# November 29 Appeal dismissed. MCLEOD AND COMPANY LTD v. WORKMEN

- **Citation:** [1964] 5 S.C.R. 568
- **Court:** Supreme Court of India
- **Decided:** 1962-08-21
- **Case number:** Civil Appeal • No. 514 of 1963
- **Bench:** P.B. Gajendragadkar, K.C. Das Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/november-29-appeal-dismissed-mcleod-and-company-ltd-v-workmen-2994
- **Pages:** 6

## Headnote

Industrial Dispute-Worker's ·claim for cash allowance in
lieu of tiffin arrangements-Implied condition of service-Re-employment of retired persons-Limited direction b)' Tribunal, if proper.
The disputes between the appellant company and its workmen
were referred to the Industrial Tribunal. The workmen claimed
that (1) they should be given cash allowance in lieu of the tiffin
arrangements made by the company. and (2) the practice started
by the company of re-employing retired persons should be discontinued. The Tribunal directed : (I) the clerical staff should be
paid As. -/8/- per day and the subordinate staff As. -/6/- per day
on all working days, and (2) the company should stop the reemployment of retired workmen in the category of clerks above
C grade. In respect of the subordinate staff as also in regard to
the lower grade clerks, the Tribunal thought it unnecessary to make
any such direction. The evidence showed that in the region 31
comparable concerns were supplying free tiffin to their employees
and that the appellant company had been throughout making .
provision for tiffin to its employees. It was also found that the
policy adopted by the company of re-employing the retired personnel
was not based solely on humanitarian grounds and that when
retired persons were re-employed they were paid a much smaller
salary for doing the same work than they were drawing before
retirement.
•
5 S.C.R.
SUPREME COURT REPORTS
569
Held:
(i) Though under the provisions of the Factories
Act there was no obligation on the company, either statutory or
otherwise, for giving the workers a cash allowance for tiffin.
the history of the relations between the parties coupled with the
prevailing practice in the comparable concerns showed that it
was an implied condition of service that in addition to the wages
and dearness allowance a provision for tiffin was an amenity to
which the employees were entitled. and that the decision of the
Tribunal could not be interfered with.
(ii) The limited direction issued by the Tribu,ial in respect
of the re-employment of retired persons was neither improper nor
unjustified.

## Text

568
SUPREME COURT REPORTS
[1964]
1963
his explanation on March 11, 1952. That notice
was not concerned with any concealment that came
N.A. Malbari to light from the production of the books on August
and Bros.
17, 1953 and, therefore, on this concealment the
v.
assessee had never been heard. In assessing a penalty
Commissioner of on this notice subsequently acquired knowledge would
Income-tax,
be irrelevant.
Bombay
.
.
The result is that the appeal fails and it is disSarkar J.
missed with costs.
1963
November 29
Appeal dismissed.
MCLEOD AND COMPANY LTD.
v.
WORKMEN
(P.B. GAJENDRAGADKAR AND K.C. DAS GUPTA, JJ.)
Industrial Dispute-Worker's ·claim for cash allowance in
lieu of tiffin arrangements-Implied condition of service-Re-employment of retired persons-Limited direction b)' Tribunal, if proper.
The disputes between the appellant company and its workmen
were referred to the Industrial Tribunal. The workmen claimed
that (1) they should be given cash allowance in lieu of the tiffin
arrangements made by the company. and (2) the practice started
by the company of re-employing retired persons should be discontinued. The Tribunal directed : (I) the clerical staff should be
paid As. -/8/- per day and the subordinate staff As. -/6/- per day
on all working days, and (2) the company should stop the reemployment of retired workmen in the category of clerks above
C grade. In respect of the subordinate staff as also in regard to
the lower grade clerks, the Tribunal thought it unnecessary to make
any such direction. The evidence showed that in the region 31
comparable concerns were supplying free tiffin to their employees
and that the appellant company had been throughout making .
provision for tiffin to its employees. It was also found that the
policy adopted by the company of re-employing the retired personnel
was not based solely on humanitarian grounds and that when
retired persons were re-employed they were paid a much smaller
salary for doing the same work than they were drawing before
retirement.
•
5 S.C.R.
SUPREME COURT REPORTS
569
Held:
(i) Though under the provisions of the Factories
Act there was no obligation on the company, either statutory or
otherwise, for giving the workers a cash allowance for tiffin.
the history of the relations between the parties coupled with the
prevailing practice in the comparable concerns showed that it
was an implied condition of service that in addition to the wages
and dearness allowance a provision for tiffin was an amenity to
which the employees were entitled. and that the decision of the
Tribunal could not be interfered with.
(ii) The limited direction issued by the Tribu,ial in respect
of the re-employment of retired persons was neither improper nor
unjustified.
CIVIL APPELLATE JURISDICTION:
Civil
Appeal
•
No. 514 of 1963.
Appeal by special leave from the judgment Award
dated August 21, 1962, of the Fourth Industrial Tri-
'
bunal, West Bengal in Otse No. VIII-332 of 1961.
A. V. Viswanatha Sastri, D.N. Gupta, S.C. Mazumdar and B.N. Ghosh, for the appellant.
D.L. Sen Gupta and Janardan Sharma, for the
respondents.
November 29, 1963. The Judgment of the Court
was delivered by
1963
Mcleod and
Company Ltd.
v.
Worknien
GAJENDRAGADKAR, J.-The industrial dispute be- Gajendragadkar
tween the appellant, Mcleod & Company Ltd., and
J.
the respondents, its workmen, which has given rise
to the present appeal centered round two items of
claim made by the respondents. The respondents
claimed that they should be given cash allowance
in lieu of the tiffin arrangements at present made by
the appellant, and they urged that the practice started
by the appellant of re-employing retired persons
should be discontinued.
The Tribunal has granted
the first claim and has directed that the clerical staff
should be paid As. -/8/- per day and the subordinate
staff As. -/61- per day on all working days in lieu of
the tiffi.n arrangements which are at present made
by the appellant. In regard to the second claim,
the Tribunal has ordered that the appellant should
stop the re-employment of retired workmen in the
category of clerks above 'C' grade.
In respect of the
570
SUPREME COURT REPORTS
[1964)
1963
subordinate staff as also in regard to the lowest grade
clerks, the Tribunal thought it unnecessary to make
Mcleod and any such direction. That is how the latter claim has
Company Ltd. been partially allowed. It is against this award
v.
that the appellant has come to this Court by special
Workmen
leave.
Gajendragadkar
The total number of employees in the employJ
ment of the appellant is about 453. 36 of them are
·
officers; 90 are junior grade Assistants, while 196
are clerks and 131 belong to the subordinate staff. It
is in regard to the last two categories of the appellant's
employees that the two items of dispute have reference
in the present proceedings. It appears that in 1956
there was an industrial dispute between the parties,
one of the items in dispute being the claim made by
the respondents in respect of tiffin on working days.
In those proceedings, however, the said claim was not
pressed and the matter was left to the discretion of
the appellant. After the award was published, the
parties entered into direct negotiations in respect of
the claim of tiffin allowance and according to the
evidence of Mr. Mazumdar, the General Secreatry of
the respondents' Union, the management then assured
the respondents that it would consider the quantum
and value of free tiffin afterwards and a settlement was
then reached. Accordingly, two cups of tea and two
biscuits are given by the appellant to the clerical
staff, whilst one cup of tea and one biscuit is given
to the members of the subordinate staff. On Saturdays
the same ration of tiffin is supplied to the clerks and
the sub-staff alike.
In the present dispute, the respondents contended
that the tiffin arrangements made by the appellant were
unsatisfactory and they urged that a cash allowance
should be given to them in that behalf. This claim
has been allowed by the Tribunal. Mr. Sastri for the
appellant contends that the Tribunal has erred in law
in making an award in respect of the cash allowance for
tiffin, because he argues that it is not obligatory
on the part of the appellant to make any provision
for the tiffin of its employees. Under the relevant
.. -.. ~
,i
'\
~
5 S.C.R.
SUPREME COURT REPORTS
571
provisions of the Factories Act, a canteen had been
1963
started by the appellant, but there is no obligation
on the appellant, either statutory or otherwise, for
Mcleod and
providing any further facility to the employees by way Company Ltd.
of giving them a cash allowance for tiffin. He also
v.
emphasised the fact that the wage structure which
Workmen
prevails in the appellant's concern represents a fair
. --
wage structure and the dearness allowance is paid to Ga.1endragadkar
the respondents according to the Bengal Chamber of
1·
Commerce Formula; the said formula takes care
substantially of the rise in the cost of living from
time to time. That is another reason on which Mr.
Sastri relies in resisting the respondents' claim for
cash allowance in lieu of tiffin. Prima fade, there
is some force in these contentions.
But, on the other hand, the evidence shows that
in the region as many as 31 comparable concerns are
supplying free tiffin to their employees (Ext. 10).
Besides, as we have already seen, the appellant has
throughout been making provision for tiffin of its
employees and, in fact, when after the award was
pronounced in the proceedings of 1956 and this question
was taken up for direct negotiations between the
parties, the appellant agreed to consider the claim
sympathetically and make a suitable provision in
that behalf. That is how the prevailing arrangements
for tiffin came to be introduced. Under these circumstances, if the Tribunal took the view that the appellant
was under an obligation to provide some cash allowance for tiffin to its employees, we do not see how
we can interfere with it on the ground that the impugned decision is erroneous i~ law. The ~istory
of the relations between the parties coupled with the
prevailing practice
in
the
comp.arable concerns
in the region strongly supports the view ta~en by the
Tribunal that in the appellant's concern 1t was an
implied condition of service that in addition to the
wages and dearness allowance, a provision for .tiffin
was an amenity to which the employees were entitled.
That being so, we do n~t th}nk ~hat the appellant's
grievance against the d!fect10n m the award that
1963
Mcleod and
Company Ltd.
572
SUPREME COURT REPORTS
[1964]
As. -/8/- and As. -/61- per day should be paid respectively to the members of the clerical staff and the substaff on all working days, can be upheld.
v.
That takes us to the respondents' claim that
Workmen
the practice of employing retired men should be
G . --;- dk
stopped. Mr. Sastri contends that in acceding partialaien r;ga ar ly to the demand made by the respondents, the Tribu-
. ·
nal has overlooked the fact that the re-employment
of retired persons was mainly inspired by humanitarian considerations. When it appeared to the appellant that some employees who had retired found it
difficult to maintain themselves and their families,
the appellant sympathetically and generously considered their request for re-employment and that is
the basis on which some of the re-employments have
been made. It may be conceded that some of the
re-employments may have been actuated by humanitarian motives and the appellant cannot, therefore,
be blamed on that account; but there are some other
factors in relation to this problem of re-employment
which cannot be ignored. It appears that as many as
6 persons have been re-employed and the correspondence between the parties on this subject shows
that the respondents felt that the policy adopted by
the appellant in re-employing the retired personnel
was not based solely on humanitarian grounds. When
the respondents had raised a dispute on this point
in 1960, the State Government had refused to make
a reference on the ground that only 4 cases of reemployment had been brought to its notice, and so,
the problem did not call for any consideration at that
stage.
Thereafter, the respondents represented to
the State Government that though the company
gave assurances to its employees that re-employment
would not be resorted to on a liberal scale, those
assurances were disregarded and the practice was
being followed in many cases and that posed a serious
problem to the respondents.
Besides, it does appear
that when retired persons are re-employed, they are
paid a much smaller salary for doing the same work
than they were drawing before retirement. Take,
-+
. _.._
5 S.C.R.
SUPREME COURT REPORTS
573
for instance, the case of Chandi Charan Banerjee.
1963
Before he retired, he was drawing a basic salary of
Rs. 380 and dearness allowance. On his re-employMcleod and
ment, he got a consolidated salary of Rs. 250 without Company Ltd.
any dearness allowance, and that means that the
v.
re-appointed employee was getting about half his
Workmen
former wages for doing the same work. This aspect
of the matter introduces a serious infirmity in the Gajendragadkar
appellant's case as it was presented before us by Mr.
J.
Sastri. If re-employments are made on the basis
of reduced salary, that really means that the appellant
is introducing a wage structure in respect of thi;; re-·
employed personnel which is definitely inferior to
the wage structure devised for the employees of the
appellant by the award, and that clearly cannot be
permitted under industrial law. Besides, if senior
persons are re-employed after retirement, that is
apt to retard or hamper the prospects of promotion
to which the junior employees are entitled to look
forward. It is in the light of these facts that the question
posed by the respondents' demand must be considered.
Thus considered, we see no justification for Mr.
Sastri's grievance that the limited direction issued
by the award is either improper or unjustified.
The
fact that the re-employed persons have made an
affidavit supporting the practice adopted by the
appellant can have no material beating in dealing
with the point; in the very nature of things, the said
re-employed persons are bound to support the appellant.
The result ls, the appeal fails and 1s dismissed
with cost.
Appeal dismissed .