# TATA CONSULTING ENGINEERS v. WORKMEN EMPLOYED AND VICE-VERSA

- **Citation:** [1981] 2 S.C.R. 166
- **Court:** Supreme Court of India
- **Decided:** 1980-11-13
- **Bench:** V. R. Krishna Iyer, R. S. Pathak, 0. Ciunnappa Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/tata-consulting-engineers-v-workmen-employed-and-vice-versa-8198
- **Pages:** 19

## Headnote

c
D
E
Industrial disputes-Tribunal making Gn award prescribing revised grades/
scales of pay to different categories with retrospective effect fro1n 1st .Tanuary,
1976-Validity of retrospectivity of the award.
Industrial Disputes (Bonibay) Rules, 1957-Rule 31, scope of-Whether
the clarification n1ade by the Tribunal
prescribing that a flat
increase of Rs.
150/- in the category of Dra11ghtsn1en and Rs. 100!- in the case of the other
categories payable "to cacl1 oj its
e111pfoyl'!es"
an1011nts to a
supplC'rnr'nfary
award not pennissible under Rule 31.
Dismissing the appeals by special leave, the Court.
}{ELD : Per Pathak, J. (Krishna Iyer and Chinnappa Reddy, JJ. concu1Ting)
(1) Having regard to the financial capacity of M/s. Tata Consulting Engineers, the appellant, and the ,material on the record and the various olher considerations \~rhich prevailed with the Tribunal, the granting
of
revised
wa.ge
scales is in order. Although the V.'age scales were introduced as long ago as
1973 they were maintained at that level except for a slight revision some tilne
thereafter. No dearness allowance \Vas paid until the beginning of 1977 and
the house rent allowance also was introduced about that time.
The cost of
living had gone on increasing from 1972 onwards and the dearness 1ilowancc
and house rent allowances made no appreciable impact in
neutralising
the
increasing cost. During all these years, the appellant had
continued to enjoy
increasing profits; nonetheless the en1oluments received by the workmen did not
receive the impress of the appellant's growing prosperity. The Charter of Demands was presented by the Union in July, 1974 and when
conciliation proF
ceedings failed the State Government made a reference to the Industrial Tribunai in 1975. The several considerations which prevailed with the Tribunal giving retrospectivity to the revised pay scale~ and referred to by it cannot be
ignored. [174C-G]
G
H
(2) It is not a universal rule that the
dearness allowance should in
all
cases be correlated with the· cost of Jiving index.
The Tribunal, in the present
case, considered the matter and found it sufficient and in acoorc1 \\ith justice
that the wage sca1es should be restructured with suitable incren1ents provided
therein.
Jt noted that dearness allowance was being granted by !he appellant
at 10% of the salary subject to a minimum of Rs. 50/- and house rent allowance at 30% of the basic salary.
Having regard to the not inconsiderable
improvement in the level of the basic \vage, it observed th:i.t there v.:ould be
a consequent increase in the dearness nllowance and
house
rent
a11owance.
In view of the increase so secured, the Tribunal rejected the "uggestion that
a slab system ~houkl be, introduced in the dearness
allowance or that
there
should be any other modification of the principle on which dearness aliowance
V.'as being presently granted.
Jt declared that the cumulati·,rc effect of an im-
•
. .,
;
•
TATA CONSULTING ENGINEERS V. WORKMEN
167
proved wage structure together with dearness allowance operating on a
slab
system would throw an impossible burden of about Rs. 1 crore on the financial
capacity of the appellant.
It was open to the Tribunal to adopt the position
which it did. If the dearness allowance is linked with the cost of living index;·
the whole award \Vi11 have to be reopened and ,the entire basis on which it
has been made will have to be reconsidered. The award is a composite docu~
ment in which the several elements of increased wage scales, larger increments,
longer span of 20 years for earning increme·nts, dearness allowance at 10% of
the basic wage, besides several Other benefits, have
been
integrated into a
ha.lanced arrangement in keeping with what the Tribunal has found to be the
financial capacity of the appellant. It is not possible to maintain one part of
the award and supersede another.
[179 E·F]
The Hindustan Ti111es Ltd., l•./cw Del/ii v. Their Work1ne11, [1964] 1 SCR
234, 247 and Bengal Che1nical & Phannac

## Text

_Characters 0–39,584 of 52,859. This is a partial read: ask again with offset=39584 for what follows._

166
A
TATA CONSULTING ENGINEERS
v.
WORKMEN EMPLOYED AND VICE-VERSA
November 13, 1980
B
[V. R. KRISHNA IYER, R. S. PATHAK & 0. CIUNNAPPA REDDY, JJ.J
c
D
E
Industrial disputes-Tribunal making Gn award prescribing revised grades/
scales of pay to different categories with retrospective effect fro1n 1st .Tanuary,
1976-Validity of retrospectivity of the award.
Industrial Disputes (Bonibay) Rules, 1957-Rule 31, scope of-Whether
the clarification n1ade by the Tribunal
prescribing that a flat
increase of Rs.
150/- in the category of Dra11ghtsn1en and Rs. 100!- in the case of the other
categories payable "to cacl1 oj its
e111pfoyl'!es"
an1011nts to a
supplC'rnr'nfary
award not pennissible under Rule 31.
Dismissing the appeals by special leave, the Court.
}{ELD : Per Pathak, J. (Krishna Iyer and Chinnappa Reddy, JJ. concu1Ting)
(1) Having regard to the financial capacity of M/s. Tata Consulting Engineers, the appellant, and the ,material on the record and the various olher considerations \~rhich prevailed with the Tribunal, the granting
of
revised
wa.ge
scales is in order. Although the V.'age scales were introduced as long ago as
1973 they were maintained at that level except for a slight revision some tilne
thereafter. No dearness allowance \Vas paid until the beginning of 1977 and
the house rent allowance also was introduced about that time.
The cost of
living had gone on increasing from 1972 onwards and the dearness 1ilowancc
and house rent allowances made no appreciable impact in
neutralising
the
increasing cost. During all these years, the appellant had
continued to enjoy
increasing profits; nonetheless the en1oluments received by the workmen did not
receive the impress of the appellant's growing prosperity. The Charter of Demands was presented by the Union in July, 1974 and when
conciliation proF
ceedings failed the State Government made a reference to the Industrial Tribunai in 1975. The several considerations which prevailed with the Tribunal giving retrospectivity to the revised pay scale~ and referred to by it cannot be
ignored. [174C-G]
G
H
(2) It is not a universal rule that the
dearness allowance should in
all
cases be correlated with the· cost of Jiving index.
The Tribunal, in the present
case, considered the matter and found it sufficient and in acoorc1 \\ith justice
that the wage sca1es should be restructured with suitable incren1ents provided
therein.
Jt noted that dearness allowance was being granted by !he appellant
at 10% of the salary subject to a minimum of Rs. 50/- and house rent allowance at 30% of the basic salary.
Having regard to the not inconsiderable
improvement in the level of the basic \vage, it observed th:i.t there v.:ould be
a consequent increase in the dearness nllowance and
house
rent
a11owance.
In view of the increase so secured, the Tribunal rejected the "uggestion that
a slab system ~houkl be, introduced in the dearness
allowance or that
there
should be any other modification of the principle on which dearness aliowance
V.'as being presently granted.
Jt declared that the cumulati·,rc effect of an im-
•
. .,
;
•
TATA CONSULTING ENGINEERS V. WORKMEN
167
proved wage structure together with dearness allowance operating on a
slab
system would throw an impossible burden of about Rs. 1 crore on the financial
capacity of the appellant.
It was open to the Tribunal to adopt the position
which it did. If the dearness allowance is linked with the cost of living index;·
the whole award \Vi11 have to be reopened and ,the entire basis on which it
has been made will have to be reconsidered. The award is a composite docu~
ment in which the several elements of increased wage scales, larger increments,
longer span of 20 years for earning increme·nts, dearness allowance at 10% of
the basic wage, besides several Other benefits, have
been
integrated into a
ha.lanced arrangement in keeping with what the Tribunal has found to be the
financial capacity of the appellant. It is not possible to maintain one part of
the award and supersede another.
[179 E·F]
The Hindustan Ti111es Ltd., l•./cw Del/ii v. Their Work1ne11, [1964] 1 SCR
234, 247 and Bengal Che1nical & Phannace1t1;cal Works Linii<ed v. Its Work·
men, [19691 2 S.C.R. 113. distinguished.
(3) The jurisdiction given to
the Tribunal by rule 31 of the Industrial
Disputes (Bombay) Rules, 1957, is closely circumscribed. It is only a clerical
mistake or error which can be corre1.:ted and the clerical mistake or error must
arise from an accidental slip or omission jn the award. An accidental slip
or omis::1ion implies that something was intended and contrary to that intention
what should not have been included has been included or what should have
been included has been omitted. It must be a mistake
or error amenable
to clerical correction only. It must Ilot be a n1istake or error which calls for
rectification by modification of the conscious adjudication on the issues involved.
[175 A-CJ
Per contra
The order of 22nd Dccen1ber, 1978 is invalid so far as it amends paragraph
23 of the original award. The amendment hasi resulted in the Tribunal mak~
ing, as it were, a supplementary a.ward,
whereby a further
relief is
being
granted beyond that granted in the original award. The original award was
completed and signed by the Tribunal, and it cannot be reopened now except
for the limited purpose of Rule 31. In travelling outside and
beyond the
tenns of the original a.\vard, the Tribunal has committed a jurisdictional error.
The evidence contained in the award throughout provides incontrovertible proof
that this flat increase (ad·hoc) was never originally intended in the award.
There was only one increase contemplated in the award, in paragraph 23 of
the award and it is more than plain that the increase was the one incorporated
in the revised pay scales pertai11ing to different categories. No second flat increase \\.'as envisaged at all. The an1endment made by the Tribunal has the
effect of providing a second increase, this time to each individual workmen.
If, ns the Tribunal ha.s stated in the amendment order, the increase in para·
graph 23 was intended to , apply to each individual workmen, there is nothing
in the body of the award to forn1 the foundation on which the actual figures
in the restructured pay scales can be made to rest. There will be no explanation
·~1hy· the initial start of the revised pa.y scales has been
increased
by
Rs. 150/- in the' case of the category of Draughtsmen and Rs. 100/- in the
case of other categories. Considering the fitment of the workmen in the revised
scales, it was stated in the award that workman found drawing a salary less
than the beginning of 1he gra.de would be' stepped up to the beginning of the
grade and if his pay fell between two steps in the reclassified pay scales the
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
168
SUPREME COURT REPORTS
[1981) 2 S.C.R.
basic pay \·vas to be fixed at the s.tep higher in the revised scale. Further the
award was made on the basis that the overall :financial load according to paragraph 33 of the award would be to the tune of about Rs. 5 lakhs. It was
that figure which the Tribunal had in mind against the backdrop of the gross
annual figures when it made the revised pay scales
restrospective
from
1st
January, 1976.
[176 D-G, 177A, 178 D-F]
The statement, Exhibit C-51 afforded an indication merely of what the
additional financial load would be if a flat increase \\'as given to the individual
workmen on the alternative basis set forth therein.
None of the alternatives
was actually adopted by .the Tribunal, because when the award was made the
1"ribunal proceeded instead to restn1ctnre the wage scales by the addition of
Rs. 150/- in the case of the category of Draughtsmen and of Rs.
100/~ in the
case of other categories to the initial pay in the wage scales pertaining to these
categories. The addition was integrated as a feature of the wage· scales, it was
not regarded as an addition to the pay of each individual workmen. [l 78A-C]
It is an accepted principle that consent by a party cannot confer jur.isdiction
on a court. What is \Vithout jurisdiction will remain so. [178 E-Fl
Per 0. C. Redd)', J. (Majority view, Iyer and Reddy, JJ.)
The order dated December 22, 19i8 of the IndustriaJ. Tribunal which purports to correct the award dated December 20, 1978 cannot be considered in
effect to be a fresh award and it is in order. The omission of the words "to
each employee" after the figure Rs. 150/- and again after the figure Rs. 100/-
v..as clearly an accidental slip or omission which the Tribunal
\Vas
entitled
to correct.
The application for the correction was made immediately, that is
to say, two days after the Award, while iron \Vas still hot or when everything
must have been fresh to the minds of the Tribunal. Even the endorsement
n1ade on the application by the Advocate for the Company to the effect "submitted to whatever this honourable Tribunal desires to do", does not indicate that
the Company had any objection to the award being corrected as sought by the
enlployees union.
On the other hand the endorsement reads as if there was
tacit agreement on the part of the Company to the correction sought by the
union; it cannot possibly be doubted that an Industrial Tribunal deciding upon
the v.•age scales of the employees of an establishment would have full liberty
to propose ad-hoc increase of salaries as part of the revision of pay scales, not
can it be doubted that fitment into the revised pay scales is ce1tainly a part of
the revision of pay scales. · This is elementary a.nd fundamental to the jurisdiction of the Industrial Tribunal in revising wage scales. If without any fiat or
ad-hoc increase of salary the workmen were to be fitted into revised scales of
pay, it would, obviously, result in serious anomalous situations. In the case of
several senior employees, the revised scale would yield but a ve1y
small and
almost a token increase in the size of the pay packet whereas the junior employees would get a large benefit While workmen mi.sing industrial disputes
for revision of wage scales are certainly minded about their future prospects in
the matter of wages, they, surely would be more concerned with the immediate
benefit accruing to them. That was why the Industrial Tribunal thought that
all round fiat increase of Rs.
150/~ in the case of Draughtsmen and Rs. 100/-
in the case of other workmen-to each employee-was called for.
[180C,
1810-E, G-H, 182A, 183D-E, G-H, 184A-BJ
•
,
..
•
TATA CONSULTING ENGINEERS v. WORKMl'jN (Pathak!.)
169
( 4) While it is true that Dearness Allowance linked to cost of living index
A
is ordinarily the best and the most scientific method of computing dearness
allowance, it cannot always be said that an illegality warranting interference
under Article 136 is committed if some other method is
adopted. In
the
ins-ta.nt case, the 1'ribunal has given satisfactory reasons for adopting a different
mode.
[184 F-GJ
CIVIL APPELLATE JURISDICT!Ot\ : Civil Appeals Nos. 2299 and
2300 of 1979.
Appeal by Special Leave from the Award dated 20-12-1978 of
the Industrial Tribunal Maharashtra in Reference (IT) No. 292 of
1975, published in Maharashtra Government Gazette dated
15th
February, 1979.
G. B. Pai, Manick K. Gagrat, J. B. Dadachanji, 0. C. Mathur and
K. J. John for the Appellants in CA No. 2299 and Respondents in CA
2300/79.
V. M. Tarkunde, P. H. Parekh, S. R. !Deshpande and Miss Manik
Tarkunde for the Respondents in CA 2299 and Appellants in CA
No. 2300/79.
The following Judgments were delivered :
B
c
D
. PATHAK, J .-This appeal by special leave has been preferred by
E
Tata Consultancy Engineers against an award dated 20th December,
1978 of the Industrial Tribunal, Maharashtra, Bombay revising the
wage scales of certain categories of employees and granting various
other benefits.
Tata Consultant Engineers, at its inception, was a partnership firm
but subsequently the partnership was dissolved and in 1974 the undertaking became one of the divisions of Tata Sons Limited. It functions as a consulting organisation and a service industry, and does not
manufacture any product or carry on trade.
Its workforce consists
of engineers and supervisors and different categories of workmen. Out
of 665 employees at Bombay, the draftsmen and the administrative
staff number 306. These workmen are members of the Tata Consultant Employees Union.
They served a Charter of Demands in July,
1974, on the appellant, and as their demands were not accepted and
conciliation proceedings proved fruitless, the State Government made
F
G
a reference of the dispute under s. 10(1) (d), Industrial Tribunal,
H
Maharashtra for adjudication.
The Reference was numbered I. T.
No. 292 of 1975.
A
B
c
D
E
F
G
H
170
SUPREME COURT REPORTS
[1981] 2 S.C.R.
The Union filed a statement before the Tribunal claiming an upward revision of the wage scales and dearness allowance and an increase from fifteen years to twenty years in the span for earning annual increments. It was urged that the Efficiency Bar, as a feature
of the wage scales, should be removed.
The dearness allowance, it
was claimed, should be granted on a slab system.
The claim of the
Union was resisted by the appellant, who maintained that the existing
wage scales were fair and reasonable on a region-cum-industry basis
and that it would not be possible for the appellant to bear the additional financial burden if the demands of the Union were accepted.
Reference was made to the political uncertainty in Iran which had
placed an appreciable part of the appellant's business in jeopardy and
to various other factors, peculiar to an engineering consultancy business, beyond the appellant's control There was fierce· competition
also, it was asserted, from other similar organisations.
The appellant had introduced various pay scales in 1973 and some
time later they were revised.
There was no separate dearness allowance until January, 1977 when it was introduced for the first time.
House rent allowance was also paid.
Dearness allowance
became>
payable at 10% of the basic wage subject to a minimum of Rs. 50/-
and house rent allowance at 30% of the basic salary.
Nothing those
facts, the Tribunal observed that compared with the increased paying
capacity of the appellant, an inference drawn from the prosperity enjoyed by the appellant over the years, there was definite need for revising the wage scales. It was pointed out that the dearness allowance
and house rent allowance granted by the appellant made little impact
in neutralising the cost of living.
The need for revising the wage
scales was not disputed by the appellant. In proceeding to revise the
wage structure the Tribunal took into account the two principles involved in the process, the financial capacity of the industry to bear the
burden of an increased wage bill, and the prevailing wage structure on
an industry-cum-regi0n
basis.
Wage scale statements
were
filed
by the parties before the Tribunal pertaining to several engineering consultancy organisations but in the absence of pertinent information concerning the strength of their labour force, the extent of their
business, the financial position for
some years, the capital invested,
the precise nature of the business, the position
regarding reserves,
dividends declared and future prospects of the company, the Tribunal
found that it was unable to rely on them as comparable concerns.
Holding it impossible in the circumstances to apply the principle of
industry-cum-region basis, the Tribunal turned to a consideration of
the financial capacity of the company to bear an additional burden.
..
..,
•
•L
••
j
"'
I-..
~
•
,
•
TATA CONSULTING ENGINEERS v. WORKME;N (Pathak J.)
I 71
fn this connection, it proceeded on the footing that the appellant was
a separate and independent division of Tata Sons Limited and had no
"functional integrality" with the other .divisions.
Having regard tcJ
the net profits earned by the appellant from 1968 to 1977 it found
that the acceptance of the demands of the. Union would result in an
increased burden of Rs. 7 crores, a burden which would dry up the
appellant's resources and would be impossible for it to bear.
The
Union modified its demands but even the modified terms, according to
the Tribunal, appeared to be on the high side inasmuch as the resulting total burden of Rs. 1. 70 crores was much higher than the average
profits could sustain.
The particular character of the appellant,
tha~
it was a· service industry and not a manufacturing concern, was taken
into account and it was observed that unlike a manufacturing business
there was little scope for diversification in the case of an engineering!
consultllncy,,
Nonetheless, the Tribunal obseyved,
ther~ was eveey
reason to expect that the appellant would be able to earn sound profits in the future, and the instability in its business activities occasioned
by the turbulent political situation in Iran, would be, it was expected,
compensated by contracts secured in different developing countries.
For the purpose of determining the financial capacity of the appellant,
the Tribunal followed Unichem Laboratories v. Their Workmen(')
where it was held that the gross profits should be computed without
maiking deductions on account of taxation, development rebate and
depreciation.
It decided also that there was no ground for deductin,i?l
the notional value of gratuity.
Revising the figures on that basis, it
computed the annual gross profits for the years! 1968 to 19n and
determined the annual average at Rs. 26.69 lakhs.
The Tribunal took note of the elaborate scales of wages already
existing in the wage structure of the appellant and decided "to modify
the existing structure of the scales with flat increases in each category." It also observed that the category of Draughtsmen needed a
special increase.
But it rejected the demand of the Union for dearness allowance on the basis of a slab system, because that would have
imposed an unacceptable burden on the appellant's financial capacity
and thi:re was no reason why the~existing scheme of dearness allowance should be disturbed when a substantial increase was being made
in the level of the basic wage.
Taking into account the circumstance
that besides the staff of 306 workmen represented by the Union there
were several other employees who would also have to be paid, the Tribunal considered it fair, in paragraph 23 of the award, to give a flat
increase of Rs. 150/- in the category of Draughtsmen and Rs. 100/-
in the case of other categories. It rejected the demand of the Union
(I) [1972] I L.L.J. 576.
12-1281SCI/80
A
B
c
D
F
G
R
A
B
c
D
E
F
G
I i 2
SUPREME COURT REPORTS
[198!] 2 S.C.R.
for abolishing the Efficien~y Bar, but the span cif 15 years for oorningi
increment was expanded in some grades to 20 years and some adjustments were also made in specific grades.
The Tribunal also noted that
after the salllries of the employees had been fixed in the respective
scales, senior employees would have to be given some more incrern~'llt~
in the new scales according to their completed years of service. Taking
all these factors into consideration, it made an award
dated 20th
December, 1978 prescribing the following revision in the existing scales1
of wages:
Grade & Category
Existing Grade/Scale.
Revised Grade/
Scale
I Peon/Helpor/Sweeper
Rs. 250-10-300-EBRs.
350-10-450-1510-400.
600.
II Driver/Asst!. House-keeper/
Rs. 300-10-420-EBRs.
400-15-520-20Caretaker.
15-540.
660-EB-25-785.
III Jr. Clerk-cum.-Typist/Jr. Steno/
Rs. 350-15-425-EBRs.
450-20-550-25Tel. Optr./Receptionist/Asstt.
20-625-EB-25-725.
800-EB-30-950.
Record Keeper/Yeh. Mechanic/
Jr. Librarian. '
IV Sr. Clerk/Steno/Record Keeper/
Rs. 450-20-530-EBRs.
550-25-675-30Tix. Operator/Xerox Operator.
30-860-EB-35-IOOO.
975-EB-40-1175.
V Office Asstt./Lib. Asstt./ Cost
Rs. 590-30-740-EBRs.
690-35-865-40Asstt./Administrative Asstt./
35-1020-EB-40-1300
1265-EB-45-1490.
Personnel Asstt./Comm. Asstt./
Canteen Asstt.
VI Draughtsman/Site Supervisor/
Rs. 380-30-620-40Rs.
5 30-40-7 30-50Surveyor/(Diploma Holder).
1020-EB-50-1320.
1230-EB-60-1530.
VII Junior Architect
Rs. 760-40-1000-50Rs. 860-50-1160-60-
(Engineering Graduate)
1300.
1700.
VIII Sr. Draughtsman (Diploma
Rs. 1000-50-1300-60- Rs. 1100-60-1340-70Holder)
1600-7S-1750.
1690-80-2010.
The Tribunal maintained the existing schemes of dearness allowance and house rent allowance, and observed that in vi~w of the revised basic wages there would be a resultant increase in the dearness
allowance and house rent allowance.
The revised wage scales, the Tribunal directed, should take effect
retrospectively from 1st January, 1976. It also laid down th~ principle enabling the actual fitment of the workmen in
their
respective
H
wage scales as on that date and also provided for the number of increments to which they would be entitled having regard to the period
of completed service.
>
-..
•
TATA CONSULTING ENGINEERS v. WORKME,N (Pathak J.)
173
Two days after the award was made, an application was made by
A
the Union stating :
"In the said award, your Honour has observed, at the
end of para 22, "In view of the increase that is, being allowed
in the basic pa,y, I do not propose to revise the existing
scheme of Dearness Allowance." Further, it appears that
the Tribunal intended to grant the increase of Rs. 150/- to
each draughtsman and Rs. 100/-
1 to all other workmen in
their basic pay.
However, this is not clearly mentioned
anywhere in the award due to accidental slip or omission."
~The Union prayed that the position may be clarified and the award
corrected accordingly.
On the same date, the Tribunal disposed o~
the application by the following order :
"There can be no doubt that a flat increase of Rs. 150/-
to each of the employees in the category of Draftsmen and
of Rs. 100/- to each employee in the other categories has
been granted under my award.
The same has been made
clear in paragraph No. 23, but it appears that the words "to
eacl1 employee" after the figure "Rs. 150/-" were omitted.
Similarly, the same words "to each employee" after the figure
"100" were omitted. When the award is sent for publication, a necessary corrigendum be made in the award and
the aforesaid words after the figures1 Rs. 150/- and Rs. l 00/-
be added. It may be mentioned that only from that
point of view viz. to grant fiat increase of Rs. 150/- and of
Rs. 100/- to the empl9yees in the category of Draftsmen
and the other categories respectively that a burden statement was called for from the company and the same was
submitted (vide Ex. C-51). The fitment has also to be
done only after the fiat increase is added to the present
basic salary of each employee. I do not think that any
problem would oarise for interpretation of the award. Since
the award has been already signed, I do not think anything
further can be added to this award.
sd/- K. N. Wani
INDUSTRIAL TRIBUNAL."
In this appeal, the learned counsel for the appellant had covered
B'
c
D
E
F
G
a wide field, but in the end he stoates that the appellant is aggrieved
H
by two matters only. One is the retrospectivity attached to the revised wage scales, and the other is the fiat increase given to each
-----~~ ---
174
SUPREME COURT REPORTS
[1981] 2 S.C.R.
A
employee of Rs. 150/- in the category of Draughtsmen and Rs. 100/-
in other· categories resulting from the order dated 22nd December,
1978.
The workmen have filed an appeal by special leave, Civil Appeal
No. 2300 of 1979, in which they have challenged the rejection by the
B
Tribunal of their claim in respect of dearness allowance which, they
contend, should be pegged to the cost of living index and should not
be a fixed amount.
c
D
E
F
G
Considering the appeal of Tata. Consulting Engineers first,
the
contention of learned counsel for the appellant is that having rega"
to the financial capacity of the appellant the Tribunal erred in making ,
the wage scales retrospective and, in any event, in ranging the retrospectivity back to 1st January, 1976. We have been taken through
some of the material on the record in the attempt to support the
contention, but after giving careful thought to the matter,
I
think
there is ample justification for what the Tribunal did.
It must be remembered that although the wage scales were introduced as long agd
as 1973 they were maintained at that level except for a >light revision
some time thereafter.
No dearness allowance was paid until the
beginning of 1977 and the house rent allowance also was introduced
about that time. The cost of living had gone on increasing from 1972
onwards and, as the Tribunal has found,
the dearness allowance!
and house rent allowance made no appreciable impact in neutralising!
the increasing cost.
During all these years, the appellant had continued to enjoy increasing profits; nonetheless the emoluments received
by the workmen did not receive the impress of the appellant's growingi
prosperity. The Charter of Demands was presented by the Union in
July, 1974 and when conciliation proceedings fuiled the State Government made the reference to the Industrial Tribunal in 1975. The
Tribunal has referred to various 'considerations which prevailed with..J
it in giving retrospectivity to the revised pay scales. They are consi•
derations which cannot be
ignored.
Accordingly,
the contention
raised on behalf of the appellant against retrospectivity of the wage
scales must be rejected.
The challenge embodied in the second
contention
against the
amendment of the award is more serious. It is urged that the amendment results in the inclusion of a flat increase of Rs. 150/- to each
•
workman in the case of Draughtsman and Rs. 100 /- to each workman in the case of othclr categories, a result wholly unwarranted, it
H
is said, by the intent of the original award and, therefore, falling beyond the jurisdiction of the Tribunal. In making the application of
22nd December, 1978, the Union invoked the jurisdiction
of the
.
TATA CONSULTING ENGINEERS v. WORKMEN (Pathak J.)
17 5
Tribunal under rule 31 of the Industrial Disputes (Bombay) Rules,
A
1957. Rule 31 provides:
"3 l. The Labour Court, Tribunal or Arbitrator may
correct any clerical mistake or error arising from an accidental slip or omission in any award it or he issues."
The jurisdiction given to the Tribunal by rule 31 is closely circumscribed. It is only 11 clerical mistake or error which c.-an be corrected,
and the clerical mistake or error must arise from an accidental slip or
omission in the award.
An 11ecidental slip or omission implies that.
something was intended and contrary to that intention wlrat should
~t
have been included has be~n included or what should have been
included has been omitted. It must be a mistake or error amenable
to clerical correction only. It must not be a mistake or error which
calls for rectification by modification of the conscious adjudication;
on the issues involved.
Is the instant case one where the amendmept made by the Tribunal
in the original award can be said to correct a mere clerical mistake
or error arising from an acciden!'al slip or omission? To answer the
question, it is necessary to examine the basis of the award a.nd the
intent which flows from that basis.
The terms of reference in the
State Qovernment's order required the Tribunal to revise the scales
of pay and dearness allowance, and there was no mention of givingi
any ad hoc increase in the basic pay of individual workman. It would
do well to recall that the claim of the Union filed before the Tribunal
also centred on the nee.d to revise the wage scales. Thut was the
main issue between the parties. It is to the task of revising the pay
scales that the Tribunal addressed itself, and throughout the material
part ·Of the award it is that msk which held its focussed
attention.
The financial capacity of the appellant, and the related study of its
annual profits from 1968 to 1977, were examined from that view
~int. The sufficien_cy of the existing pay scales was considered in
detail, and regard was had to their original structure and the accretions made subsequently by way of dearness allowance and house
rent allowance.
For the purpose of restructuring the P'ay scales the
Tribunal ruled on the paying capacity of the appellant, both with
reference to the profits of the preceding year as well as the prospects
of the future.
The finandal capacity, as the
Tribunal
observed,
constituted one of "the principles which are required to be followed
in the fixation of the wage structure." A clear statement of its inten~
tion is found iri paragraph 22 of the
award,
where the Tribunal
stated :
"I only propose to modify the existing structures
of
the scales with flat increases in each category."
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
176
SUPREME COURT REPORTS
[1981] 2 S.C.R.
No ad hoc increase to the paY of each individual workman was intended.
And that is confirmed by what was stated in paragraph 23 of
the award:
"Considering this outgoing the flat increase of Rs. 150/-
in the category of Draughtsman and Rs. 100/- in the case
of the other categories would be fair."
It will be noted that the pay scales of different categories were being
restructured, and the flat increase envisaged there related to an increase
in the general pay scales of different categories.
Individual workmen ~
were not present to the mind of the Tribunal.
That the increase was '
·
pertinent to the general pay scales in the
revised wage structure is
patently clear from a comparison of the existing pay scales and the
revised pay scales.
The compara_tive table of existing pay scales and
the revised pay scales has been reproduced earlier. The revised pay
scales of all categories, except the category of Draughtsmen, shows
an increase of Rs. 100/- in the initial pay fixed in each scale, the increase in the case of the category of Draughtsmen being Rs. 150/-.
There was only one increase contemplated in the award, in paragraph 23 of award, and it is more than plain that the increase was
the one incorporated in the revised pay scales pertaining to different
categories.
No second flat increase was envisaged at all.
The amendment made by the Tribunal has the effect of providing a second in•'
crease, this time to each individual workmen.
If, as the Tribunal hM
stated in the amendment order, the increase in paragraph 23 was
intended to apply to each individual workmen, there is nothing in the
body of the awdrd to form the foundation on which the actual figures
in the restructured pay scales can be made to rest.
There will be nq
explanation why, the initial start of the revised pay scales has
been
increased by Rs. 150/- in the case of the category of Draughtsmen
and Rs. 100/- in the case of other categories. Considering the fitment ~
of the workmen in the revised scales, it was stated in the award that a
workman found drawing a salary less than the beginning of the grade
would be stepped up to the beginning of the grade and if his pay fell
between two steps in the reclassified pay scales the basic pay was to
be fixed at the step higher in the revised scale.
Conspicuous by its
absence is any reference to a fiat increase in the pay of an individual
workmen.
Even when considering the range of permissible retrospectivity the Tribunal stated in the award :
"In view of the revision of the wage scales, there would
be consequent increase in the dearness allowance and the
house rent allowance."
..
TATA CONSULTING ENGINEERS v. WORKMEN (Pathak!.)
177
And the clinching circumstances of all is that the award was made
on the basis that the overall financial load according to paragraph 3 3
·of the award would be to the tune of about Rs. 5 htkhs. It was that
figure which the Tribunal had in mind against the backdrop of_ the
gr<M>s annual figures when it made the revised pay scales retrospective
from !st January, 1976.
This liability taken with the liability accruing on the need to increase the salaries of the other staff determined
the Tribunal's deliberations in regard to the several fea.tures of the
award, including the grant of increments rellited to completed periods
of ~ervice, the expansion of the span from 15 years to 20 years' for
.< earning increments, and other benefits. It cannot be the case oi the
Union that the figure of Rs. 5 lakhs mentioned in paragraph 33 o~
the award represented the result of adding a flat increase to the pay
of each workman in addition to the benefits .conferred by the revised
pay scales and other awarded reliefs.
·
In its order of 22nd December, 1978, the Tribunal has referred
to the statement (Exhibit C-51) filed by the appellant when called
upon to indicate the increased financial burden apprehended by it.
The Tribunal has relied on this statement as evidence showing tha~
the appellant knew that a flat increase of Rs. 150/- and Rs. 100/-
was intended to each of the employees in the category of Draughtsmen and the other categories. In so construing the statement, Exhibit
C-51, the Tribunal has grievously erred. It seems from a perusal of
the document, Exhibit C-51, that it is a statement giving trial figures
of the increased financial load on different bases.
On the basis that
a sum of Rs. 150/- per month was added to the pay of each Draughtsman and a sum of Rs. 100/- was added to the pay of every other
workman, who belonged to the Union staff, the financial load would
increase to Rs. 9,22,032/-. Likewise, if a flat increase of Rs. 100/-
was given to individual workmen of all categories, including Draughts-
~ men, the increased financial load would total Rs. 7,64,256/-.
The
statement then goes on to indicate that if a flat increase of Rs. 75/-
per month were given to individual workmen of all categ9ries
the
toi'al increase would be Rs. 5,78,220/-.
Again, if the flat increase
is Rs. 65 /- per month to the individual workmen of all categories,
the additional load would total Rs. 4,97,772/·. Finally, on the basis
that the individual Draughtsman would be given an increase of Rs.
75/- per month and the individual workmen of other categories Rs.
50/- per month, the additional load was calculated at Rs. 4,63,092/-.
It will be noted that the statement, Exhibit C-51, was prepared on
the basis of the employees' strength as in December, 1971. A similar
statement was prepared on the basis of the employees' strength as in
Septeriber, 1978.
These statements cannot be regarded as evidenctj
--- ----~--!!:O:r~~----- Sl'T ~-
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
178
SUPREME COURT REPORTS
[1981] 2 S.C.R.
that the appefunt was cognizant of the intention of the Tribunal to
provide a fiat increase to the pay of each workman.
The statement.
afforded an indication merely of what the additional financial load
would be if a fiat increase was given to the individual workman on
the alternative basis set forth therein.
None of the alternatives was
actually adopted by the Tribunal, because when the award was made
the Tribunal proceeded instead to restructure the wage scales by the
addition of Rs. 150/· in the case of the category of Draughtsmen and
Rs. 100/- in the case of other categories to thf! initial pay in the
wage scales pertaining to those categories. The "addition was integrated as a feature of the wage scales; it was not regarded as an addition to the pay of each individual workman.
It seems that the Tribunal was betrayed by a CU!"ious confusion in
accepting the plea of thi Union that ii fiat increase to the pay of each
workman was intended in the original wage and, consequently, it fell
into the error of amending the aw~rd. The evidence contained in the
award throughout provides incontrovertible proof thatl this flat increase
was never originally intended in the award. The amendment! has, resulted in tho Tribunal making, as it were, a supplementary award, whereby
a further relief is being granted beyond that granted in the origimtl
award.
The original award was completed and signed by the Tribunal, and it cannot be reopened now except for the lin1ited purpose of
Rule 31. In travelling outside and beyond the terms of the original
award, the Tribunal has committed a jurisdictional error.
Our attention has been drawn to what purports to be an endorsement by counsel for the appellant on the application dated 22nd December, 1978
filed by the Union before the Tribunal to the effect that the appellant
would submit to whatever the Tribunal decided, and it is urged that
the appellant is bound by the order made on the application. It is
an accepted principle that consent by a party cannot confer jurisdiction on a court.
What is without jurisdiction will remain so. In the
circumstances the order of 22nd December, 1978 is invalid so far as
it amends paragraph 23 of the
original award.
The corrigendum
amending the award in consequence is liable to be quashed. The
second contention of the appellant is entitled to succeed.
I shall now consider Civil Appeal No. 2300 of 1979 filed by the
workmen.
The only contention of the workmen is that the Tribunal
should have fixed the dearness allowance in communion with the costi
of living index. It is wrong in principle, it is said, to provide a fixed
dearness
allowance.
Reliance
was
placed
on
The
llindustali,
Times Ltd., New
Delhi v.
Their
Workmen(')
where it was
observed
by · this
Court
that dearness
allowance
should
no~
(1) [1964] I S.C.R. 234, 247.
•
·~.
TATA CONSULTING ENGINEERS V, WORKMEN
179
(Chinnappa Reddy !.)
remain fixed at any figure but should be on a sliding scal€l
A
in order to neutralise a
portion of the increase in the
cost
of living.
Reference was also' made to Bengal Chemical & Pharmaceutical Works Limited v. Its Workmen(~). Now, it is not a universal
rule that the dearness allowance should in all cases be. correlated with
the cost of living index.
The Tribunal, in th~ present case, considered
the matter and found it sufficient and in accord with justice that the
wage scales should be restructured with suitable increments provided
therein. It noted that dearness allowance was being granted by the!
appellant at 10% of the salary subject to a minimum of Rs. 50/· and
~
•· house rent allowance at 30% of the basic salary.
Having resard to
the not inconsiderable improvement in the level of the basic wage, it
observed that there would be a consequent increaso in the dearness\
allowance and house rent allowance. In view of thC: increase so
secured, the Tribunal rejected the suggestion that a slab system should
be introduced in the dearness allowance or that there should be any
other modification of the principle on which dearness allowance wail
being presently granted.
It declared that the cumulative efiect of an
improved wage structure together with dearnesli.allowa11ce operating on
a slab system would throw an impossibl~ burden of about Rs. 1 crore
on the financial capacity of tho appellant.
It W11S open to the Tribunal
to adopt the position which it did. It the dearness allowance is. >Jinked
with the cost of living index th~ whole award will have t<> be reopened
and the entire basis on which it has been made will have to be recon·
sidered.
The· award is a composite document in which the severa]
elements of increased wage scales, larger increments, longer span ot
20 years for earning increments, dearness allowance at 10% of the
basic wage, besides several other benefits, have been integrated into a,
balanced arrangement in keeping with what the Tribunal has found
to be the financial capacity of the appellant. It is not possible to
' ~ maintain one part of the award and supersede another.
Accordingly, the appeal filed by the workmen must fail.
In the result, Civil Appeal No.