making
concern such wages have to be raised".
The appellant started its
business on 17th April, 1967.
The Tribunal found from the sta'.emcnt, Ext. U-1, filed by the Sabha regarding its financial position
that the appellant "earned substantial profits in the period of 8 months
in 1967 and in 1968". The Tribunal found that during' the period
of 20 months since April, 1967, the appellant has earned a profit
of Rs. 1,51,000j- in eight months of 1967 and Rs. 1,88,000j- in
1968.
These profits are after deduction of depreciation, interest and
.bonus.
The Tribunal observed that the appellant having a capital of
Rs. 2,28,000I- in 1967 and Rs. 3,42,0001- .in '1968 was prosperous
and. i's financial position was sound.
Tne Tribunal also observed
that "the wages paid to the employees on the piece-rate and the time.
rate are very low and require revision".
The appellant wanted the Tribunal to follow the wage scale
of
William Industries submitted by the appellant as per Ext.C-1.
But the
Tribuual in the absence of any details with regard to the fina11cial p0sition of ti1at company or its profit making capacity, did not consider it
appropriate to consider that as a comparable unit.
The Sabha, on the
·other hand, contended that the appellant was more prosperous than
Stretchlon Private Ltd. and produced an award of the Industrial Court
in the case of Stretchlon Private Ltd. dated 10th April, 1967, published
in the Maharashtra Gazette of 11th May, 1967. It appears that the
demand for increase of wages in the case of Stretchlon Private Ltd.
was mnde in 1966 within three years of its functioning from 15th
December, 1963, and before the Industrial Court in that case profit and
loss accounts for the years 1963-64 and 1964-65 were made available.
It further appears that in the said award the Industrial Court took
nole of the position of three other smaller concerns, some of which
were even running at a loss and still were paying wages higher than
the Stretchlon Private Ltd. The Industrial Court. therefore. awarded
Rs. 5/- per day "as a reasonable and fair minimum wage to the StretchJon employees of the lowest category in the Consumers' Price Index
bracket 621-630".
Although the Sabha in this case has asked for
different rates of basic wages for employees in five categories the Tribunal directed that the first 13 categories being the lowest potld workers
should receive Rs. 51- per day in the Index bracket 621-630.
The
nel;t group serial Nos. 14 to 19 were given Rs. 5.50 per day in the
same l>ra~ket, serial Nos. 20-21 were given Rs. 7/- per day, serial
No. 22 Rs. 7.50 per day and serial No. 23 Rs. 8.50 per day in the
af'?resaid bracket.
The Tribun.al also. granted for every rise of 10
pomts or part thereof, abo~e the mdex bracket 621-630, dearness allowance at the rate of 10 paise per .day.
Wi!h regard IQ the claim for
306
SUPR~ME COURT 11.EPORTS
[ 1974] 3 S.C.R.
5()% rise in piece-rates, the Tribunal only granted 30% in the Index
bracket 621-630 and the same dearness allowance as above. The
Tribunal also granted the benefits retorspectively with effect from I st
February, 1969.
It is contended on behalf of the appellant that the Tribunal erred
in ignoring the difference between minimum wage and fair wage.
It
is submitted that tlie Tribunal was in fact granting fair wage and did
not take into account the well-settled relevant factors into consideration
in making the award.
The appellant emphasises that the Tribunal
absolutely ignored the aspect of the capacity of the appellant to bear
the burden of the additional rise in wages on account of this award. The
appellant also submitted that the Tribunal ought not to have ignored
the settlement with regard to wage arrived at by the Hindustan Hosiery
Mills with the Sabha.
lly that settlement, the said partnership firm
constituted by the other group of partners of Hindustan Hosiery
Factory agreed with the Sabha to give an increase of Re. 1 /" per day
in the wages of the workers getting Rs. 5/- per day or less and an increase of 50 paise pe~ day in the wages of the workers getting more
than Rs. 51- per clay.
The appellant was prepared to allow this increase which would have imposed an additional burden of Rs. 56,022/-
pcr year
The respondent, on the other hand, submits that the Tribunal has
awarded only minimum wage.
Even if it is '15Sumed' that the wage
awarded is a little higher than the minimum wage, it is certainly lower
than the lowest level 'of the fair wage.
The learned counsel submits
that in order to allow. the wage increase the Tribunal had before it
materials from _the evitlence furnished in the Stretchlon award as well
as the trend of wage rates with which the Tribunal must be expected
to be familiar in the region.and in the industry.
It is well seJtled that no industry can be allowed to carry on its
business if itis unable to pay the minimum wage to its employees. The
iiluustry with which we are concerned is, however, not a scheduled industry in Which the State Government has fixed any minimum wage
under the Minimum Wages Act.
The appellant submitted from certain
GaZ.elte Notifications the minimum rates of wages prescribed by the·
State Government fu case of some eight different industries between
the years 1969 and 1972 where the monthly wages have been fixed
between Rs. 90/- and Rs. 128/- per month.
The appellant submits
that there is no justification whatsoever for allowing the present increase of wages without following any principle and even higher than
the statutory minimum wage fixed in respect of other industries in the
Statec In the written statement filed before the Court the Sabha·stated
in paragraphs 5 and 6 .s· follows :-
"5. The present wages of botli the piece-rated and timerated workers are excessively low and are much lower
thali those considered to be the absolute minimum payable by any employer to his workers in the Bombay
Region.
These wages are also much lower than those
paid by comparable concerns in the Industry.
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HINDUSTAN HOSIERY INDUSTlllES v. F: H. LA'LA {Goswami, J.)
307
6. The Second Party Concern is well in a position to bear
the additional burden that may be placed upon it by the
revision of the wages and the grant of dearness allowance as demanded by the Sabha".
The appellant, however, in para 5 of their written statement before the
Tribunal stated that it could not "bear the additional burden which
may arise on account of the revision of wages and D.A. as demanded
by the first party and submits that for awarding wages and also D.A.
it is not only the. ability but also the stability of the concern which
shpuld be considered by this Honourable Court".These being the rival
contentions of the parties before the Tribunal, it was required to consider whether it was a ease of bare minimum wage or some thing higher
than it.
From a perusal of the award, we are clearly of opinion that
the Tribunal 'was considering the Gase from the point of view of grant-
; ng something higher than the subsistence or bare minimum
wage
bordering on fair wage.
We have reached this conclusion since the
yardstick of the present award is the Stretchlon Award which was
obviously seeking to determin.e rather some kind of fair wage as will
be clear from the following extract from that Award :-
"It (the company) can, therefore offer to pay higher
minimum wages to lowest category of employees.
On due
consideration of all the relevant facts and circumstances I find
that Rs. 51- per day should be the reasonable and fair minimum wage to the lowest category of employees ·of the company".
Coming to the· piece;ates also the Tribunal di.d not give
any
specific reasons for awarding 30% increase as against the demand of
the Sabha. fru: 50% rise in addition to Dearness Allowance.
The
Tribunal, however, observed that "this increase would give adequate
average daily earnings to the piece-rated employees. This increase
would bring the emoluments near the level of minimum '\"age payable
in the region and it would not place a very heavy burden on the
employer~'.
·
We will now consider the principles settled by this Court in the
matter of wage fixation. In Express Newspapers (Private) Ltd., and
Ant>!IU!r v. TM Union of India and 0tMrs(1 ), this Court was considering in an exhaustive judgment, inter alia, the concept of minimum
wage, fair wage and living wage and approvingly quoted from page 9,
para 10, of the Report of the Committee on Fair Wages, to the following effect:
"We consider that a minimum wage must provide not
merely for the bare sustenance of life but for the preservation of the efficiency of the worker.
For this purpose, the
minimum wage must also provide for some measure of education, riiedical· requirements ·and amenities".
This Court further observed :
''There is also a distinction between a bare subsistence
or toinimum wage .and a statutory minimum
wage.
The
(I) [1959] S.C.R. 12. 83-86.
308
SUPREME COURT REPORTS
[ J 974] } S.C.R.
former is a wage which would be sufficient to cover the bare
physicai needs of a worker and his family, that.is a rate which
hasgot to be paid to the worker irrespective of the capacity
of the industry to pay. If an industry is unable to pay to
its workmen at least a bare minimum wage it has no right to
exist".
(See Messrs Crown Aluminium Works. v.
Their
Workmen(').
It was further observed :
"The statutory minimu,m wage however is the minimu1n
which is prescribed by the statute and it may be higher than
the bare subsistence or minimum wage, providing for some
measure of education, medical requirements and amenities,
as contemplated above. . . . . . . . . . While · the lower limit
of the fair wage must obviously be the minimum wage, the
upper limit is equally .. set by what may _broadly be called
the capacity of industry to pay. 'fhis will pepend not only
on the present economic position of the industry but on its
future prospects ........ It will be noticed that the "fair
wage" is thus a mean between the living wage and
the
minimum wage and even the minimum wage contemplated
above is something more than the bare minimum or subsistence wage which would. be sufficient to cover the bare
physical needs of the worker and his family, a wage which
woul<) provide also for the preservation of the efficiency of
the worker and for some measure of education, medical requirements and amenities" .............. This concept of
minimum wage is in harmony with the advance of thought
in all civilised countries and approximates to the statutory
minimum wage whkb the State should strive to achieve
having regard to the Directive Principle of State Policy mentioned above".
ft was further observed :
"It will also he noticed that the content of the expression
"minimum wage", *fair wage' and 'living wage' is not fixed
and static.
It varies and is bound to vary from time to time.
With the growth and development of national economy, living
standards would improve and so would our notions about
the respective categories of wages expend and be more progressive".
In Kwnani Metals & AJloys Ltd. v. Their Workmeri( 2 ),
this - Court
observed as follows :-
. "Fixation of a wage-structure is always a delicate task
because a balance has to be struck between the demand of
social justice which requires that the workmen should receive
their proper share of the national income which they help to
produce with a view to improving their standard of living,
and the depletion which every increase in wages makes. in
the profits as this· tends to drivert 'capital from industry into
other channels thought to be
more profitable.
The task
·-(I) [t95B] S.C.R. 651 quoted in [t959] S.c.R. !2. (2) 11958] 2 S.C.R. i63, 467.
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HINDUSTAN HOSIERY INDUSTRIES v. P. H. LALA (Goswami, /.)
309
is not rendered any the easier because conditions vary from
region to region, industry to industry and
establishment
to establishment.
To cope with these
differences certain
principles on which wages are fixed· have been stated from
time to time by this Court. Broadly speaking the first principle is lhat there is minimum wage
which, in any event,
must be paid, irrespective of the extent of profits, the financial condition of the establishment or the availaliility of
workmen on lower wages. This minimum wage is independent of the kind of industry and applies to all alike big or
small. It sets the lowest limit below which wages cannot be
allowed to sink in all humanity.
The •econd principle is
that wages must be fair, that is to say, suflicient!Y high t?
provide a standard family wi~h food, sheJte:, clothmg, medical care and educal!On of children appropriate to the work1nan but not at a rate exceeding his wage earning capacit.Y
in the class of establishment to which he belongs. A fair
wage is thus related to the earning capaci;y .and th~ :ivorkload. It must, however, be realised that _fair. wa~e .ts not
'iiving wage' by which is meant a wage which ts sufficient ~o
provide not only the essentials abov~-:nentioned . but a fatr
measure of frugal comfort with an ab1hty to provide .f'!r old
age and evil days.
Fair wage lies between the. ;nm1mum
wage, which must be paid in any event, and the hvmg wage,
which is the goal"
In Hydro (Engineers) (Private) Ltd. v. Their Workmen,(') this
Court obser.ved as follows : -
"lt is thus clear that the concept of minimum wages does
take in the factor of the prevailing cost of essential commodities whenever such minimum wage is to be fixed.
The
idea of fixing such wage in the light of cost of living at a
particular juncture of time and of neulralizing the rising
prices of essential commodities by linking up scales of minimum wages with the cost of living index cannot, therefore,
be said to be alien to the concept of a minimum wage".
In M /s. Jaydip Industries, rhana v. The Workmen,(') this Court
rctcrred to the observation in an earlier decision of this Court in U.
Unichoyi v. State of Kera/a, (3 ) as follows :-
"Sometimes the minimum wage is described as a bare
minimum wage in order to distinguish it from the wage
structure which is 'subsistence plus' or fair
wage, but too
much emphasis on the adjective 'bare' in relation to the minimum wage is apt to lead to the erronous assumption that
the maintenance wage is a wage which enables the worker
to cover his bare physical needs and keep himself just above
starvation.
That clearly is not intended by the concept
of minimum wage.
On the ·other hand, since the capacity
of the employer to pay is treated as irrelevant, it is but right
il)[T969]1T. i..-J:-713; 716..
(2) [[19721 IL. L. J. 244, 217.
(J) [1902] [ S. C.R. 957 quoted in [1972] IL. L. J. 244, 247.
310
SUPREME COURT REPORTS
[ 1974 l 3 S.C.R.
that. no addition should be made to the components of the
A
minimum wage near the lower level of the fair wage but the
conten~s of this concept must ensure for the cmpl~yec not
only his susten~nce and that of his family
but must also
preserve his efficiency as a worker".
Jn M/s Unichem Laboratories Ltd. v
The
Workmen(')
this
Gourt further observed as follows :-
·
B
."In the fixation of wages and dearness allowance the legal
position JS well
established that it has to be done on an
1~dust_ry-cum-region. basis having due regard to the financial
capacity of the umt under consideration. . . . . . Industrial
adjudication should always take into account, when revising
the wage structure and granting
dearness allowance the
problem of the additional burden to be
imposed o~ the
employer and ascertain whether the employer can reasonably be called upon to bear such burden ...... As pointed
out in Greaves Cotton and Co. and others v. Their Workmen (') . One of .. tbo principles to be adopted in fiixing wages
and dearness allowance is that the Tribunal should take into
account the wage scale and dearness allowance -prevailing in
comparable concerns carrying on the same industry in the
region".
From an examination of the aecisionS of this Court, it is clear
that the floor level is the bare mir)imum wage or subsistence wage.
Jn lixing this wage, Industrial Tribunals will have to consider the position from the point of view of the worker; the capacity of the employer to pay such a wage being irrelevant.
The fair wage also most
take note of the economic reality of the situation and the minimum
needs of the worker having a fair-sized family with an eye to the pre~
scrvation of his. efficiency as a worker.
Wage fi0ation is an important subject in ·,ny social welfare progrc,mme.
Wage cannot be fixed in a vacuum and has necessarily to
take note of so many factors from real life a worker lives, or is reaso·
nably expected to live or to look forward to with hope and fervency
ir..the entire social context. It is obvious that some principles have to be
evolved from the conditions and circumstances of actual life.
Piece rate is what is paid of results or
outturn of \VOrk
which
is nften described as a "task".
There is greater consideration
to
quantity in fixin·g piece rates in some particular types of work
in
some indus:\rics with a guaranteed minimum. The
same standatd
mav not b, appropriate in all types of piece work
With reference
to particular work the importance of man rather than the machine
enwloyed may have to be dealt with differently. Even in piece rates
it will be necessary to look aroll!ld to find some correlation with time
rates of the same or similar class. of workers, for example, the contribution of the worker to the job, the nature of tile work. the part
(Ii [1972] 1 L L. J.
57~, 590, 591.
m [19641 S S. C.R. 362 quoted in [1972] I L. L. J. 576.
c
D
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B
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D
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F
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HINDUSTAN HOSIERY INDUSTRIES v. F. H. LALA (Goswami, /:) 311
pla)ed by the machine, the incentive Io work and above all protection against any creation of industrial unrest bec.ause of the existence
side by sid' o[ two categories of workers, particularly if there is no
pbssibility ol transfer of labour from one type of work to the other
from time to time. Again tliere may be some
work where special
skill of the worker with or without machine may be necessary and
that factor will have to be then considered. It will vary from indus-·
try to industry and from the process to another. No hard and fast
rule can be laid down nor is it possible or helpful. The Tribunal, in
"" industri:il adjudication. will have to see that piece-rates do not
drive workers to fatigue to the limit· o! exhaustion and hence will
keep an eye on the time factor in work. Then again a guaranteed
minimum mav also
have to be provided so that for no fault of a
diligent worker he docs not stand
to lose on any account. There
may be a misty penumbra which has got to be pierced through uponal! available materials on record and also on what the Tribunal, in
fairness. can lav its hands pn, with notice to the parties, for the purP<l!>e of fixing the piece-rates balancing all aspects.
We have only
indicated broadlv the bare outlines o! approach in a inatter so involved and sensitive as wage fixation particularly when no one at
the orcscnt time can shut one's eyes to the rising spiral of prices of
essential c-0mmodities.
The central figure in the adjudication, how-·
ever. is the wage-earner who should have a fair deal in the bargain
in a real sense as far as can be without at the same time ignoring
the vital interests of the iiidustrv whose viability and prosperity are
also the
mainstay of labour.
How the various competing claims
have· to be balanced in a given case should mainly be the function
of an imoortia! adjudicator in an industrial
proceeding unless the
legislature chooses to adopt other appropriate
means and methods.
Article 136 of the Constitutiord!oes not create a right of appeal in
favour of anv person.
It conf'ers power on the Court which should
not he so exe1cised as to convert the Court into a Court of appeal.
"Industrial Disputes Act is intended to be a seif-contained one and·
it seeks to achieve special justice on the basis o! collective bargaining. conciliation and arbitration'.. Awards are _given on circumstances
occuliar 10 each dispute and th.e tribunals are, to a large extent, free·
from the restrictions of technical consitlerations imposed on courts.
A free and liberal exercise of the power under Article 136 may mate•
riallv affect the fundamental basis of such decisiors. namely. quick
solution to such
disputes to . achieve industrial
peace.
Though
Article 136 is couched in widest terms, it is necessary for this Court
to exercise its discretionat'V jurisdiction only in cases where awards
arc made in violation of the principles of natural justice, causing
substantial and iuave injustice to oarties or raises an imoortant princiole of industrial law requiring elucidation and
final
decision by
this Court or disclosure~ such other exceptional or special circwnstances which merit the CC!Usideration of this Court". per Subba Rao.
J. in IBeneal Chemical and
Pharmaceutical Works Ltd. v. Thrir
WorkmPn(I). None of the_ arj!11ments raised by the appellant sllould·
br ~ufficient to persuade the Court to inteqlOse relief in its fnvour·
(I) (1959] Supp. 2·s: c. R: t36 at 140.
.312
SUPREME COURT REPORTS
[ 1974 J 3 S.C.R.
'°n. the facts and circumstances_ of this case. It is not quiic correct
to say that the Industrial Court bas not followed the principles of
wage-revision expounded by this Court.
The lndustrial Court ha;;
·taken into account the prevailin_g minimum wa_ge rates in the region,
.and the. capacity of the appellant lo bear the burden of th~ increased
wages.
Counsel for the appellant could not show to us that the
·wall" rates fixed by the lndustri_al Court arc unfair for the appellant
. or thrit it cannot bear the load of increased wa.ges. -The wages
of
the piece rated workmen had to be increased in line
with the in-
.creased wages of the time-rated workmen with· the object of avoiding
.discrimination and heart-burning among
workers and maintenance
of industrial peace among them.
Taking a comprehensive view of
the facts and circumstances of the case, we are satisfied that
no
intervention is called for 'Yith the award.
In the result, the appeal
is dismissed.
We will. however, make no order as to costs in thio
.appeal.
:S.B.W.
Appeal llis111isfed.
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