# Wanchoo]. I959 October z6 I959 Dunlop Rubber Co Lid v. Workmen and Others

- **Citation:** [1960] 2 S.C.R. 51
- **Court:** Supreme Court of India
- **Decided:** 1958-09-04
- **Case number:** Civil Appeals Nos. 159 and 160 of 1958
- **Bench:** B. P. Sinha, P. B. Gajendragadkar, K. N. Wanchoo
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/wanchoo-i959-october-z6-i959-dunlop-rubber-co-lid-v-workmen-and-others-1874
- **Pages:** 7

## Headnote

Industrial Dispute-Comp,any carrying on business all over
India-Claim by regional employees for raising of age of retirement
and scale of gratuity-Power of Industrial Tribunal-If can modify
uniform conditions of service according to prevailing conditions.
The appellant company was an all-India concern and carried
on the major part of its business in Calcutta. Its clerical and
non-clerical staff in Bombay raised disputes relating to gratuity
and age of retirement and contended that the scale of gratuity
for both the clerical and non-clerical staff provided by the existing
scheme of the company was low and should be raised and that
the age of retirement for the clerical staff should be raised from
55 to 60.
The company resisted the claim on the ground that
the existing scheme having been enforced on the basis of an
ilgreement between the company and the large majority of its
staff, both clerical and non-clerical, working in Calcutta, the. same
could not be changed at the instance of a small minority. The
tribunal rejected this contention and raised the age of retirement
to 60. It also raised the scale of gratuity and made it uniform
for the clerical and non-clerical staff. The appellant reiterated
its contention in this Court.
Held, that although it was advisable for an all-India concern
to have uniform conditions of service 'throughout the country,
that were not to be lightly changed, inqusfrial adjudication in
I959
Brahmachari
Research I nstitule
v.
Their Workmen
Wanchoo].
I959
October z6
I959
Dunlop
Rubber Co .. Lid.
v.
Workmen
and Others
52
SUPREME COtJ,RT REPORTS [1960(2)]
India being based on an industry-cum-region basis, cases might
arise where it would be necessary to change the uniform scheme
so that it might accord with the prevailing conditions in the
region where the Industrial Tribunal functioned, in order to
ensure fair conditions of service.
Consequently, in the instant case, where the Industrial
Tribunal found that the existing scheme was neither adequate
nor in accord with the prevailing conditions in the region, it was
not bound to refrain from altering either the age of retirement or
the gratuity scheme on the ground the appellant's concern was
an all-India one.
Nor could the decision of the Tribunal to raise the age of
retirement of the clerical staff to 60 be said to be an improper
one.
Guest, Keen, Williams (Private) Limited, Calcutta v. P. ].
Sterling and Others, [1960] (1) S.C.R. 348 referred to.

## Text

...
S.C.R.
SUPREM~ COURT REPORTS
51
provided under s. 25F, and as the provisions of s. 25F
are better than the provisions of the A ward in respect
of retrenchment the workmen would be entitled to
compensation provided under s. 25F only, and not
both under that section and under the Award. The
appellant has already paid the compensation provided
under s. 25F; the workmen therefore are not entitled
to anything more under the Award. We therefore
allow the appeal, set aside the decision of the Appellate
Tribunal and restore that of the Industrial Tribunal in
this matter. As this question has come up to this
Court for the first time, we order the parties to bear
their own costs.
A j>peal allowed • .
THE DUNLOP RUBBER CO. (INDIA) LTD.
v.
WORKMEN AND OTHERS
(B. P. SINHA, C.J., P. B. GAJENDRAGADKAR and
K. N. WANCHOO, JJ.)
Industrial Dispute-Comp,any carrying on business all over
India-Claim by regional employees for raising of age of retirement
and scale of gratuity-Power of Industrial Tribunal-If can modify
uniform conditions of service according to prevailing conditions.
The appellant company was an all-India concern and carried
on the major part of its business in Calcutta. Its clerical and
non-clerical staff in Bombay raised disputes relating to gratuity
and age of retirement and contended that the scale of gratuity
for both the clerical and non-clerical staff provided by the existing
scheme of the company was low and should be raised and that
the age of retirement for the clerical staff should be raised from
55 to 60.
The company resisted the claim on the ground that
the existing scheme having been enforced on the basis of an
ilgreement between the company and the large majority of its
staff, both clerical and non-clerical, working in Calcutta, the. same
could not be changed at the instance of a small minority. The
tribunal rejected this contention and raised the age of retirement
to 60. It also raised the scale of gratuity and made it uniform
for the clerical and non-clerical staff. The appellant reiterated
its contention in this Court.
Held, that although it was advisable for an all-India concern
to have uniform conditions of service 'throughout the country,
that were not to be lightly changed, inqusfrial adjudication in
I959
Brahmachari
Research I nstitule
v.
Their Workmen
Wanchoo].
I959
October z6
I959
Dunlop
Rubber Co .. Lid.
v.
Workmen
and Others
52
SUPREME COtJ,RT REPORTS [1960(2)]
India being based on an industry-cum-region basis, cases might
arise where it would be necessary to change the uniform scheme
so that it might accord with the prevailing conditions in the
region where the Industrial Tribunal functioned, in order to
ensure fair conditions of service.
Consequently, in the instant case, where the Industrial
Tribunal found that the existing scheme was neither adequate
nor in accord with the prevailing conditions in the region, it was
not bound to refrain from altering either the age of retirement or
the gratuity scheme on the ground the appellant's concern was
an all-India one.
Nor could the decision of the Tribunal to raise the age of
retirement of the clerical staff to 60 be said to be an improper
one.
Guest, Keen, Williams (Private) Limited, Calcutta v. P. ].
Sterling and Others, [1960] (1) S.C.R. 348 referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos.
159 and 160 of 1958.
Appeals by special leave from the Award dated
September 4, 1958, of the Industrial Tribunal, Bombay,
in Reference (IT) Nos. 138 and 35 of 1958.
N. A. Palkhivala, S. N. Andley, J. B. Dadachanji
and Rameshwar Nath, for the appellant.
G. L. Dudhia and K. L. Hathi, for respondents No.
1and2.
1959. October 16.
The Judgment of the Court was
delivered by
Wan,hoo J.
\V ANCHOO J.-These two appeals by special leave
arise out of two references made by the Government
of Bombay in connection with a dispute between . the
appellant-company and two sets of its workmen,
name! y, clerical staff and staff other than clerical. The
clerical staff had raised four questions which were
referred to the Industrial Tribunal, Bombay for adjudi.-
cation. Of these, only two points survive in the present
appeal, namely, retirement age and gratuity. The
non-clerical staff had raised two questions of which
only one relating to gratuity arises before us.
It appears that the ap_Pellant-comp'.l'ny is. an al~
India concern but the maJor part of its busmess rs
concentrated in Calcutta. The number of non-clerical
staff outside Calcutta is very small as compared to the
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.....
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-
S.C.R.
SUPREME COURT REPORTS
:53
non-clerical staff in Calcutta while the clerical staff
outside Calcutta is much less than the clerical staff in
Calcutta. The company had a gratuity scheme in
force which applied to both clerical and non-clerical
staff, though there were differences in the scale of payment depending upon whether the basic salary drawn
by workmen other than operatives was more than
Rs. 100 or less. In case of operatives, there was a
uniform scale equal to the scale for workmen other
than operatives dra.wing less than Rs. 100 per mensem.
The clerical and non-clerical staff in Bombay raised
disputes and their main contention was that the scale
fixed by the scheme in force was lOw and should be
raised. As for the retirement. age, the clerical staff
claimed that it should be raised from 55 years to 60.
The case of the appellant-company before the tribu:
nal was that as the large majority of the staff both
clerical and non-clerical was in Calcutta and as the
gratuity scheme.and the retirement age were enforced
by virtue of an agreement arrived at between the
appellant-company and its workmen both clerical and
others in Calcutta 'Yho are a large majority of its total
workmen, they should not be changed at the instance
of a small minority of workmen both clerical and
others in Bombay. The tribunal did not accept this
·contention and raised the age of retirement from
55 years to 60. It also made changes in the gratuity
scheme by whioh the scale was raised and made
uniform both for clerical staff and others. Thereupon
the appellant applied for and obtained special leave
·from this Gourt; and that is how the matter has come
up before us.
Shri Palkhivala appearing for the appellant has
raised only two points before us, relating to the raising
of the retirement age and the change in the scale of
.gratuity, and we shall confine ourselves tc;> these two
points only. It is conceded by him that the Industrial
Tribunal has jurisdiction to order the changes which it
has ordered. But his contention is that though the
jurisdiction may be there, the tribunal should take
into account the special position of an all-India concern
and should not make changes particularly at the
I959
Dunlop
Rubber Co., Ltd,
v.
Workmen
and Others
Wanchoo ].
I959
Dunlop
Rubber Co., Ltd.
v.
Workmen
and Others
Wanchoo ].
54
SUPREME COURT REPORTS [1960 (2)]
instance of a small minority of workmen as that would
lead to industrial unrest elsewhere.
He further contends that the scale of gratuity and the age of retirement
are matters which are independent of local conditions
and therefore should be uniform throught India in
concerns which have an all-India character. He points
out that the conditions of service in the appellantcompany are uniform throughout India and were
arrived at by agreement with the unions of workmen
at Calcutta where the large majority of the workmen
are employed, and in these special circumstances, the
tribunal at Bombay should not have made any changes
in the retiring age or in the gratuity scheme at the
instance of the small minority of workmen in Bombay.
There is no doubt that in the case of an all-India
concern it would be advisable to have uniform conditions of service throughout India and if uniform
conditions prevail in any such concern they should not
be lightly changed. At the same time it cannot be
forgotten that industrial adjudication is based, in this
country at least, on what is known as industry-cumregion basis and cases may arise where it may be
necessary in following this principle to make changes
even where the conditions of service of an all-India
concern are uniform.
Besides, however desirable
uniformity may be in the case of all-India concerns,
the tribunal cannot abstain from seeing that fair conditions of service prevail in the industry with which
it is concerned. If therefore any scheme, which may
be uniformally in force throughout India in the case of
an all-India concern, appears to be unfair and not in
accord with the prevailing conditions in such matters,
it would be the duty of the tribunal to make changes in
the scheme to make it fair and bring itinto line with the
prevailing conditions in such matters, particularly in
the region in which the tribunal is functioning irrespective of the fact that the demand is made by only
a small minority of the workmen employed in one
place out ·of the many where the all-India concern
carries on business.
.
Before we come to consider the two questions
raised before us, we may as well point out that the
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'
(
,
-
-
-
-
S.C.R.
SUPREME COURT REPORTS
55
scale of gratuity and the retirement age were or1g1nally fixed by an agreement arrived at in 1956,
between the appellant company and its workmen in
Calcutta who form a large majority. That agreement
was for a period of two years ending with December, 31, 1957. Thereafter it was replaced by another
agreement also for two years beginning from 1st
January, 1958. In that agreement it was specifically
provided that no further major issues would be raised
excepting those relating to medical aid, retirement
age, and retirement benefits. It is clear therefore
that even the workmen in Calcutta had reserved the
right to raise a dispute with respect to retirement age
and gratuity, if necessary. The reason for this is
that the references out of which those appeals have
arisen were pending before the tribunal in Bombay
and the unions in Calcutta wished to await the
decision of the Bombay tribunal
before finally
agreeing to continue the rules relating to retirement
age and gratuity. The appellant-company also
agreed to make this reservation in the said agreement
arrived at between it and the unions in Calcutta.
Therefore, strictly speaking, it cannot be said in this
case that there was a ,final agreement in force with
respect to these two matters between the appellant
and large majority of its workmen in September, 1958
when the Bombay Tribunal gave its award. In any
case the Bombay Tribunal was bound to go into the
merits of the matter with respect to these two items,
namely, retirement age and gratuity, keeping in mind
the all-India character of the concern and the previous agreement of 1956, and this is what the tribunal
has actually done.
We shall first take the question of retirement age.
The tribunal found that retirement age was fixed
between 55 years and 60 in various concerns in
. Bombay. It was also of opinion that 55 years was too
low an age to be fixed for retirement for the clerical
staff and that the trend in all the awards had in
recent times been to fix it at 60 years. It, therefore,
ordered that so far as the clerical staff was concerned
retirement age should be 6-xed at 60 years inste(l.d
r959
Dunlop
Rubber Co., Ltd.
v.
Workmen
and Others
Wanchoo ].
I959
Dunlop
Rt1bber Co., Ltd.
v.
Workmen
and Others
U'anchoo ].
56
SUPREME COURT REPORTS [1960(2))
of 55.
We may in this connection refer to a recent
decision of this Court in Guest, Keen, Williams (Private)
Limited, Calcutta v. P. J. Sterling and Others (1), where
the age of superannuation of employees in service
before· the Standing Orders came into force, in that
concern was fixed at 60 years. In these circumstances if the tribunal thought that it would be fair to
fix 60 years as the age of retirement for clerical staff
in spite of the fact that in the agreement of 1956 the
retirement age wa.s fixed at 55 years, it cannot be
said that the tribunal's order was not in accord with
the prevailing conditions in many concerns in that
region. In these circumstances we are of opinion
that no interference is called for in this matter.
We now come to the question of gratuity.
The
gratuity scheme in force in the appellant-company on
the basis of the agreement of 1956, provided for threequarters of one month's average basic salary for each
completed year of continuous service for staff other
than operatives drawing up to Rs. 100 per mensem
and thereafter half a month's average basic salary for
each year. It also provided three weeks' average basic
wages for each completed year of continuous service
for operatives. Three years service was the ininimum
period for eligibility to gratuity under special circumstances like death, physical and mental incapacity
and 15 years service in all other cases. There was
also a provision for deducting some amount in lieu
of provident fund credited by the
company in
1941 in respect of service prior to 1st July, 1941.
The tribunal was of the opinion that the scheme
was not adequate and contained features which
were not usual in other prosperous concerns.
It
pointed out that the scale of gratuity for clerks was
on a lower basis than for operatives and that this was
against the general conditions of things prevailing in
that region. It further pointed out that the clerical
and the supervisory staff had a higher standard of
living, and had to meet heavier expenses of education
of their children who get employment at a late age as
compared to operatives. It was, therefore, of opinion
that a uniform scale of gratuity should be fixed for all
(I) [1960) (I) S.C.R. ns.
•
-
r
-
'
S.C.R.
SUPREME COURT REPORTS
57
including those getting wages above Rs.: 100 per
mensem. It also pointed out that the requirement
of a minimum service of three years in case of death
and physical and mental incapacity was another unusual feature of this scheme and held that it should be
changed. It was further of opinion that the usual
provision in such schemes was a scale of one month's
basic salary for each completed year of coritinuous .
service in case of death, physical and mental incapa-
. city and after 15 years' continuous service and that
some gratuity at a lower scale was provided usually
even in case of termination of service before the completion of 15 years' service. It therefore provided for
half a month's basic salary for each completed year
of continuous service after 5 years but upto ten years
and three-fourths of basic monthly salary for each
year of completed service after ten years but less than
fifteen years continuous service and one month's basic
salary for each year for the rest. :Finally, it took into
account the fact that there was a supplementary
gratuity scheme in force in the company with respect
to the employees in the employ of the company from
before September 1, 1946, and with respect to them it
provided that those employees should either opt for
the scheme as framed by it or continue in the gratuity
scheme of the company along with the supplementary
gratuity scheme.
It appears therefore from t.he
gratuity scheme finally sanctioned by the tribunal that
it removed those features from the scheme in force in
the appellant-company which were unusual and unfair
and not in consonance with, the prevailing conditions
for such schemes in that regiOn. In these circumstances
· we are. of opinion that the tribunal was not bound
merely because this is an all-India concern to refrain "
from altering the gratuity scheme which in ~ts opinion
had certain unusual features and was not in accord
with the prevailing conditions in that region.
The
appellant's contention therefore on this-head also fails.
The appeals are hereby dismissed with one set of
costs.
J9i9
Dunlop Rubber
Co., Ltd.
v.
Workmen and
Others
Wanchoo ].