# THE WORKMEN OF WESTERN INDIA MATCH CO. LTD v. THE WESTERN INDIA MATCH CO. LTD

- **Citation:** [1963] 2 S.C.R. 27
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Bench:** A. K. Sarkar, K. SuBBA RAO, J. R. Mudholkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-workmen-of-western-india-match-co-ltd-v-the-western-india-match-co-ltd-2688
- **Pages:** 20

## Headnote

27
1 ndustrial Dispute-Scale bf pay-Oondition of aervice
') -Dearness allowance-Employees of sales office and factory,
·• if cojtld be
equated - Earlier settlement-Termi..ation ofOharter of demand, if co·ald be treated a• notice of termination
of previous settlement-Industrial DispvJte Act, 1947(14 of
1947), 8. 19( 2).
R the respondent company has got a factory, with an
office a ttachcd thereto, in Alambazar a suburb ot Calcutta
and also has its sale~ office in the commercial area of Calcutta
Without first giving a formal notice under s. 19(2) of the
Industrial Disputes Act, terminating an earlier settlement,
the Union made fresh demands, contained in a cliiirter of
demands, inter alia for the enhancement of dearness allow-
}' ance, alteration of the ba~is of computing it and the revision
of pay scale alleging that what they get is much below what
corresponding employees at the sales office get and . that the
. present rates are inadequate in view of the rise in cost of
living.
•
f
The dispute relating to dearness allowance alone was
first referred to the Tribunal but later the dispute relating to
grades and scale of pay was also referred to the same Tribu•
nal..
The Tribunal after overruling the preliminary objection
of the company that it had no jurisdiction to proceed wtih
the reference because no notice terminating the settlement as
cont~mplateol by s. 19(2) of the Act was given by the workmen, found that the employees were not entitled to higher
dearness allowance or to the alteration of the. basis of computation of the dearness allowance, but there has been a change
in the circumstances which justified a revision of the scale of
pay.
Held,
(1) that when during the pendency of negotiations the Union by a letter had asked the company to treat
the charter of demand as a notice under s. 19(2) of the Act
'<( without first terminating an earlier settlement under an award
and the compa.ny had agreed to refer the mat\er i!l dispute
19fB
A;f'il 11.
11~1
Tiii ti'-flmtn of
W 1st"n H atd1 Co.
Lid, ..
1 li1 W ultrn Indio
Jf okh Co. Lid
28
SUPREME COURT REPORTS [1963]
to ~he adjudication of a tribunal, the question of a formal
notice under s. 19(2) of the Act was immaterial for the
r ·
presentation of the charter of demand followed by 'the letter
"'
amounted to a notice of termination of settlement .
·
(2)
that the members of a Unior. like the one of
employees of the respondent's factory have been dealt with
by the compa.ny on a different footing from the employees of
a s~les o~ftcc 1n Calcuua, the former being employees of an
eng1neer1ng concern and the latter of a mercantile one, who
arc governed by the recommendation of the Bengal Chamber
of Comrncrce and, therefore, the case of the factory employees /
cannot be equated with that or the sales office ernployecs.
4
,,.
The facrory employees cannot, as of right, demand that the
brnefit of the rates fixed by the Bengal Chamber of Com·
mcrce be also given to them, because the rates were not
intended to be applied to them.
C/erl:s of Ga/cnlla Traminays v. Galmtta Tramwnys Co.
J,td. [1956) S.C.R. i22, applied.
'-
'
(3)
that there
is no valid rea•on
for
compelling
employers
to
offer
uniform
tcrn1s
of employment
to
their employees
working in different
establishments
hecausc variou5 considt>ration:-. must enter into the que1tion
~./....
such as the value of their work to the employer, the CmJr
toyer's ability tn pay, the cost of living, the availability of
persons for doing the particular kind of work and so on.
The action of an employers who docs not offer uniform
condition of service to all its employrcs doing work which,
broadly speaking may be called similar, can not be regarded
as discritninatory or a breach of any principle of industrial
law.
(4)
that the Industrial Tribunal in refusing to extend
to the employees of the respondent in the fartory in Alamba·
zar benefit of dearness allowance formulated by the Bengal
Chamber of Commerce has net contravened any principle
of natnral justic

## Text

2 S.C.R.
SUPREME COURT REPORTS
THE WORKMEN OF WESTERN INDIA
MATCH CO. LTD.
v.
THE WESTERN INDIA MATCH CO. LTD.,
(A. K. SARKAR, K. SuBBA RAO and
J. R. MUDHOLKAR, JJ.)
27
1 ndustrial Dispute-Scale bf pay-Oondition of aervice
') -Dearness allowance-Employees of sales office and factory,
·• if cojtld be
equated - Earlier settlement-Termi..ation ofOharter of demand, if co·ald be treated a• notice of termination
of previous settlement-Industrial DispvJte Act, 1947(14 of
1947), 8. 19( 2).
R the respondent company has got a factory, with an
office a ttachcd thereto, in Alambazar a suburb ot Calcutta
and also has its sale~ office in the commercial area of Calcutta
Without first giving a formal notice under s. 19(2) of the
Industrial Disputes Act, terminating an earlier settlement,
the Union made fresh demands, contained in a cliiirter of
demands, inter alia for the enhancement of dearness allow-
}' ance, alteration of the ba~is of computing it and the revision
of pay scale alleging that what they get is much below what
corresponding employees at the sales office get and . that the
. present rates are inadequate in view of the rise in cost of
living.
•
f
The dispute relating to dearness allowance alone was
first referred to the Tribunal but later the dispute relating to
grades and scale of pay was also referred to the same Tribu•
nal..
The Tribunal after overruling the preliminary objection
of the company that it had no jurisdiction to proceed wtih
the reference because no notice terminating the settlement as
cont~mplateol by s. 19(2) of the Act was given by the workmen, found that the employees were not entitled to higher
dearness allowance or to the alteration of the. basis of computation of the dearness allowance, but there has been a change
in the circumstances which justified a revision of the scale of
pay.
Held,
(1) that when during the pendency of negotiations the Union by a letter had asked the company to treat
the charter of demand as a notice under s. 19(2) of the Act
'<( without first terminating an earlier settlement under an award
and the compa.ny had agreed to refer the mat\er i!l dispute
19fB
A;f'il 11.
11~1
Tiii ti'-flmtn of
W 1st"n H atd1 Co.
Lid, ..
1 li1 W ultrn Indio
Jf okh Co. Lid
28
SUPREME COURT REPORTS [1963]
to ~he adjudication of a tribunal, the question of a formal
notice under s. 19(2) of the Act was immaterial for the
r ·
presentation of the charter of demand followed by 'the letter
"'
amounted to a notice of termination of settlement .
·
(2)
that the members of a Unior. like the one of
employees of the respondent's factory have been dealt with
by the compa.ny on a different footing from the employees of
a s~les o~ftcc 1n Calcuua, the former being employees of an
eng1neer1ng concern and the latter of a mercantile one, who
arc governed by the recommendation of the Bengal Chamber
of Comrncrce and, therefore, the case of the factory employees /
cannot be equated with that or the sales office ernployecs.
4
,,.
The facrory employees cannot, as of right, demand that the
brnefit of the rates fixed by the Bengal Chamber of Com·
mcrce be also given to them, because the rates were not
intended to be applied to them.
C/erl:s of Ga/cnlla Traminays v. Galmtta Tramwnys Co.
J,td. [1956) S.C.R. i22, applied.
'-
'
(3)
that there
is no valid rea•on
for
compelling
employers
to
offer
uniform
tcrn1s
of employment
to
their employees
working in different
establishments
hecausc variou5 considt>ration:-. must enter into the que1tion
~./....
such as the value of their work to the employer, the CmJr
toyer's ability tn pay, the cost of living, the availability of
persons for doing the particular kind of work and so on.
The action of an employers who docs not offer uniform
condition of service to all its employrcs doing work which,
broadly speaking may be called similar, can not be regarded
as discritninatory or a breach of any principle of industrial
law.
(4)
that the Industrial Tribunal in refusing to extend
to the employees of the respondent in the fartory in Alamba·
zar benefit of dearness allowance formulated by the Bengal
Chamber of Commerce has net contravened any principle
of natnral justice or any important principle of industrial
law. Even assuming that
an Industrial
Tribunal
has
exercised its discretion wrongly in not awarding uniform •
dearness allnwance to all the employees of the same employer
working in different establishments, that is no ground for
interf<rence under Art. 136.
State of Madl1ya Pr<l<luh v. G .. c. M~nmi:ar (195">) s .. C.R.
and Ilrngal Chemical & l'!tarmaceutacal JI· orks f,td. Ga/r.utia V•
Their 11'orln1rn, [1959) S. C.R. 136, ralied on.
"
2 S.C.R.
SUPREME COURT REPORTS
29
(5) that an award of an Industrial Tribunal cannot
ordinarily be revised unless there is a circumstances ; but
)
hfcre, .therhe hasdbec;n ad
1
change of cir~umstahnces bTech~use. cost
........
~
o IiVIng as a m1tte y gone up since t en.
is is so
notorious a fact that court is entitled to take notice of it.
The object of awarding d~arness allowance is to neutralise,
at least partially, the Jise in the cost of living and in the
circumstances the fact01y employees are entitled to have the
old basis revised.
Burn & Co. ltd. v. Their Workmen, [1956] S. C.R.
781, referred to.
~
ClvIL APPELLATE JuRISDICTICN : Civil Appeal
No. 429 of 1961.
Appeal by special leave from the Award dated
September 16, 1958, of the Fourth Industrial
Tribunal,-West Bengal, in Cases Nos. VIII-II of
1958.
N. 0. GhaUerjee, A. N. Sinha andDipak Dutta
Choudhri for the Appellants.
O. K. Dapht,ary,
Solicitor-General of India,
f B. Sen and B. N. Ghosh for the respondent.
1962. April 11. The Judgment of the Court
was delivered by
MuDHOLKAR, J.-This is an appeal by special
leaV'e against an award made by the court of In·
dustrial Tribunal, West Bengal, Calcutta.
The relevant facts are these: The Western
'
India Match Co., (respondent) has got a factory
-,
with an office attached thereto in Alambazar, which
is a suburb of Calcutta. It has also got a sales
office at Calcutta which is situate in the commercial.area. Certain disputes arose between the fac·
tory employees and the respondent, pursuant upon
1
the' presentation of a charter of demands by them
" to the respondent on January 25, 1957. These
demands were seven in number. The demands
~, included enhancement of the dearness allowance
~
' and alteration of the basis of computing it They
1961
n.w .. -o1
W eshrn M atilt Co •
Ud.
v ••
Tie w .. ,.,. lMio
Maleh Co. Lid.
1961
..
T Iii ff' 1st1rn lndi•
MGl<AC•.Ltd.
30
SUPREME COURT REPORTS [1963]
also included a demand for the revision of pay
scales. The respondent was unwilling to concede
the demands and thereupon the appellant-union
approached the Labour Commissioner, West Bengal.
Apparently on hie suggestion certain conferences
were thereafter held between the parties and the
Conciliation Officer with a view to arrive at a settlement.
During those conferences certain counter
proposals were put forward by the respondent but
they were not accepted by tho union. Eventually
the Government of West Bengal by its order dated
January 14, 1958 referred the dispute rela.tin~ to ,·
the dearness allowance alone to tho Fourth Industrial Tribunal at Calcutta but not the other dispute3.
Conciliation proceedings regarding other disputes were resumed after the aforesaid reference
was made aud on May 23, 1958 a settlement was
reached between the Union and the respondent on
a.II issues excepting the one relating to grades and
scales of pay. It was a.greed that this iBSue be
referred for adjudication to the same tribunal which
was dealing with the question of dearness allow- 't
a.nee.
Upon this the Government of West Bengal
referred that iBSue to the Fourth Industrial Tribunal, West Bengal by order dated June 3, 1958.
Before dealing with the contentions of the
parties it would be desirable to set out some more
fa.eta.
The Western India Match Co., has got factories not only at Alambazar but also at Bareilley
in Uttar Pradesh,
Ambernath in Maharashtra,
'
Tiruvottiyur in Madras and at Port Blair. The
'
l!'actory
at Alambaza.r was established in tho
year 1930.
Besides theae factories the respondent
maintains separate sales offices at various places
in India to push sales and execute orders. One of
suoh sales offices is located in the oity of Calcutta.
At the time of the reference I, 866 persons ,
were employed in the factory at Alamba.za.r.
Out
~··
j
'
)
2 S.C.R.
SUPREME COURT REPORTS
31
of them 1,504 were daily-rated or piece-rated employees and the remaining 362 were monthly-rated
employees. Amongst them 27 were officers, 67
clerks and 32 supervisors. The rest were bearers,
watchmen, malis, fitters etc. Apart from the officers, all the monthly-rated employees admittedly
fall within the definition of workers .under the factories· Act.
In the year 1946 a union called the Wimco
\
Mazdoor Union was formed comprising only of the
\
daily-rated and piece-rated workers. This union
was given recognition by the respondent. In the
year 1950 another union called the Wimco Employees' Union cC;mprising solely of the monthly-rated
employees, other than officers, was formed and was
du~y recognised by the respondent. One of the
conditions under which the recognition was given
was that its membership should consist only of monthly-rated employees of the factory except the
officers.
(
Shortly after the recognition of this Union it
entered into an agreement with the management
ofthe respondent company whereby the scales of
·pay, dearness allowance and various conditions of
service of the monthly paid employees at Alamba'zar factory were settled. The date of this
agreement is September 29, 1951.
•
Certain . disputes arose between the Union and
· i
the. respondent in the year 1954 which were referred by the Government of Wflst Bengal by its order
dated September 1, 1954 to the Second Industrial
Tribunal, West Bengal, for adjudication. In the
course of the proceedings, however, an agreement
was reached between the appellant-union and the
(
respondent on April 29, 1955.
Eventually on September 15, 191)5 an award made in pursuance of
-\' the settlement arrived at was published in the Cal-
. cutta Gazette. It may be mentioned that the
1968
1'he Work- of
Waslern ,uatch Co.
Lid.
••
Thi Wesfam In.di•
Match Co. Lid,
Mudholkat J,
19lt
Tire W or.lmt11 of
W11ttrn Mo/ell Co.
Ltd.
v.
Tiu W1mrn lt1cl1a
M •Ith Co. LU.
--
32
SUPREME COURT REPORTS (1963]
settlement related to various matters relating to
the conditk>ns of service of employees including
pay and dearni:-ss allowance. Further, under this ,.
agreement the production bonus which the monthly
> ·
rated workmen receh,ed was merged in their basic
pay. The aforesaid award was terminable upon
giving two months' notice commencing after Decem·
her 31, 1956.
Without giving a formal notice
terminating the agreement the appellant-union
made fresh demands on January 25, 1957 pertaining to the same matters which were oovered by
•
that agreement.
;
What happened thereafter has already been
indicated by us above.
The main ground on which the appellant·
union sought revision of the previous award and
the alteration of the basis of comput&\ion of the
dearneBB allowance and alteration of the scales of
pay is that what the respondent is paying to the
factory employees works out to something very
much below what corresponding employees st the
sales office get. Tbis, they 11ay, is unfair. The
second ground on which their claim with respect
to these two matters is based is that other comparable concerns give better terms to their employees than the respondent. The third ia that the
present rates are inadequate in view of the rise in
cost of living and the fourth, that the respondent
in making large profits anri can easily afford an
upward revision in dea.rncss allowance and sea.lea
of pay.
On behalf of the respondent a preliminary
objection was taken to the effect that the tribunal
had no jurisdiction to proceed with the reference
because no notice terminating the settlement as
contemplated by s. 19, sub-s. 2 of the Industrial
Disputoe Act, 194 7 was given by the appellant. On ~
merib! its contentions were :
..
\
,
.
'·
,.,
...
J
'
•
(
2 S.C.R.
SUPREME COURT REPORTS
33
(I) that the oonditiilns of service of
employees of the sales office are different from
those working in the factory;
(2)
thll.t there has been n'l material
change of circumstances since the making of
the previous award justifying any revision of
the scales on the lines suggested;
{3) that
the conditions
of service
to soales of pay and dearness allowance
prevailing in the factory at
Alambazar
are as good,
if no
better, than those
of employees of other co·1cerns such as
Bridge ,'It_ Rnof C0 , Imperial Chemical Industr;es, Hindu;than Lever and ]\[arshall & Sons
which are in fact much larger concerns · ar.d
c>innot be compared with the respondent-company;
( 4) that t.he respondent has not the capa·
city to pay higher dearness allowance to its
monthly-rated employees in the factory due
to increase in the cost of production, labour
charges, <:nhancement of excise duty and keen
com petition of the products which have
together resn Jted in reducing the percentage
of profits
.
The preliminary objection was overruled by the
Tribunal. It, howevrr, held that the employees at
the factory were not enti"tled to a higher dearness
allowance or to the alteration of the basis of computation of the dearnPss allowance but that there has
been a chang~ in the circumstances which justified a
revision in the scales of pay. The Tribunal accepted the contention and adopted the revised males
of pay offered by the respondent.company to the
app<'lllant-union during the conciliation proceedings.
Mr. B. Sen for the respondent.company reiterates the objection based on s. 19(2) of the Indust.iial Disp1:tes Act, 1947, That provision is to the
Thi Workm~n of·
We,teTn Match Ce.
Lrrl.
v.
The West1rn l11di ..
Maleh Co· f,td.
M udho/kar .'!.
-
Th# JV orknun of
W1rlnn M otch C4.
Ud,
••
Th6 W111,,n /,,di•
JI ••ch C.. LM.
JI aiMlloar J.
34
SUPREME COURT REPORTS ll963]
effect that a settlement arrived at between the
employer and the employees shall be binding for
41
Buch period as is agree'.! upon by them and if no
such period is agreed upon for a period of six months
from the date of the settlement and shall continue to be binding on thl'm after expiry of that
period until the expiry of two months from the date
on which a notic" in writing of his intention to terminate the settlement is given by one of the
parties
to
the other
party.
Unquestionably
the parties had arrived at a settlement on April 29,
,,"
1955 relating, amongst other things, to 'dearness
allowance and the saales of pay and no formal
notice as contemplated by sub s. (2) of s. 19 was
given. In our opinion, however, it is not open to
the respondent-company to raise this contention in
so far as revision of pay scales is concerned because
in the memorandum of settlement May 23, 1958
signed by the representatives of tho parties to this
appeal it is clearly provided that the revision of \
scales of pay be referred for adjudicat.ion to the
same Industrial Tribunal which wa~ dealing with
the question of dearness allowance.
Besides, that,
this memorandum contains the following recital:
"Parties were met jointly on several occa
sions as a. result of which the entire dispute,
except the issues of (I) Dearness allowance
(which has already been referred to the Fourth
Indu•trial Tribunal for adjudication) and (2)
}ievision of scalE>s of pay, has been settled on
the following terms; ......... "
This recital shows that the respondent was agreeable
to refer to the Tribunal not only the issue relating
to revision of pay scales but also that dealing with
dearness allowance.
Further, in para. 37 of ita
written statement the r<'spondent-company clearly
accepted the position that the Tribunal had jurisdic- •
tion to deal with the issue of dearness allowance.
Thie circumstance precludes the responc!ent:from
,
'
2 S.C.R.
SUPREME COURT REPORTS
35
1
now objeoting to the jurisdiction of the Tribunal,
.;i. A part from that we may point out that in its reply
.; dated Maroh 29, 1957 to the charter of demands
sent.on behalf of the appellant-union it was stated
that the previous settlement had not been validly
terminated and in answer to that the .General ::iecre·
tary. of the Union wrote on April 8, 1957 sayi!lg that
various representations made by the union to the
respondent and the presentation of the charter of
) demands amounts to a notice of termination of the
.,. settlement. Thus, though no formal notice under
s. 19(2) was. given this letter can itself be construed
as notice within the meaning of that provision. It
may: be noted that the representation was made
long after tho expiry of two mon1hs from this date.
For these reasons we overrule the contention of
Mr. Sen.
, Now, coming to the merits, the main point
urged by Mr. Chatterjee on bL·half of the union i•
J that there has been discrimination between the
'
;
employees of the respondent in the Alam bazar
factory and their counterparts i)i the sales office in
Calcutta.
According to him eve11 though these persons dJ the same kind of work they are given different grades and scales of pay and different scales of
dearness allowance He contends that 1 bci cm ployees
of the same employer doing tlie same 11 ind of work
, in the same city 011ght not to be differentiated in
this manner and that decision of the Tribunal denier!
the members of the appellant-union equality with
their counterp:irts in the sales offiee and is contrary
to the principles of industrial law we may, however,
point out that the appellant union claimed party
with the sales office employees only in the matter
t of dearness allowance and have referred to the existence of different pay scales in the sales office only
in support of their claim fol" an upward revision of
-<the present pay scales. It io, therefore, not open to
learned counsel now to urge that the p1y scales also
1962
The Workmen of'
'\-\T estern Match Co.
L•d
v.
The Western Indi'J
Match Co. Ltd.
M udholkar J.
1,0,
TM Work,,,m•f
Wut•rn MGZth c •.
Lid
...
~
Wut•'" fnd;tJ
JI 01<h Co. Lt,,
JI""""' .. ' J.
36
SUPREME OOURT REPORTS [1963)
should be same for the factory employees as for the
sales office employees. We shall, therefor(', consider
<it
the argument based on the ground of unwarranted
discrimination only in so far as it relates to the
question of dearneBB allowance.
For considering this argnment i' is desirable
to bear in mind the history of industri!ll adjudication in Bengal and also the precise reason why a
different basis for computing dearness allowance is ,
applied to the respondent employees in the sales ~·
office from that applied to its factory employees.
Towards the end of tho year 1945 the Bengal Chamber of Commerce made an enquiry as to the cost of
living of the clerical staff employed in mercantile
firms in the city of Calcutta. On tho basis of that
enquiry it fixed a certain amount as dearnesH allowance for these employees. It also fixed for the
employees what it called the middle class cost of
living index an<i recommended acceptance of its ~
findings to its constituent members. Mr. Sen stated ·
that the respondent's sales office is a member of the
Bengal Chamber of Commerce but its factory in
Alambazar is not a member of tho Chamber of Commerce anrl this waa not controverted by Mr. Chatterjee.
In the year 1948 disputes arose between the
employees and employers of engineering firms in ,
Calcutta as well as employees and employers of ,
mercantile concerns in Calcutta. These disputes
were referred to separate Industrial Tribunals. The
first Engineering Tribunal waa appointed on July 3,
I !J48 to which disput!'S rPlating to 119 companies,
inoluding the respondent's factory, were referred.
The award made by it was eventually published in '
the Calcutta Gazette and effect was given to it.
Further disputes arose between some
engineerin~
concerns and their !'mployees. These were referred
to a 8econd Engineering Tribunal on August 31, 1950
2 S.C.R.
SUPREME COURT REPORTS
37
and effect was given to its award. It would, there-
·~ fore, appear that members of a union like the. one
; of em,iloyees of the respondent's factory at Alam7 bazar have been dealt with on a different footing
from the employees of a sales office in C~lcutta, the
former being employees o'f an engineering concern
and the latter of a menantile one. It was, however,
contended before us that they are not two· independent tJnderta.kings but parts of the same one, that
, is, Western India Match Co., and, thereforP, in the
) matter of payment of dearness allowance at least
. .,_ they should be dealt with on the same footing.
As we have already pointed out the employees
in the sales office are governed by the recommendations of the Bengal Chamber of Commerce which
the respondent was more or less bound to accept to
be in line with other similar establishments and,
therefore, the case of the factory employees cannot
be equated with that of the sales office employees.
In Qlerks of Calcutta Tramways v. Calcutta 'l'ram-
~ ways Co. Ltd.(1) the clerical staff of the Calcutt&
Tramways claimed that since they belonged to the
mid<1.le class they should be paid dearness allowance
on the basis of the finding of the Bengal Chamber
of Commerce. Their plea was nagatived by this
Court on the ground that in the matter of grant ·of
, dearness allowance no hard and fast rule is applicable to all kinds of employees, that there are diffe-
> rent grades amongst middle ·classess and the clerical
, staff of the Calcutta Tramways cannot claim to be
· awarded dearness allowance at the rates fixed by
the Bengal Chamber of Commerce for mercantile
firms. It may further be pointed out that . the factory employees cannot all claim to belong to the
. middle class because admittedly two-thirds of them
7 belong to what is known as the subordinate staff.
It may be that the clerical staff both in
, --Oaloutta proper and in Ala.mbazar doe11 work whieh
(I) (1956] S.C.R. 772.
116!
Thi W ork1111n •I
Westlrn Match Oo.
Ltd.
y,
TM W6sf1111 lndi•·
M ateh Cc. Ltd.
Jlwiholkar J.
1961
7h1 W01k111111 of
Western ,lf •·ch Co.
[Ad
'·
Tl~ W1stcrn b11/i3
Match Co, Ltd,
Mudholk" J.
38
SUPREME COURT REPORTS [1963)
ono set of clerks cloes iH not the same as that of the
other set. Cl•,l'ks in the factories hrwe to do
•.
i·ork in connection with tho manufacturing processeR
i
in the factory, the !about· cmploJ ed in the facto1y,
raw materials arriving in the factory. the finished
product8 of the factory and so on a.nd so forth. The
work which the clerical "taff in the sales office has
t.o do is connected with the marketing of the finished
J roduct, dealing with other firms, carrying on
<:Orrespondfncc with the head office and other
units and so on and so forth. There is no identity ,
in the work of tho two sets of clerical staff though •
there may be similarity. It is said that tho work
they do carries more responsibility. That may or
may not be so but clearly if the work rnrh set of
employees does is not identical, it would b<: open
to the cmployl'f to place different values on them.
The same thing could be said ah<ut the work of
the subordinate staff. If under these cirrnmstances
the respondent agreed to adopt a difft·rent mode
of computation of dearness allowanco in respect of \
the employees in the sales office from that offered
by it to th0 rmploJees in the factory, could it be
said that thic> respondent was making invidious
distinctiou? The sales office being a mercantile
office the respondent had to fall in line with other
similar establishments a.nd pay to the employees in
the Eales office the same dea.rneEs allowance as
other mercantile firms
wero
paying to their
employees.
In the
cirlumot~nces the factory
employees cannot as of right demand that the
~
benefit of the rates fixed by the BPngal Chamber of
Commerce be also given to them though those
rates
were not intended
to be applied to
them.
Moreover it has to be borne in mind that in
the previous settlemf'nt the appellant-union was
content to accept the working class cost of Jiving~
index as the basis for determining their dearness
2 S.C.R.
-SUPREME COURT REPORTS
39
allowanc3 and even in their present demands they
~ have alternatively Mggested that the same be
, adopte<l with certain variations in the rates in
three slabs.
It iS' true that the employees in Alambazar
as well as in Ci!.lcutta are living within the limits
of the Corporation of Calcutta. But that circumstance thongh relevant is not by itself sufficient to
"' justify payment to them of the same rate of dearness
] allowance as the sales office employees. We oannot
• ignore the fact that the employees of other factories
situate in that area are not pa.id dearness allowance
at the rates formulated by the Benga.1 Chamber of
Commerce and, therefore, if those fates are' adopted
by the respondent with respect to the factory employees tl:ie existing industrial peace in that region
may be destroyed. The tribunal must, therefore, he
said to have exercised its discretion properly in
not· acceding to the appellant's demand in this
i resrieot.
' We may also point out that the employees in
the faotory have been recruited on terms and conditions which from the beginning are different from
those that govern the sales office employees. It is
not ' disputed that certain benefits such as those
, relating to rations, free quarters, gratuity etc.,
which are extended to the factory employees are
> not extended to the sales office employees. What
• is said, however, is that the sum total of these con·
sidered along with the pay and dearness allowance
of the factory employees still place them at a disadvantage as compared to the sales office employees.
It is true that the sales office employees are, by and
· large, in a comparatively better position; but that
t again is due to the fact that recruitments in the two
. establishments have all along been made on diffe·
~rent terms and conditions.
We do not think that there is any valid reason
for compelling employers to offer uniform term.ii of
1911
Th. Work'"'" •f
W 1stern .111. •leh c,.
Ltd.
••
Tl" W .,,,.,,,, lndi•
JI at ch Co, Ltd.
JIUtJutw J,
Th• lF erimtfl of
Wtsrtn• 1fotch Co.
LUI. ..
Th, Wcr.e1n /,.dia
Makh Co. LUI
Mudholka• J.
40
SUPRE.ME COURT REl'ORTS [1963]
employment to their employees working in different •
establishments because various considerations must '
enter into the question such as the value of their
work to the employer, the employei's ability to pay,
the cost of living, tho 11.vailability of persons for
doing the particular kind of work and so on.
Indeed, the Minimum Wages Act itself proceeds on
the basis that the employer h11s large di•cretion in
so far as the most important condition of service is
concerned, that is, pay, so long a.t it is not below :
the miniro'um wage prescribed. It is a. well known ;
fact, that the Hggest, employer, the State, does not
offer uniform conditions of service to a.II cmployet>s
doing work which, broadly speaking, mRy be ca.lied
similar. Thus to take ont1 illustmtion, the clerical
staff and the menial staff-now called class IV
staff-employed in the Secretariat are go ;erncd by
terms and conditions of service different from those
prevailing in other offices such as those under the
Delhi Administration. High powered Pay Commis. \
sions ban• not regarded this as discriminatory treat·
ment or breach of a principle of industrial law. In
the State of ;lfa.dhya Prude.sh v. G.C. Man<iawar (')
it was contended on behalf of tho clerical staff in
the State ol Madhya. l'ra.desh that they should be
paid dearness allowance a.t the same r11.te a.s the
Central Government employees posted in Madhya
.t'radesh on the ground that they were doing similar
work a.t the same place.
'J heir contention was, •
however, rejected by this Court.
•
Looking at the mstlcr thus we cannot say that
the Industrial Tribunal in refusing to extend to the
employees of the respondent in the factory in Alamba.za.r the benefit of dearness a.llowa.nce formulated
·by the Benga.l Chamber of Commerce has contra.ve- '
ned any prinoiple of natural justice or any important
pdnoiple of industrial la.w.
ID this connection we~
(I) (J9S5) I S,C,R. 599.
2 s.c.R.
SUPREME COURT REPORTS
41
m~y refer to the. decision in Bengal Chemic~~ '!"
Pharmaceutical
Works Ltd.,
Calcutta
v.
'1 heir
;
Workmen (1) where Gajendragadkar, J., who spoke
,
fur the Court observed:
"Though Article 136 is couched in widest
terms, it is necessary for this Court to exercise
its ctiscretionary jurisdiction only in cases
wbure awards are made in violation of principles of natural justice, causing substantial and
grave injustice to parties or rairns an important principle of industrial law requiring elucidation and finoil decision by this Court or discloses such other exceptional or special circumstances which merit the consideration of
this Court."
Therefore, even assuming that an Industrial Tribunal has exercised its discretion wrongly in not awarding uniform dearness allowance to all the employees of the scime employer but who are working
.., in different establishments, that is no ground for
or interference under Art. 136.
The second ground on which the 'lribunal's
decision regarding dearn,,ss allowance is challenged
is that even at the stage of giving evidence
Mr. Wasmouth, the General Manager of the respondent s11,id that the respondent still sticks to the
; offer regarding dearness allowance but despite that
the Tribunal did not make any change in the dear-
;. ness allowance. It is contended on the basis of
~
this stand of Mr. Wasmouth that the respondent
accepted the positiun that there was scope for raising 'the dearness allowance.-
In answer to this
argument Mr. B. tien urged that the offer which the
company had made was a package dea.l but since
~
the appellant-union was not willing to accept the
1 whole of the respondent's offer, the Tribunal was
right in not granting any increase in the dearness
~-allowance. We may point out, however, that the
(I) (1959) Supp. 2 s.C.R. 136, 140.
•
1962
The W orkmm oJ
Jfestern Match Co.
Ltd.
v.
The Western India
M atek Co. Lid.,
Mudholkar J.
1962
Tlr1 Wor.+11t,n of
Jf tsl 11 n JI .. 1,1& Co.
~d. ..
TJ.1 SV1s1ern India
JI orclt Co, Ltd.
Mutlltollur J,
42
SUPREME COURT REPORTS [1963]
only outstanding questions between the parties wero
two-one relating to tho dearneBB allowance and
the other relating to the scales of pay. A compara-
•
tive chart showing the union's dfmand and the com-
•
pany's offer of the existing scales of pay, dearness
allowance, superannuation, casual leave, sick lcavo
and over-time has been placed on record and is
annexure G.I. We aro not concerned with matters
other tha.n the first two and we, therefore, reproduce
below only that portion of tho oho.rt which rela.tes
to the first two of these matters:
I
Union's demand
Rs.
Company's offe~
Hs.
I. Grade &A I :J5/-
1/8/-
65/- (30 yrs.) 30/- 1/4/·
50--EB-1/4/- 55/-
scales:or A 2 40/-
2/8/-
90/-
,,
35/- 1/4/-
55-EB-l/4/- 60/-
pay
A 3 60/-
3/8/- 130/-
,. 60/- 2/0/- 80/-
B 1 65/-
5/0/- 115/.EB-7 /- 55/·4/0/- 95/-
EB-5/- 125/-
185/-(20 yrs.)
no offer
C l 75/- 6/0/- 135/-EB-8/- 70/- 5/8/-125/-
EB-7/-
•
215/- (20yrs.) 167/-EB-195/-
<'.
C 2 95/- 8/0/- 175/-EB-12/- 85/-7/8/-160/-
•
EB-10).
295/-(20 yrs.)
220/·EB-10/-260/-
C 3 120/- 12/0/- 240/-EB-18/- 110/-10/-210/-
EB-16/.
420/-(20 yrs.)
306/-EB-16/-370/-
C 4 Upto a. limit of Rs. 650/-
Upto a._
limit of RI. 500/-
-I
~
'I
2 S.C.R.
SUPREME COURT REPORTS
43
A. As per sales office
2. DearEmployees
No offer
ness
on
allowa.nce
B. Rs.
Rs.
l to 50/-basic
51 to 100
.,
101 to 150 ,,
151 to 200 ,,
201 to 250 ,,
125%, l to 25/· basis 125%**
25% , 26 to 50
,,
40<y,
17% 51 to 150 ,,
30%
12% 151 to" 200 ,.
12%
7% 2,Jl to 250 ,,
7%
2!il to 300 ,,
5% 251 to 300 ,,
5%
In addition 3% for
In addition 3%
for
every 5 pts. rise
every 5 pt11. rise
or fail of workor fail of working class index
ing
class
index
figure.
figure.
** Adjusting the existing
R. B. with this salb.
It will be clear from this that the union had
made alternative demands in respect of dearness
allowance, one was that the same scale as
that for sales office employees should be adopted
and the other was variation in three slabs of the
present scheme accepting as the basis. the working
class cost of living index figure.
The company
refosed to make any counter-offer with regard to
th1 primary demand of the appellant-union.
But
in regard to the alternative demand it made a.
counter-offer.
If we understand Mr. Wasmouth
right the respondent company stood by its counteroffer . based on the working class cost of living
index figures before the Tribuna.l even thOUflh thl'
1161
Tlie W orkmtn •/
W1s1trn M a1ch C1.
L1&.
••
Thi W11tern·lntli•
Jlatcfl (,'1. Led.
Jli.dhtlk•r .J.
1961
'Ill# Workin,n of
Wes 1tTn ,1Jatc1' C •.
l.14.
v.
T"4 W t1tpn lndi"
Match Co. Lid
Mudllelleor.),
44
SUPREME COURT REPORTS [1!163]
conciliation proceedings broke down.
During these
proceerlings this counter·oifor was linked with the
crmnter·offe,r pertaining to grades and scales of pay.
Presumably, therefore, the company regarded the
pa<'kage deal not merely as a concession made for
put ting an end to disputes but also because it
regarded it as fair and the financial commitment
ent.iiled by it to be within its mean~. No doubt in
the evidence Mr. Wasmouth haa said that the
rcsponrlent.-company does not !tick to its
offer
relating to grades and scales of pay.
But that
would not render wh~t was a fair and reasonable
offer
during the 11tal!e
d
negotiations,
no
longl'r fair and reasonable or neceBSary.
The
Tribunal has
revised the
pay
scales
on
b'lsis of the
respondent's
offer.
If, there·
fore, dearness allowance is revised on the basis
of the respondent's offer what would in effect
be done would be only that whioh
the res·
pondeut company during the conciliation proceedings had itsl'lf offered to do, a thing which was
considered to be fair and reasonable and
also
necessary.
In these circumstances we find
it
difficult to understand the principle on which the
Tribunal proceeded in refusing to revise the scales
of dearness allowance on the basis of the respondent-company's offer.
Though, therefor<', we reject the contention
of the appellant-union that the <learne88 allowance
should be fixed on the same basis as that obhining
in the sales office we think that in view of the
stand taken by the respondent-company throughout
the proceedings dearness
allowance should
be
revised in accordance with the oompa.ny's offer.
The faot that it made such an offer is indicative
of tw'o things : the neceBSity and propriety of
revision of the dearness allowance as well as the
ability of the respondent-company to pay higher
dearness allowance. It was no doubt oontended
(
I •
'
••
i
-1
2 S.C.R.
SUPREME COURT REPORTS
45
before ns that the offer was m:i.ie during negotiationi and wa.~ without prejudice .and wo should
therefore, keep it out of our mind. But we ·cannot
overlook the fact that Mr. Wasmouth stuck to. that
offer even after the conciliation proceedings had
ended infructuously and thus in efl'ect revived the
the original offer.
Mr. Sen, however, argued . that on the ha.sis
of the decision in Burn &:
Go. Ltd.,
v; · Their
Employees(') th'lt a.n aw"rd of fndustrial . Tribunal
cannot be reopened unless· it is established that
there has been a change in 'the circumstances on
the award is based and that since• there has been
no such change the award of' 1955 pertaining to
dearness allowance ought not to be revised.
It is
true that an award cannot ordinarily be revised
unless there is a change of circumstances.
But
here, there has been a change of circumstances
because cost of living has admittedly gone up since
then. This is so notorious a fact that we are
entitled to take notice of it. The object of awarding dearness allowance is to neutralise, at least
partially, the rise. in the cost of living and in the
circumstances the factory employees are entitled to
say that the old basis needs to be revised.
There
is thus no substance in Mr. Sen's argument.
On the. question of the grades and scales of
pay the contention of learned counsel is that the
Tribunal has not applied its mind to the question
bnt h'l<i mechanically accepted the respondent's
offer. This statement is not wholly accurate.
No donbt the Tribunal htJ.s accepted as reasonablE.
the offur which the respondent has made ; but ithas given reasons far doing so. In its award the
Tribunal Jias stated :
"The principal point made in support of
...;
the ilemand is that the grades and scales of
pay are too short and. that they should be
<•> [t956J s.c.R. 1a1.
1961
The Worhntn c.J
West1rn Matth c •.
Ltd.
v.
Thi Western Tndt'•
Match Co. Ltd.
Mudh,,l):ar J.
1511
Tira Worln:enoj
Ire t11n Na1c;h Co.
/JJ,
••
'Thi ,,,J:t•n lrziia
Ji •Uh C•. Ltd.
Mtt'h•lk•r J.
-46
SUPREME COURT REPORTS (1963)
extended with such modifications as may
appear nece88ary in the circumstances of the
caee."
Then a.fti>r comparing the exi1ting grades with the
company's offer tho Tribunal observed :
"It would appear at a glance at this
chart that the existing rates provide for
ace.Jes of pay in tho case of six, grades upto
I 6 yea.rs end in the oaee of one it provides
for ten years only. The Union·s demand is
for extending the scales upto 20 years in
place of ten and sixt~en years, and both the
minimum and maximum limit of the sea.lea
of pay would be raised in all oases. The
Company's offer except in the case of grade
B( I) if much in advance of the existing
grades and scales of pay.
There are good
j1rnt ificationR for revision of the grades and
and sea.Jes of pay, nnd the Company's offer,
in my opinion, should have been accepted by
the Union. Tho revision of the grades and
s~alt·• of pay as in the Company's off or will,
to a great extent., remove the hardshipa of
tho employees, who, for the present, must
remain sadsfied with such revision.
It bas, therefore, applied its mind to tho company's
offer and also borne in mind the demand me.do bv
tho union. Upon consideration of these mattri"s
the Tribune.I came to the <•onclusion that the company's offer is a reasonable one.
lte finding in
this regard is one of fa.ct and cannot bo permittl'd
to be challenged in an appeal under Art. 136.
In this view we allow the appeal partlJ and
direct that tho awe.rd be modified by providing
for a revision of the dearneBB allowance on the
basis of tho company's offer.
Subject to this
modification, the 8iJpea.I will be difimisEed.
In
view of tho partial success of the parties we make
no order as to costs. --- Appeal allail'ed i11 part.
I
•