# MfS. VOLTAS LTD v. J. M. DEMELLO & ANR

- **Citation:** [1971] Supp. 1 S.C.R. 865
- **Court:** Supreme Court of India
- **Decided:** 1971-07-21
- **Case number:** Civil Appeal No. 478 of 1970
- **Bench:** J. M. Shelat, A N. Ray
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mfs-voltas-ltd-v-j-m-demello-anr-5452
- **Pages:** 14

## Headnote

B
Industrial Disputes Act, 1947, ss. 33C(2)-Labour Court as executing
court whether can go into history of dispute in order to construe scop~ of
award.
Constitution of ITtdia; Art. 226-High Courts cannot interfere when
order of labour court under s. 33C(2) of Industrial Disputes Act, 1947 is
within its jurisdiction and does not suffer from any apperent error.
C
Respondent No. I joined the service of M/s. Volkhart Bros. on March
3, 1930.
On the merger of that concern with the appellant·company in
Septemloer 1954, he became the employee of the latter. In September 1954,
the appellant-company took over the staff of MI s. Volkhart Bros. on the
same terms and conditions as were applicable to them when they were the
employees of Yolkhart Bros. During the period when respondent I was in
D
the employment of M /s. Volkbart Bros. he was governed by a scheme of
dearness allowance framed with the consent of the parties and incorporated
in the Bakhale Award dated May 26, 1951. The scheme provided bvth
maximum and minimum dearness allowance viz. Rs. 165 and Rs. 60 respectively, and subject to them the dearness allowance payable was 75% for
the first hundred, 37!% for the second hundred and 18% for the oalance
of the wages. By a circular dated November 16, 19S3 the maximum dearness allowance Jlayable was increased to Rs. 300, On August 18, 1956 a
E
charter of demands was served on the company on 'behalf of the workmen. Demand No. S was for revision of the scheme of dearness allowance_
The parties arrived at a settlement dated August 30, !9S7 under which
the company agr~d to pay dearness allowance at increased rates, theminimum being raised to Rs. 75. There was no reference as to the maxi··
mum either in demand No. S or in the settlement. According to the com ..
pany the maximum was raised from Rs, 300 to Rs. 3SO by a circular dated
Marcltl2, 19S9. On January 16, 1961, !he union served the c:Ompany wit!
F
a fresh charter of demands, demand No. 9 whereof related to dearnes•
allowance. Higher rates were demanded but there was no reference to
a maximum, The charter of deml\nds was referred to the tribunal presided over by Mr. Meher whose award dated February 18, 1963 made certain
changes in the scheme without referring to a maximum. On December
17, 1964 respond~! No. I filed an application to the Labour Court under
s. 33C(2) for computing the benefit due to him in respect of dearness allowG
anco payable to him. His claim for dearness allowance of more than RL
3SO was resisted by the company on the ground that that was the maximum fixed under the earlier scheme· which continued to subsist since the
Moher Award had not made any change in this respect. The Labour
Court after &oing into the full history of the matter, since tho llakhalo
· Award, decided !hat the company was right in limiting the dearness allowance to Rs.' 3SO. The High Court in a writ petition filed by respondent
No. I held that Labour Court fell into a grosa error in examining the preH
vious history as to ·th• dearness allowance which was irrelevant. It directed
the Labour Court to compute the dearness allowance without any reference
to tho maximum. In the company's appeal by special leave,
55-1 S.O.India/71
866
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SUPREME COURT REPORTS
[ 1971] SUPP. s.c.R
HELD: Proceedings under s. 33C(2) are analogous to execution proceedings and a Labour Coun called upon to compute benefits claimed
by a wor~man is in the position of an executing court and as sach competent to mterpret an award where there is a dispute as to the rights there.
under or as. t? its correct interpretation. Although it cannot go behind
the award, 1t ts nevertheless competent to construe the award where it is
_ambiguous and to ascertain its precise meaning, for unless that is done,
1t cannot enforce the award when it is called upon to do so by an application under s. 33C. [874A-C]
Chief Mining Engineer, East India Coal Co. Ltd. v. Raffteshwar, [1968]
I S.C.R. 140, Central Bank of India v. Rajagopalan, [1%4)

## Text

865
MfS. VOLTAS LTD.
A
v.
J. M. DEMELLO & ANR.
July 21, 1971
[J. M. SHELAT AND A N. RAY, JJ.]
B
Industrial Disputes Act, 1947, ss. 33C(2)-Labour Court as executing
court whether can go into history of dispute in order to construe scop~ of
award.
Constitution of ITtdia; Art. 226-High Courts cannot interfere when
order of labour court under s. 33C(2) of Industrial Disputes Act, 1947 is
within its jurisdiction and does not suffer from any apperent error.
C
Respondent No. I joined the service of M/s. Volkhart Bros. on March
3, 1930.
On the merger of that concern with the appellant·company in
Septemloer 1954, he became the employee of the latter. In September 1954,
the appellant-company took over the staff of MI s. Volkhart Bros. on the
same terms and conditions as were applicable to them when they were the
employees of Yolkhart Bros. During the period when respondent I was in
D
the employment of M /s. Volkbart Bros. he was governed by a scheme of
dearness allowance framed with the consent of the parties and incorporated
in the Bakhale Award dated May 26, 1951. The scheme provided bvth
maximum and minimum dearness allowance viz. Rs. 165 and Rs. 60 respectively, and subject to them the dearness allowance payable was 75% for
the first hundred, 37!% for the second hundred and 18% for the oalance
of the wages. By a circular dated November 16, 19S3 the maximum dearness allowance Jlayable was increased to Rs. 300, On August 18, 1956 a
E
charter of demands was served on the company on 'behalf of the workmen. Demand No. S was for revision of the scheme of dearness allowance_
The parties arrived at a settlement dated August 30, !9S7 under which
the company agr~d to pay dearness allowance at increased rates, theminimum being raised to Rs. 75. There was no reference as to the maxi··
mum either in demand No. S or in the settlement. According to the com ..
pany the maximum was raised from Rs, 300 to Rs. 3SO by a circular dated
Marcltl2, 19S9. On January 16, 1961, !he union served the c:Ompany wit!
F
a fresh charter of demands, demand No. 9 whereof related to dearnes•
allowance. Higher rates were demanded but there was no reference to
a maximum, The charter of deml\nds was referred to the tribunal presided over by Mr. Meher whose award dated February 18, 1963 made certain
changes in the scheme without referring to a maximum. On December
17, 1964 respond~! No. I filed an application to the Labour Court under
s. 33C(2) for computing the benefit due to him in respect of dearness allowG
anco payable to him. His claim for dearness allowance of more than RL
3SO was resisted by the company on the ground that that was the maximum fixed under the earlier scheme· which continued to subsist since the
Moher Award had not made any change in this respect. The Labour
Court after &oing into the full history of the matter, since tho llakhalo
· Award, decided !hat the company was right in limiting the dearness allowance to Rs.' 3SO. The High Court in a writ petition filed by respondent
No. I held that Labour Court fell into a grosa error in examining the preH
vious history as to ·th• dearness allowance which was irrelevant. It directed
the Labour Court to compute the dearness allowance without any reference
to tho maximum. In the company's appeal by special leave,
55-1 S.O.India/71
866
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SUPREME COURT REPORTS
[ 1971] SUPP. s.c.R
HELD: Proceedings under s. 33C(2) are analogous to execution proceedings and a Labour Coun called upon to compute benefits claimed
by a wor~man is in the position of an executing court and as sach competent to mterpret an award where there is a dispute as to the rights there.
under or as. t? its correct interpretation. Although it cannot go behind
the award, 1t ts nevertheless competent to construe the award where it is
_ambiguous and to ascertain its precise meaning, for unless that is done,
1t cannot enforce the award when it is called upon to do so by an application under s. 33C. [874A-C]
Chief Mining Engineer, East India Coal Co. Ltd. v. Raffteshwar, [1968]
I S.C.R. 140, Central Bank of India v. Rajagopalan, [1%4) 3 S.C.R. 140,
152 and Bombay Gas Co. Ltd. v. Gopal Bhiva, (1964) 3 S.C.R. 709, 715716, referred to.
In th• present case the Labour Court had and was competent to
decide the question whether there was a ceiling in the existing scheme_
and if so, whether it was deleted by the Tribunal, in other words, whether
the demand was for doing away with the existing scheme and substituting
it by a fresh scheme which bad no ceiling. For that purpose, the Labour
Court had necessarily to examine demand No. 9, the reference, the pleadings of the parties, and lastly, the Moher Award, and incidental to such
an inquiry it had to examine the question whether there was a ceiling io
the scheme existing at the time of that demand and reference.
In doing
so the Labour Coun had to examine the various stages the dearness allowance scheme bad from time to time gone through. [876H]
Ramakrishna Ramnath v. Presiding Officer, Labo11r Court, Nagpur,
[1970) 2 L.L.J. 306, referred to.
[The Court examined the facts and found the Labour Court's conclusions justified on merits. It then went on to bold : ]
If from the evidence before it the Labour Court came to tile conclusion that a ceiling existed in the scheme of dearness allowance prevail ..
ing in the company at all the various stages and that deletion of such a
ceiling was not the subject matter of either demand No. 9 or of the refer-
~nce before the Meher Tribunal, and that its award was confined to the
revision only of the existing scheme in respect of certain matters, it was
not possible to say that the decision of the Labour Court suffered from any
error apparent on the face of its decision in respect of which a certiorari
could Justifiably be issued under Art. 226.
There was no question of
any estoppel also against the company against its raising the question of
the ceiling in view of the finding of the Labour Court that the question
of the ceiling was not the subject-matter of the reference before the Meber
Tribunal. Such a conclusion of the Labour Coun could not be interfered
with by the High Coun on any one of the well known grounds on which ·
only such interference is permissible. [878A]
Syed Yakoob v. K. S. Radhakrishnan, [1964] 5 S.C.R. 64, referred to.
The appeal must accordingly be allowed.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 478 of
1970.
Appeal by special leave from the judgment and order dated
June 30, 1969 of the Bombay High Court in Special Civil Application No. 889 of 1966.
VOLTAS v. J.M. DEMELLO (Sht/at, J.)
867
S. V. Gupte, A. K. Verma and J.B. Dadachanji, for the appelA
!ant.
V. M. Tarkunde, D. V. Patel, K. L. Hathi and P. C. Kapoor,
for respondent No. I.
The Judgment of the Court was delivered by
Shelat J.-This appeal, by special leave, is against the judgment of the High Court of Bombay allowing the writ petition
filed by respondent 1 against the dismissal by the Labour Court
of his application for dearness allowance made against the appellant-company under s. 33C(2) of the Industrial Disputes Act, 1947.
The facts leading to the said application are as follows :-
Respondent 1 first joined the service of MI s. Volkart Bros.
on March 3, 1930. On merger of that concern with the appellantcompany in September 1954, he became the employee of the
latter. In September 1954, the appellant-company took over the
staff of MI s. Volkart Bros. on the same terms and conditions as
were applicable to them when they were the employees of Volkart
Bros. During the period when respondent 1 was in the employment of Mis. Volkart Bros., he was governed by a scheme of
.Dearness Allowance framed with the consent of the parties and
incorporated in an award (hereinafter referred to as the Bakhale
Award) dated May 26, 1951 in l.T. No. 76 of 1950. The scheme
provided both maximum and minimum dearness allowance, viz.,
Rs. 165 and Rs. 60 respectively, and subject to them the dearness
allowance payable was 75% for the first hundred, 37!-% for the
sec~nd hundred and 18 % for the balance of the wages.
The said scheme was altered by a circular, dated November
16, 1953. The two principal changes in the altered scheme were:
(!) an increase in the minimum and maximum from Rs. 60
and Rs. 165 to Rs. 70 and Rs. 300 per month respec- ·
tively, and
(2) linking the dearness allowance to the cost of living index
in the bracket 371-380 and providing for adjustment of
dearness allowance by certain percentages whenever the
index moved by ten points.
011 August 18, 1956, a charter of demands was served on the
company on behalf of the workmen. Demand No. 5 related to
dearness allowance and was as follows:
"The scheme of dearness allowance at present in
force should be revised on the folloWing lines with effect
from !st January, 1956."
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SUPREME COUl.T REPORTS
[1971] SUPP. s.c.R.
Then followed the lines on which the scheme was sought to be
revised, namely, the percentages at which the dearness allowance
should be paid. The parties arrived at a settlement dated August
30. 1957, under whi.ch the company agreed to pay dearness allowance at 100% on the first hundred with 4% on every ten points'
movement in the index, 50 % on the second hundred V'lith 2 % on
every ten points' movement in the index and 25 % for the balance
with I% on every ten points' movement in the index of cost of
living. The minimum dearness allowance was raised to Rs. 75.
It may be noted that there was no reference as to the maximum either in demand No. 5 or in the settlement. The case of
respondent I was that the scheme of dearness allowance as prevalent till then was abandoned, a fresh scheme was devised in
which there was no provision for any maximum and it was, therefore, that no reference to any such maximum was made in the
settlement.
The company's case, on the other hand, was that
the scheme of dearness allowance was not given up, that the demand was only for revision of the existing scheme, viz., to the
extent of revising the percentages only on the three slabs of wages,
and therefore, the settlement mentioned the alterations made in
the scheme, but not the maximum as there was neither a demand
for its deletion, and consequently, no settlement regarding it. .
According to the company, the maximum was raised from
Rs. 300 to Rs. 350 by a circular, dated March 12, 1959. That
circular was as follows :
"It has been decided to raise the present maximum
Dearness Allowance payable to Rs. 350 per month which
will apply uniformly to all Offices in India with effect
from !st April 1959.
Dearness Allowance will continue to be paid on the
usual basis at the rates applicable at each place subject
to the maximum stated above.
•
•
•
•
.
..
The case, however, of respondent I was that the Increase in the
maximum amount of dearness allowance applied only to tile
officers of the company and not to the workmen, that no notice
of such a change was ever served upon the union, and that there
was in fact no change made in 1959 in the scheme of dearness
allowance, which remained without any provision as to the maJiimwn.
VOLTAS v. ], M. DEMELLO (She/at, J.)
On January 16, 1961, the union served the company with a
fresh charter of demands, demand No. <f Whereof related to dearness allowance. That demand was in the following wo¢s :
"The scheme of Dearness Allowance at present in
force should be revised on the following lines with effect
from 1st October 1960 :-
When the index is in the bracket
351-360,
for the 1st Rs. 100 of the basic
pay/wages ................................. 100%;
variation 5 %
for the 2nd Rs. 100 of the basic
pay /wages .. .. .. .. .. .. .... .. .. .. .. .... .... .. .. 50% ;
variation 2! %
for the balance .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 25 % ;
variation 1!%
869
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Minimum Rs. 90; variation Rs. 3."
D
The charter of demands was ,referred to the tribunal presided
over by Mr. Meher who gave his award (hereinafter referred to
as the Meher Award), dated February 18, 1963. Paras 33 to 35
of the award dealt w'ith dearness allowance. Para 33 first set out
the union's complaint that "the existing dearness allowance
E
scheme" did not adequately neutralise the rise in the cost of living. It then set out the existing scheme as follows :
Bac;ic wage
For the first JOO
.
For the second I 00.
For the balance
"For the index number 371-380
Dearness
allowance
100%
50%
25%
Variation for
IO points
4%
2%
1%
Minimum dearness allowance Rs. 75~ variation for 10 points Rs. 2."
.
Para 34 set out the company's defence. Para 35 set out the
changes made by the award in the following terms :
"I revise l!he existing scheme of dearness allowance
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as follows :-
H
The variation for the first slab should be 5 per cent,
for the second 2! per cent, and the third Ii per cent, and
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on the minimum dearness allowance Rs. 3. The mini·
mum dearness allowance at cost of living index 371-380
should be increased from Rs. 75 to Rs. 77. The dearness
allowance should be revised at this rate from !st June
1962 ...... "
On December 17, 1964, respondent I filed an application to
the Labour Court under s. 33 C(2) for computing the benefit due
to him in respect of dearness allowance payable to him under the
Meher Award and claimed that the dearness allowance due to
him was Rs. 360 for June-July, 1964, Rs. 382.50P. for
August
1964, Rs. 393.75P. for September-October, 1964 and Rs. 405 for
November 1964 in accordance with the index of cost of living
declared by the Maharashtra Government on the recommenda·
lions made by the Lakdawala Committee. His plea was that the
company was not entitled to limit the dearness allowance due to
him at Rs. 365 per month on the plea that the existing dearness
scheme as revised by the Meher Award provided for the maximum at Rs. 365 per month and that he was, therefore, entitled to
that amount only.
The claim of respondent I was denied by the company. The
company's case was that under the scheme of dearness allowance
prevailing in the company there had always been a maximum
ever since the Bakhale Award, that that' maximum was raised
from time to time and since April I. 1959 it had been Rs. 350 per
month. Its case further was that the maximum was not in any
way affected by the Meher Award, that the charter of demands
which occasioned that Reference claimed revision of the existing
dearness allowance
scheme on certain points only. namely, a
revision in the percentage variations and an increase in the mini·
mum from Rs. 7 5 to Rs. 90, and that therefore, the rest of the
scheme including its provision for the maximum of Rs. 350 per
month remained intact. The company's case was that since the
demand and the reference were limited to the percentage variations only, the Meher Tribunal could not have made any other
changes, such as the deletion of the maximum, for. such a change
would have been beyond its jurisdiction.
The question, thus, before the Labour Court was : what exactly' did the Meher Award decide in relation to the question of dear·
ness allowance? There can be no doubt that there was an acute
controversy between the parties :
(I) as to whether there was or not any provision
· for the maximum in the scheme prevailing before the
Meher Award,
(2) if there was, whether that Award only revised
it in terms of para 35 thereof or whether it introduced
VOLTAS '"J.M. DEllELLO (She/at, J.)
altogether a fresh scheme which had a provision for the
minimum but not for the maXimum.
In dealing with these questions, the Labour Court, in an elaborate
judgment, went, into the history of the dearness allowance scheme
prevailing in the company ever since the Bakhale Award on the
basis of the evidence led by both the parties and ultimately held
that a maximum was always provided for in the said scheme,
that the scheme which was prevailing immediately before the
Meher Award contained a provision for such maximum, viz.,
Rs. 350, that the Meher Award was concerned only with the
percentage variations and the increase In the minimum existing till
then and as neither the demand nor the reference was concerned
with the maximum, the award did not and indeed could not deal
with it and therefore left it untouched. In the result, the Labour
Court dismissed the application holding that the company was
right in paying dearness allowance at Rs. 350 per month to
respondent I.
Respondent I, thereupon, filed a writ petition in the High
Court contending :
(!) that the Labour Court, as an executing court,
had merely to implement the Meher Award which had
fixed no maximum; that it exceeded its jurisdiction when
it considered the previous stages of the scheme of dearness
allowance and the background for holding that the
award had not dealt with or 'interfered with the existing
maximum;
·
(2) that as regards the
workmen, no maximum
dearness allowance had been prevalent at the time of the
charter of demands dat~d January 16.1961, that demand
No. 9 therein was for the entire revision of the scheme
which was then prevalent in the company and that the
Meher Tribunal made its award providing therein an
altogether new scheme.
The company, on the other hand, contended that the Labour
Court had jur.isdication, when called upon to compute the benefits
under the award, to interpret that award in order to ascertain
what it had done and the benefits it had conferred. In doing so,
if It came to findings of fact, those findings could not be interfered
with by the High Court under its writ jurisdiction. It also submit·
ted that in any event on a true construction of the award read
with demand No. 9, the reference and the pleadings of the parties,
the conclusion of the Labour Court that the Meher award did
not deal or Interfere with the existing maximum was correct.
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In considering these rival contentions the High Court first
set out the five stages of development which had occurred in the
history of the company in the matt1:r of dearness allowance and
which had been considered by the Labour Court, viz.,
(!) the Bakhale Award, d'ated May 26, 1951, the
features whereof were :
(i) a provision for the maximum and the minium,
(iiD percentages of
neutralisation on three slab&
in the wages ;
(2) the circular of November 16, 1953 by which
dearness allowance was linked with the index of cost of
living, the basic bracket of which was
371-380, the
adjustment of the dearness allowance on the movement
of the index by IO points, and the maximum raised to
Rs. 300 per month;
(3) the charter of demandi: dated
18-8-1956 and
the agreement, dated August
13, 1957 by which the
existing scheme was revised and the minimum and the
percentages of variations were revised ;
(4) the circular, dated March 12, 1959, by which
the maximum was again raised from Rs. 300 to Rs. 350
and which inter alia stated:
(i) that the increase would apply unWormly "to
all offices in India", and
(ii) that dearness allowance "will continue to be
paid on usual basis at the rates applicable at each place
subject to the maximum stated above." and
(5) the charter of demands and in
particular
demand No. 9 and the Meher Award.
The High Court then observed that the charter of demands, the
Reference to the Tribunal of Demand No. 9 and the pleadings
before the Tribunal did not refer to any existing maximum and
that according to the award the existing scheme of dearness
allowance was that which the Tribunal set out in para 33 of its
award, i.e., without any maximum being there mentioned and that
it was such a scheme which the award revised. Relying on the
absence of any reference to any maximum, the High Court negatived the company's contention that th1! demand was for alteration
of the existing scheme only. That being so, the company, accord·
ing to the High Court, ought to have brought forward as its defence
case that there was an existing maximum, which should be retained in the scheme, and not having done so, the company "must
l '
VOLTAS v. J.M. DEMELLO (Shelat,J.)
be held to be estopped now from contending that this matter had
not arisen before the Tribunal and had accordingly not been
decided." The High Court also rejected the company's plea that
a demand for revision of the scheme meant not its total abolition
and substitution of another
scheme in its place and held that
such a demand would ordinarily mean that the scheme in its
entirety was to be replaced by another scheme and that what the
.award in fact had done was to frame "a complete and entire
scheme". The High Court thought that to accept the company's
plea that the existing maximum was not touched upon by the award
meant reading a proviso in the award that the maximum dearness
allowance payable to a workman was Rs. 350 per month, a con·
strucfion not permissible in the absence of reference to such a
maximum in tlie award. The High Court also held that the award
had "to be construed without 'reference to the previous history
and facts on which the Labour Court relied", that it was not
permissible for the Labour Court to rely on such facts, and that
even if it was so permissible it would have come to the same
-conclusion, viz., that the scheme was not qualified by any maxi·
mum. On this reasoning the High Court set aside the Labour
Court's order basing its interference with that order on the ground
that the Labour Court fell into a gross error in examining the
previous history as to the dearness ·allowance, which was irrele·
vant, thereby deeiding the .matter in a manner "which was altogether erroneous and unjustified'', and directed the Labour Court
to compute the 'dearness· allowance without any reference to the
maximum.
These conclusions were seriously challenged before us. The
contention was that the Labour Court in dismissing the application
·acted within 'its jurisdiction, and that there was no error apparent
in its decision justifying the issuance of certiorari. On the other
hand, Mr. Tarkunde supported the High Court's order arguing,
firstly, that the Labour Court as an executing court under sec.
33C(2) cou1d not consider facts anterior to the reference to the
Meher Tribunal for the purpose of interpreting that award,
.secondly, that on the construction of that award, as well as the
pleadings of the parties before that Tribunal and demand No. 9,
the Labour ·court was in error in holding that a ceiling of Rs. 350
i>ubsisted, and thirqly, that even If the Labour Court could enter
into such anterior facts, its construction of the Meher award was
patently wrong.
' The question as the scope of jurisdiction of a Labour Cour:t
under sec. 33C(2) has been a subject-matter of several decisions
·d this Court. It is not necessary to go into those deciSions once
:again as fo the Chief Mining Engin~er, East India Coal Co. Ltd.,
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[1971] SUPP. S.C.Itv. Rameshwar(1) all those decisions were examined and the propositions dedueible from them were formulated.
As stated in
propositions (5) and (8), proceedings under sec. 33C(2) are analogous to execution proceedings and a Labour Court called upon
to compute benefits claimed by a workmen is in the position of
an executing court and as such competent to interpret an award
where there is a dispute as to the rights thereunder or as to its
correct interpretation. Obviously, if the award is unambiguous,
the Labour Court is bound to enforce it, and under the guise of
interpreting it, it cannot make a new award by adding to or substractlng anything therefrom. Although it cannot go behind the
award, it is nevertheless competent to construe the award where
it is ambiguous and to ascertain its precise meaning, for, unless
that is done, it cannot enforce the· award when it is called upon to
do so by an application under Sec. 33C.
As held in The Central
Bank of India v. Rajagopalan('), a claim under Sec. 33C (2>
postulates that the determination of the question about computing in terms of money may in some c:ases have to be preceded by
an inquiry into the existence of the right. Such an inquiry is incidental to the main determination aiisigned to the Labour Court
by that sub-section. While inquiring into the question as to the
existence of such a right, and construing the award, the Labour
Court can look into the demand by the workmen in order to ascertain whether the award under which the right Is claimed was
or was not beyond the scope of the dc•marid ; in other words, whether the award was within jurisdiction. (cf. also Bombay Gas Co.
Ltd. v. Gopa/-Bhiva(').) This position was conceded by Mr. Tarkunde.
Demand No. 9, which related to dearness allowance, was
that "the scheme of dearness allowanc:e at present in force should
be revised on the follow'ing lines ...... ". The lines for revision
were, firstly, as to the basic bracket in the index of cost of living..
i.e., 351-360 instead of 371-380, secondly, as to the percentages
of variation, and thirdly, as to the raising of the minimum dearness allowance from Rs. 75 to Rs. 90. An argument was raised,
both before the High Court and rep-..ated before us, which emphasised !he word 'revise' in the demand for dearness allowance
.as against the word 'abolish' in demand No. 2 which was concerned with grades and wage scales. We may not give any undue
importance to the use of such a different phraseology in the two
demands, for, such demands cannot be expected to have been
drafted with meticulous care as to the precise meaning of each
of the words therein.
But there is no gain-saying. that demand
(!) [1968] I S. C.R. 140,
<2) [1964] 3 S. C.R. 140, U2.
(3) [1964] 3 S. C.R. 709, 71S-716.
VOLTAS v. J, ),(, DBME'.LO (She/at. J.)
No. 9 did postulate that there was a dearness allowance scheme
existing in the company when those demands were served on the
company and the workmen felt that it did not adequately neutralise the rise in the cost of living, and therefore, the scheme should
be revised as regards the basic bracket, the percentages of variation and the minimum dearness allowance payable under that
scheme. This is evident from the contentions of the parties before the Meher Tribunal which noted them by stating that whereas the workmen contended that "the existing dearness allowance
scheme" did not adequately neutralise the rise in the cost of living,
the company's conten1ion was that "the existing scale is fair",
but that the company showed its willingness to "revise" the
scheme by accepting the percentagi:s of variation suggested by
the workmen provided they did not press their demand for revision of wage scales. It is clear from the award also that that tribunal, in the light of these rival contentions, held that "some revision in the dearness allowance scheme is necessary", and revised
it by directing that the percentages in the variation should be 5 %
for the first slab, 21% for the second and 11% for the balance
and 3 % on the minimum dearness allowance. It raised the minimum from Rs. 75 to Rs. 77, but declined to revise the basic
_Qrai;ket in the index of cost of living from the existing 371-380
to'-351-360 demanded by the workmen.
There can, therefore, be no doubt whatsoever that there was
an existing scheme of dearness· allowance, that workmen felt that
it was not satisfactory and wanted its revision in certain particulars, viz.. in the percentages of variation, the basic bracket and
the amount of the minimum. In paras 145 to 14 7 of its statement of claim before the Meher Tribunal, the union set out "the
existing scheme for dearness allowance", the demand for a revision, viz., in the basic bracket, in the percentages of variation and
the minimum, and claimed that "the existing dearness allowance
scheme" 'failed to meet its object of neutralising the rise in the
cost of living, and also claimed, by citing dearness allowance paid
by other companies, that the dearness allowance paid by the company was the lowest. In para 125 of its written statement, the
company, on the other hand, pleaded that the existing scheme was
fair, having regard to the scales of pay, allowances and other
terms and conditions, and said that it was agreeable to have a
revised scheme set out therein if the workmen did not press for
revising the wage scales. In the revised scheme suggested by it,
It adopted the variation percentages demanded by the worKmen,
but insisted that the minimum should remain the same, viz., Rs. 75.
No doubt, neither the statement of claim by the union. nor the
written statement of the company referred to the maximum and
clearly for that reason tlie Tribunal also in its award did not refer
to it and concerned itself with the contentions of the parties, (l) as
875
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[1971] SUPP. s.c.I!..
to the basic bracket, (2) the percentages of variation and (3) increase in the minimum.
The principal controversy between the parties, as is clear
from the opening paragraphs of th•! judgment of the Labour
Court, was whether the scheme of dearness allowance, as revised
by the Tribunal, contained the ceiling. As already stated, the
case of respondent I was that he was entitled to the dearness
allowance as set out in his application, that under the award
there was no ceiling and that by paying Rs. 350 per month., the
company withheld from him the benefit accruing to him under
the award. The company, on the other hand, alleged that though
the award revised the scheme of dearness allowance as prevailing
in the company, it did not affect th.e existing ceiling of Rs. 350,
and therefore, there was no question of respondent 1 being deprived of any benefit due to him under the award. Thus, the
controversy between the parties before the Labour Court was whether there was a ceiling in the existing scheme, and if so, whether
the Meher award did away with that ceiling.
The award, of-course, could not do away with such a ceiling,
if it was there, unless demand No. 9 and the Reference to the
Meher Tribunal based on that dema.nd contained anything whkh
required its deletion, or the demand was for a new scheme of
dearness allowance altogether and nqt merely for a revision of
the existing scheme. It is true that neither demand No. 9 nor the
Reference, nor the company's written statement before the Tribunal expressly mentioned the ceiling of Rs. 350 per month. But
the company's case before the Labour Court clearly was that there
did exist in the prevailing scheme such a ceiling, that it was not
mentioned in its reply before the Tribunal because demand No. 9
raised no controversy about it, nor did it call upon the Tribunal
to delete it and that the controversy between the parties in that
Reference related only to the question as to the basic bracket,
percentages of variation and the increase in the minimum.
Upon such a case being before the Labour Court, that court
had to and was competent to decide the question whether there
was a ceiling in the existing scheme, and if so, whether it was
deleted by the Tribunal, in other words, whether the demand
was for doing away with the existing scheme and substituting it
by a fresh scheme which had no ceiling. For that purpose, the
Labour Court had necessarily to examine demand No. 9, the
Reference, the pleadings of the parties, and lastly, the Meher
Award, and incidental to such an inquiry it had to examine the
question whether there was a ceiling in the scheme existing at the
time of that demand and referenc,e.
(See in this connection
Ramkrlshna Ramanath v. The Presiding Of/leer. Labour Court,
.,
VOLTA$ v. J. M. P~MILLO (She/at,J.)
877
Nagpur (').) In doing so, the Labo~ Court had to examine the
various stages the dearness allowance scheme had from time to
time gone through.
Admittedly, the Bakhale award did contain the maximum.
That scheme was revised by the circular, dated November 16, 1953,
by which the dearness allowance was linked, with the cost of living
and the maximum was raised from Rs. 165 to Rs. 300. That award
was terminated and a fresh demand in respect of dearness
allowance was made on August 18, 1956. The demand was that
the scheme of dearness allowance "at present in force should be
revised on the following lines ...... " The demand resulted in the
settlement, dated August 30, 1957. Neither the demand nor the
settlement contained any reference to the maximum of Rs. 300
although it did exist in the existing scheme. The case of respon·
dent 1 was that the said settlement did away with such a maximum
and that from 1957 onwards there was no ceiling at all. This case
was seriously controverted by the · company which
produced
before the Labour Court the circular, dated March 12, 1959, by
which it said that the maximum was raised from Rs. 300 to Rs.
350 with effect from April l, 1959. The case of respondent 1 with
regard to this contention of the company was (1) that no such
circular was issued, at least to the knowledge of the union, and
(2) that even if it was issued, it was confined to the officers of the
company and did .not apply to workmen. The Labour Court held
that the circular was issued and that its interpretation by respon·
dent I that it applied to officers alone was not correct. The circu·
lar was issued to "all officers" of the company. It applied to all
the employees of the company as is evident from its para 2 which
stated as follows :
"Dearness allowance will continue to be paid on
usual basis at the rates applicable at each place subject
to the maximum stated above."
It also stated that it superseded all other previous circulars. If
this circular was issued, as the Labour Court held it was, there
can be no doubt that (1) there was a ceiling in the scheme prevaB
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lent at that time, (2) that it was raised to Rs. 350 and (3) that it
applied to all the employees and not merely to the officers. The
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Labour Court also accepted the company's case that the circular
was notified on the notice board of the company and that that
amounted to a notice of a change under sec. 9A of the Industrial
Disputes Act. In any event, the change did not adversely affect
the workmen. Nor was the question as to its validity before the
Labour Court, which used the circular as evidence of a ceiling
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existing in the scheme right from the time of the Bakhale award.
(I) {1970] 2 L. L. J. 306.
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If from all this evidence before it the Labour Court came to
the conclusion that a ceiling existed in the scheme of dearness
allowance prevailing in the company at all the various stages and
that deletion of such a ceiling was not the subject-matter of either
demand No. 9 or of the reference bo:fore the Meher Tribunal, and
that its award was confined to thi: revision only of the existing
scheme in the three matters earlier referred to, it is not possible
to say that the decision of the Labour Court suffered from an error
apparent on the face of its decision iin respect of which a certiorari
can justifiably be issued under Art. 226. The confines of jurisdiction under Art. 226 have been settled by a series of decisions of
this Court, from among which we need mention only the case of
Syed Yako0b v. K. S. Radhakrishnan('). There was no question
of any estoppel also against the company against its raising the
question of the ceiling in view of the finding by the Labour Court
that the question of the ceiling wru: not the subject-matter of the
reference before the Meher Tribunal. Such a conclusion of the
Labour Court could not be interfer·ed with by the High Court on
any one of the well-known grounds on which only such interference is permissible.
The High Court, therefore, was not justified in interfering with
the Labour Court's order under its writ jurisdiction. The appeal
has, therefore, to be allowed, and lhe writ petition of respondent
I dismissed. In the circumstances ·Of the case, however. we think
it just toot there should be no order as to costs.
G.C.
Appeal allowed.
(I) [1964] S S. C. R. 64.