# WORKMEN OF SHRI BAJRANG JUTE MILLS LTD v. EMPLOYERS OF SHRI BAJRANG JUTE MILLS LTD

- **Citation:** [1969] 2 S.C.R. 593
- **Court:** Supreme Court of India
- **Decided:** 1968-10-31
- **Case number:** Civil Appeal No. 923 of 1966
- **Bench:** J. M. Shelat, V. Bhargava, C. A. Vaidialingam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/workmen-of-shri-bajrang-jute-mills-ltd-v-employers-of-shri-bajrang-jute-mills-4571
- **Pages:** 20

## Headnote

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Wage Scale-Determination-Jndustry-cum-region basis-Wage Board
fixing uniform wage scale irrespective of differing conditions in different
region~Validity-Region}vise classrfication, necessity of.
The Central Wage Board was constituted for devising a wage structure,
based on the principle of fair wages payable
in the Jute industry.
In
determining the financial capacity of the industry the Board selected 20
mills from West Bengal and 9 mills from the rest of the region as representing a cross-section of the Industry. The
respondent, a
fairly
small mill in Andhra Pradesh, was considered as a comparable unit with
two larger mills in the State as also with some of the very big and prosperous mills in West Bengal. The Management of the mill refused
to
accede to the demand of the workmen to pay wages in accordance with
the recommendations of the Board fixing a uniform scale fur the entire
industry, on the plea tfrat the mill had no financial capacity to bear the
burden of the wage scale. The dispute was referred to the Industrial
Tribunal. The Tribunal upheld the claim of the management. In appeal
to this Court it was contended that the Wage Board rec<immendations
did follow the principles laid down by this Court in the matter of fixation
of wages and as such the Tribunal should have implemented its recommendations.
HELD : Dismissing the appeal.
The essential
pre-requisite of
deciding the
wage
structure viz.,
to consider the capacity of the industry to pay on the
principles laid
down by this Court was absent in the recommendation of the Wage Board.
This Court has laid down that the capacity of the industry to pay should
be gauged on an industry-<:um-region
basis after taking a
fair
crosssection of the industry and that the cross-section to be truly representative
and capable of giving a true picture of the conditions of both industry
and labour must be one from each region where establishments of the
industry in question are situate. [608 E-F]
In the present case taking 20 mills from West Bengal and 9 mills
from outside as forming a representative cross-section was manifestly in~
correct as the West Bengal mills could not be said to be, comparable units
with the rest of the mills. These mills so clubbed together could n.ot reflect the economic and other conditions prevailing in the mills in different
regions with their peculiar problems and differing conditions.
The Board
ought to have considered the units in each area separately and determined
the wage scales for each such area by taking from that area a representative cross-section of the industry where possible or where that was -not
possible by taking comparable units from other industries within that area.
f608 G-Hl
Express Newspapers Ltd. v. Union of India, [1959) S.C.R. 12, French
Motor Car Co. v. Workmen, [1963] Supp. 2 S.C.R. 16 and
Greaves
CoMon & Co. v. Workmen, [1964] 5 S.C.R. 362, followed.
594
SUPREME COURT REPORTS
[1969] 2 S.C.R.
If the wage-scale had been determined by the Board in the manner
A
aforesaid, even though the Board was not a statutory body
and its
decisions were only of a recommendatory character, it would be possible
for Industrial Tribunal to give due weight to its recommendations as
such recommendations would have been in conformity with the principle
of industry-cum-region, a principle binding on the tribunals. [609 HJ
[The difficulty felt by the Tribunal faced with the dilemma whether or
B
not to follow the recommendations of the Wage Board arrived at on
principles different from those consistently followed in industrial adjudication should have been realised by the Government before accepting
the recommendations of the Wage Board.] [609 F-G]

## Text

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....
593
A
WORKMEN OF SHRI BAJRANG JUTE MILLS LTD.
v.
EMPLOYERS OF SHRI BAJRANG JUTE MILLS LTD.
October 31, 1968
B
[J. M. SHELAT, V. BHARGAVA AND C. A. VAIDIALINGAM, JJ.]
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G
H
Wage Scale-Determination-Jndustry-cum-region basis-Wage Board
fixing uniform wage scale irrespective of differing conditions in different
region~Validity-Region}vise classrfication, necessity of.
The Central Wage Board was constituted for devising a wage structure,
based on the principle of fair wages payable
in the Jute industry.
In
determining the financial capacity of the industry the Board selected 20
mills from West Bengal and 9 mills from the rest of the region as representing a cross-section of the Industry. The
respondent, a
fairly
small mill in Andhra Pradesh, was considered as a comparable unit with
two larger mills in the State as also with some of the very big and prosperous mills in West Bengal. The Management of the mill refused
to
accede to the demand of the workmen to pay wages in accordance with
the recommendations of the Board fixing a uniform scale fur the entire
industry, on the plea tfrat the mill had no financial capacity to bear the
burden of the wage scale. The dispute was referred to the Industrial
Tribunal. The Tribunal upheld the claim of the management. In appeal
to this Court it was contended that the Wage Board rec<immendations
did follow the principles laid down by this Court in the matter of fixation
of wages and as such the Tribunal should have implemented its recommendations.
HELD : Dismissing the appeal.
The essential
pre-requisite of
deciding the
wage
structure viz.,
to consider the capacity of the industry to pay on the
principles laid
down by this Court was absent in the recommendation of the Wage Board.
This Court has laid down that the capacity of the industry to pay should
be gauged on an industry-<:um-region
basis after taking a
fair
crosssection of the industry and that the cross-section to be truly representative
and capable of giving a true picture of the conditions of both industry
and labour must be one from each region where establishments of the
industry in question are situate. [608 E-F]
In the present case taking 20 mills from West Bengal and 9 mills
from outside as forming a representative cross-section was manifestly in~
correct as the West Bengal mills could not be said to be, comparable units
with the rest of the mills. These mills so clubbed together could n.ot reflect the economic and other conditions prevailing in the mills in different
regions with their peculiar problems and differing conditions.
The Board
ought to have considered the units in each area separately and determined
the wage scales for each such area by taking from that area a representative cross-section of the industry where possible or where that was -not
possible by taking comparable units from other industries within that area.
f608 G-Hl
Express Newspapers Ltd. v. Union of India, [1959) S.C.R. 12, French
Motor Car Co. v. Workmen, [1963] Supp. 2 S.C.R. 16 and
Greaves
CoMon & Co. v. Workmen, [1964] 5 S.C.R. 362, followed.
594
SUPREME COURT REPORTS
[1969] 2 S.C.R.
If the wage-scale had been determined by the Board in the manner
A
aforesaid, even though the Board was not a statutory body
and its
decisions were only of a recommendatory character, it would be possible
for Industrial Tribunal to give due weight to its recommendations as
such recommendations would have been in conformity with the principle
of industry-cum-region, a principle binding on the tribunals. [609 HJ
[The difficulty felt by the Tribunal faced with the dilemma whether or
B
not to follow the recommendations of the Wage Board arrived at on
principles different from those consistently followed in industrial adjudication should have been realised by the Government before accepting
the recommendations of the Wage Board.] [609 F-G]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 923 of
1966.
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Appeal by special leave from the Award dated May 29, 1965
of the Industrial Tribunal, Andhra Pradesh in I.D. No. 12 of
1964.
M. K. Ramamurthi, Shyama/a Pappu and Vineet Kumar, for
the appellants.
K. Srinivasamurthy, Naunit Lal and B. P. Singh, for the respondents.
The Judgment of the Court was delivered by
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Vaidialingam, J. The workmen of Shri Bajrang Jute Mills
Lid., in this appeal by special leave, attack the correctness of the
award dated May 29, 1965 of the Industrial Tribunal, Andhra
E
Pradesh, Hyderabad, in I.D. No. 12 of 1964, by which it held
that the demand of the workmen for implementation of the recommendations of the Central Wage Board for
Jute Industry
(hereinafter referred to as the Wage Board), was not justified.
In view of the fact that the respondent-management declined
to accede to the demand of the appellants to pay wages in accordance with the recommendations of the Wage Board, the State
of Andhra Pradesh, by its order dated March 21, 1964, referred
for adjudication to the Industrial Tribunal, Hyderabad,
the
following question :
"Whether the demand of the workmen in Sri Bajrang Jute Mills, Limited, Guntur, for implementation
of the recommendations of the Central Wage Board for
Jute Industry is justified, and if so, to what extent?"
The Wage Board was constituted by the Central Government for
determining, among other matters, a wage structure, based on
the principles of fair wages payable in the jute industry. The
Wage Board consisted of a Chairman, two independent Members, two Members representing the employers and two Members
representing the workers. It may be noted that the Members
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WORKMEN v. BAJRANG JUTE MILLS (Vaidialingam, J.) 595
representing the industry and labour were not chosen by the representative bodies of the industry or the labour but were appointed by Government. In fact, neither the industry nor the labour
had any voice in the choice by the Government of any of the
members of the Wage Board. The Wage Board submitted its
report to the Government, making recommendations
about the
wage structure and laying down principles for awarding bonus
for the year 1962-63 and the subsequent years.
It appears from the Wage Board's report that, at the very
outset, the Wage Board selected 20 mills from West Bengal and
9 reporting mills from outside West Bengal which it considered
to form a representative cross-section of the industry for a detailed study. The Wage Board took into account the financial position of the said mills and also collected other data and information not only from the mills concerned but also from other quarters. The Wage Board took into account the growth of paid-up
capital, gross block depreciation, profits made and dividends paid
by the mills and other allied matters and came to the conclusion
that the industry's position was satisfactory and its future was
bright. The Wage Board was not required to fix a wage structure on the peculiar financial position of any particular unit, although it was bound to take a fair cross-section of the industry
represented by units reflecting the general conditions prevailing
in the industry as a whole. The Wage Board also considered the
principles for determination of bonus and recommended payment
of bonus for the year 1963 on the basis of the basic wages dravm
by the worker for the year 1962. It also recommended that for
future years the bonus was to be paid according to the wages
drawn in the preceding year. It further recommended certain
rule& for determination of the quantum of bonus. According to
the appellants, the respondent was bound to implement the recommendations of the Wage Board in all respects and its refusal
to do so was illegal and unjustified.
The respondent pleaded that the recommendations of the
Wage Board could not be implemented as the Mill had no financial capacity to bear the burden of the wage scales recommended
by the Wage Board. The respondent made an attempt to implement the Wage Board's recommendations to some extent at least
provided the labour agreed for revision of work loads, but
th~
labour was not willing for such revision.
It was further stated
that .the respondent company, though started in 1907, had been
runnmg at a loss for a number of years and its loom-strength was
only 120. The mill was located at Guntur, which is not a jutegrowing area, and in consequence almost all raw materials had
to be brought from Vijayanagaram, in Visakhapatnam District,
and from Calcutta. As the raw materials and other products had
to be brought from outside, it involved the mill in considerable
596
SUPREME COURT REPORTS
[1969] 2 S.C.R.
expense due to freight charges etc.
The products manufactured
in the mill were only cement bags and twine and cement companies were its only customers. The company had furnished
replies to the questionnaire issued by the Wage Board and had
made it clear that the wages paid by it were reasonable and it
could not bear any additional burden in that regard. Even the
interim relief, recommended by the Wage Board, was implemented with considerable difficulty though it involved the company
in an additional revenue expenditure of Rs. 1,53,000 a year.
The Wage Board's recommendations fixed the wage
seal.es,
dearness allowance etc., for all the employees working in all the
jute mills situated in the country, irrespective of the financial
position of individual mills. If the recommendations of the Wage
Board were to be implemented, the company would be put to
further expenditure of Rs. 2,75,385.60 in the first year, Rs. 3.25
lakhs in the second year and Rs. 3.75 lakhs in the third year in
addition to the existing wage bill which the company had to meet.
The company has been making only negligible profits and it could
not pay any dividend on jts equity shares for nearly 7 years. Its
reserves also have been dwindling. The financial position of the
<:ompany, therefore, is such that it is impossible for it to bear the
burden of the additional wage structure, dearness allowance etc.,
as recommended by the Wage Board. The company further
pleaded that the Wage Board committed a serious mistake when
it compared the financial position of the respondent along with
two other large mills in the Andhra area viz., Nellimarla and
Chitavalasa Jute Mills.
Further the wage scales fixed by the
Wage Board are on the basis of the position occupied by big jute
mills in West Bengal, having upto 2,561
looms and 13,580
spindles. The Wage Board did not atteJTipt to make any distinction between small and uneconomic mills and large mills, nor
was any classification made in that manner.
Regarding payment of bonus, the company pleaded that this
was covered by a settlement and the workmen were not entitled
to the same in view of the financial position. of the company and
as there was no available surplus. The wage structure, dearness
allowances etc., fixed by the Wage Board were not in accordance
with the principles laid down by this Court in several decisions.
According to the decisions of this Court, no fair wage can be
fixed unless the unit in question has the financial capacity to meet
the additional burden; and, in fixing the wage scale and dearness
allowance, the principle of industry-cum-region had to be applied.
Small and struggling units should not be compared with large,
flourishing concerns. The extent of business carried on by them;
the labour force, the capital invested, quantum of reserves, dividends declared and profits made, have all to be taken into account
to see whether the units could be compared for wage fixation.
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WORKMEN v. BAJRANG JUTE MILLS (Vaidialingam, J.) 597
All these circumstances have not been given due weight and consideration by the Wage Board. The respondent mill bas only
120 looms and it has been compared with not only the very big
mills in West Bengal but also with the Nellimarla and Chittavalasa Jute Mills which have 500 and 316 looms respectively. No
classification was made by the Wage Board of the various jute
mills as large, medium and small units; and in prescribing uniform
scales for all types of units no distinction has been made between
economic and uneconomic units. Small and sirugg!ing units
have been treated in the same way as large and prosperous units .
Finally, the respondents pleaded that in view of the circumstances
indicated above, the Wage Board's recommendations could not
be implemented. by it and the labour's claims, on the basis of the
Wage Board's recommendations, were not justified.
The Industrial Tribunal, in its award under attack, accepted
the pleas taken by the management. While recognising the fact
that the Wage Board's recommendations were made, after collecting considerable data, the Tribunal was of the view that the
Wage Board committed an error in comparing the respondent
mill with other big mills, not only in Andhra Pradesh but also
outside that State. The Tribunal was also of the view that the
principles laid down by this Court that the fixation of wage scaks
should be on an industry-cum-region basis and that small units
should not be compared with large and flourishing concerns, were
not given due regard by the Wage Board. On the materials
placed before it, the Tribunal accepted the claim of the respondent
that it was a small concern considered from any point of view,
viz., of looms, paid up capital, reserves, or the profits. In respect of the capacity to pay, the Tribunal was of the view that the
Wage Board had not approached the question in the light of the
principles laid down by this Court. The Tribunal came to the
conclusion that the respondent, which is a fairly small unit, has
not the financial capacity to adopt the wage-structure fixed by
the Wage Board. The Tribunal accepted the claim of the respondent regarding the additional financial burden it would have
to bear, even according to the phased programme fixed by the
Wage Board and has held that the financial position of the company is such that it cannot bear this burden. The Tribunal also
came to the conclusion that as the Wage Board was devising a
fair-wage, the capacity of the particular industry to bear the additional burden-which is one of the essential circumstances to be
taken into consideration-has not been taken into account.
On
the other hand, all jute mills, wherever situate, big or small, prosperous or struggling, economic or uneconomic, have all been
treated alike and a uniform wage structure applicable to all mills
has been fixed. There has been no attempt at classification of
small .and une~onomic mill~ for the purpose of finding out their
financial capacity. The Tnbunal finally came to the conclusion
598
SUPREME COURT REPORTS
(1969] 2 S.C.R.
that the de1:11and of the workmen for implementation of the recommendations of the Wage Board was not justified.
The same stand, taken before the Tribunal by the management
and the workmen, as mentioned earlier, have been reiterated before us by Mr. M. K. Ramamurthy, learned counsel for the
Union, attacking the award and Mr. K. Srinivasamurthy, learned
counsel for the management, in support of the award. Before we
refer to the circumstances under. which the Wage Board was
constituted, as well as the approach made by it in the fixation of
wage-scales and other matters, it is necessary to refer to the principles laid down by this Court in that regard and to examine
whether the Wage Board has properly applied those principles.
Mr. Ramamurthy, learned counsel for the appellant, has accepted
the position that there is an obligation on the Wage Board to
follow correctly and apply the principles laid down by this Court
in the matter of fixation of wages and dearness allowance. But
his contention is that the Wage Board has, in its recommendations, followed those principles.
In Express Newspapers
(Private)
Ltd. v. The Union of
India(') this Court has elaborately considered the concept of
(i) living wage; (ii) fair wage; and (iii) minimum wage, as well
as the machinery for fixation of wages, adopted in various. countries.
So it is not necessary to cover the ground over agam.
So
far as fair wage is concerned, this Court has stated that while the
lower limit must obviously be the minimum wage, the upper limit
is equally said to be what may broadly be called the 'capacity of
the industry to pay'. It has further been stated that the capacity
of the industry to pay should be gauged on an industry-cumregion basis, after taking a fair cross-section of that industry and
that in a given case it may be even permissible to divide the industry into appropriate classes and then deal with the capacity of
the industry to pay class-wise. This Court further laid down the
principles in that regard as follows, at p. 92 :
"The principles which emerge from the above discussion are :
( 1 ) that in the fixation of rates of wages which
include within its compass the fixation of scales
of
wages also, the capacity of the industry to pay is one of
the essential circumstances to be taken into consideration except in cases of bare subsistence or minimum
wage where the employer is bound to pay the same irrespective of such capacity;
( 2) that the capacity of the industry to pay is to
be considered on an industry-cum-region basis after
taking a fair cross section of the industry; and
(J) [1959] S.C.R. 12.
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WORKMEN v. BAJRANG JUTE MILLS ( Vaidialingam, J.) 599
( 3) that the proper measure for gauging the capacity of the industry to pay should take into ac~o?i;it the
elasticity of demand for the product, the poss1b1lity of
tightening up the organisation so
that the industry
could pay higher wages without difficulty and the possibility of increase in the efficiency of the lowest paid
workers resulting in increase in production considered
in conjunction with the elasticity of demand for
the
product-no doubt against the
ultimate background
that the burden of the increased rate should not be such
as to drive the employer out of business."
The discussion on the question of capacity of an industry to pay
is wound-up at p. 191 with the following observations :
"Industrial adjudication is familiar with the method
which is usually adopted to determine the capacity of
the employer to pay the burden sought to be imposed on
him. If the industry is divided into different classes, it
may not be necessary to consider the capacity of each
individual unit to pay but it would certainly be necessary to consider the capacity of the respective classes
to
bear the burden imposed on them.
A crosssection of these respective classes may have to be taken
for careful examination and all relevant factors may have
to be borne in mind in deciding what burden the class
considered as a whole can bear. If possible, an attempt
can also be made, and is often made, to project the burden of the wage structure into two or three succeeding
years and determine how it affects the financial position
of the employer."
In French Motor Car Co. Ltd. v.
Workmen(') this Court observed at p. 20 :
"It is now well settled that the principle of industrycum-reg.ion has to be applied by an industrial court,
when
1t
proceeds to consider questions
like wage
structure, dearness allowance and similar conditions of
service.
In applying that principle industrial courts
have to compare wage scales prevailing in similar concerns .in th~ r~gion with which it is dealing, and generally
speakmg similar concerns would be those in the same
line of business as the concern with respect to which the
dispute is under consideration.
Further, even in
the
same line of business, it would not be proper to compare (for example) a small struggling concern with a
large flourishing concern."
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SUPREME COURT REPORTS
(1969) 2 S.C.R.
The principle that the basis of fixation of wages and dearness
allowance is industry-cum-region was reiterated in Greaves Cotton
& Co. v. Their Workmen(').
According to Mr. Ramamu.rthy, the learned counsel for the
appellant, the principles )aid down by the decisions, referred to
above have been borne in mind by the Wage Board when it fix.ed
the wage structure and dearness allowance.
Learned
counsel
also urged tbat when a wage structure was fixed for the industry
as such, it is not necessary that the capacity of individual units
should also be considered and that on the other hand it would be
enough if a fair cross-section of the industry was taken into
account for this purpose as was done by the Wage Board in the
present case.
On the other hand, according to Mr.
Srinivasamurthy, the
learned counsel for the management, inasmuch as a fair
wage
was being fixed, the Wage Board was bound to apply the principle of industry-cum-region in fixing the wage structure and dearness allowance and the Wage Board has committed an error in
not classifying the various units as large, medium and small units
and prescribing different scales for different types of units.
We shall now proceed to consider the
circumstances
under
which the Wage Board was constituted, its composition and the
approach made by it in fixing the wage structure and dearness
allowance.
In Chapter XXVII, paragraph 25, of the Second Five Year
Plan of the Government of India, it is stated that statistics of industrial disputes show that wages and allied matters are the major
source of friction between employers and workers and that an
acceptable machinery for settling wage disputes will be one whkh
gives the parties themselves a more responsible role in reaching
decisions. It is· further stated that an authority like a tripartite
wage board, consisting of equal representatives of employers and
workers and an independent chairman would probably ensure
more acceptable decisions and that such wage boards should be
constituted for individual industries in different areas. In pursuance of this recommendation, the Government of India, by its
Resolution No. WB-5(1)/60, dated August 25, 1960, set up a
Central Wage Board for Jute Industry. The Board consisted of
a Chairman, two independent Members and two Members representing employers and two Members representing employees. The
terms of reference of the Board were :
"(a) to determine the
categories
of employees
(manual, clerical, supervisory, etc)
who should be
(8) [1964] 5 S.C.R. 362.
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WORKMEN v. BAJRANG JUTE MILLS (Vaidialingam, J.) 601
brought within the scope of the proposed wage fixation;
(b) to work out a wage structure based on the principles of fair wages as set forth in the report of the Committee on Fair Wages."
In evolving a wage structure, the Board was also required to take
into account the needs of the industry in a developing economy,
the special features of the jute industry as an export industry, the
requirements of social justice and the need for adjusting wage
differentials in such a manner as to provide incentives to workers
for advancing their skill. The Wage Board was also
require~,
within two months from the date of its starting work, to submit
its recommendations regarding the demands of labour in respect
of interim relief, pending its final report.
The Wage Board recommended to the Central Government
the grant of interim reli.ef of Rs. 2.85 from October 1 to December 31, 1960 and Rs. 3.42 from January 1, 1961 in respect of all
jute mills in India, excepting the Katihai Jnte Mill in respect of
which the interim relief at the rate of Rs. 3.42 was granted from
September 1, 1961.
The Central Government accepted this recommendation, by its Resolution No. WB-5(3)/61, dated January 25, 1961 and requested the jute mills to implement the same
as soon as possible. There is no controversy that the respondent
mill complied with this request though it involved the company
in an additional expenditure of Rs. 1,53,000. This claim of the
company has been accepted by the Industrial Tribunal. The Wage
Board submitted to the Central Government, on September 4,
1963 its final recommendations dated August 31, 1963 and recommended that the new wage structure should be given effect to
from Jnly 1, 1963. The Central Government, by its Resolution
No. WB-5 ( 16) I 63 dated September 27, 1963 accepted the report
and made a request to the employers, the workers and the State
Governments to implement the same expeditiously.
The standardised basic wages of various categories of workers of jute mills
for a month of 26 days or 208 hours are specified in Appendix
XI of the Report; and there is no controversy that the basic wages
of all categories of workers in the employ of the respondent jute
mill is the same as the standardised basic wage contained in
Appendix XI. But. there is a further recommendation that so far
as the appellant jute mill and another jute mill, viz .. Sri Krishna
Jnte Mill, were concerned, the wage increase was to be on a
phased basis.
We may refer now to the various aspects dealt with by the
Wage Board in its report. Chapter III deals generally with the
Industry. In para 3.5 it is stated that there is an overwhelming
concentration of jute industry in West Bengal and only a sprink-
602
SUPREME COURT REPORTS
[1969] 2 S.C.R.
ling of it is to be found elsewhere in India. It is also noted that
A
the loomage at the time of the report in the whole of India stood
at 72,916 looms. The reasons for the heavy concentration in
West Bengal of jute mills are stated to be factors like abundant
supply of raw material, proximity of coal fields in Ranigunge,
navigability of the Hooghly and the availability of the required
type of labour in the neighbourhood. So far as jute mills at other
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places in India are concerned, in para 3.6 of the Report it is
stated that small jute mills have come up in other States, including
Andhra Pradesh, but the total loomage of all such mills outside
West Bengal is only 3,242 looms, and the mills are distributed in
various places.
Appendix VII of the Report contains a statement showing the
mills operating, number of looms and spindles in the whole of
India.
So far as West Bengal is concerned, the total number of
looms is given as 65,383; in Andhra Pradesh as 1,072; in Bibar
1,059; Uttar Pradesh 891 and Madhya Pradesh 220. It will be
noted from Appendix VII that in Andhra Pradesh there are two
fairly big units, the Nellimarla and Chitavalsa having 316 and
500 looms respectively, whereas the respondent mill has only 120
looms. We are particularly referring to this aspect because it is
the grievance of the respondent that the Wage Board has compared it with the Nellimarla and Chitavalsa and other big unil5 in
West Bengal.
A perusal of Appendix VII shows that there are
several jute mills having more than 1,000 looms and some having
more than 2,000 looms, in West Bengal.
Chapter IV deals with the scope of enquiry. In para 4.1 it is
stated that the Board's recommendations will apply to all the jute
mills then existing and also to those that might be started thereafter, and a list of all mills then in existence is given in Appendix
VII.
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Chapter V deals with minimum wages in the jute industry. In
para 5.4 the Wage Board takes note of the fact that the minimum.
wages in Nellimarla and Chitavalsa jute mills in Andhra Pradesh
are found to be the highest in the jute industry. In para 5.26, the
G
minimum wages in West Bengal jute mills from 1948 and as ?~
taining from January 1, 1961 has been referred to.
Such m1mmum wages from January 1, 1961 including Rs. 3.42 granted ~s
interim relief by the Wage Board and the dearness allowance, 1s
stated to be Rs. 70.59, comprised of basic wages of Rs. 34.67+
Rs. 3.42 (interim relief)+Rs. 32.50 (dearness allowance). ReH
oarding the jute mills in Andhra Pradesh, it is stated in para 5.35
that Nellimarla and Chitavalsa jute mills were paying from January 1, 1961 the total emoluments of Rs. 81.21 per month to tbe
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WORKMEN v. BAJRANG JUTE MILLS (Vaidialingam, J.) 603
lowest category of workers for 208 working hours, inclusive of
Rs. 3.42 interim relief granted by the Wage Board .
In para 5.38, it is stated that the respondent mill, from January 1, 1961, is paying total emoluments of Rs. ?2.l? per ~onth,
comprised of Rs. 19.50 (basic)+Rs. 3.42
(mtenm relief)+
Rs. 29 .25 (dearness allowance) . The jute mills in Bihar State,
as will be seen from para 5.43 were paying total monthly emoluments_ ranging from Rs. 69.98 to Rs. 70.59.
Chapter VI deals with the industry'~ capac\ty to pay:
In
para 6.1 it is stated that two matters which received the highest
consideration in the course of the deliberations of the Wage
Board were the needs of the workers and the capacity of the industry to pay those needs.
It is further stated that the consequences of a fair wage upon the employer or the capacity of the
industry to maintain production efficiently, have received
t~e
special attention of the Wage Board. In para 6.8, reference 1s
made to the Fair-Wages Committee's Report that in detennining
the capacity of the industry to
pay,
it
is
wrong
to
take the capacity of a particular unit or the capacity of the entire
industry in the country and that the practical method is to take a
fair cross-section of the jute industry. In this connection the Wage
Board refers to the claims advanced by the workers and the industry. The workers appear to have suggested the names of mills
which were well-established and whose financial position was
never in doubt, whereas the industry urged that the capacity of
the weaker and marginal units should not be ignored as the wages
that are to be fixed by the Wage Board should be such as could
be paid without difficulty by all units of the industry .
In para 6.9 it is stated that the Wage Board was of the view
that the only proper and practical methods was to take a crosssection of the industry which could be considered as fair in its
view. Accordingly, twenty jute mills in West Bengal were selected by it as representing a fair cross-section of the industry in that
region. The Wage Board also decided to make a census survey
?f 9 reporting mills outside the West Bengal region. Accordingly
It selected all the three in Andhra Pradesh, two in Bihar three in
U~tar :i'radesh and one in Mad~ya Pradesh. A list of
0the jute
mills m West Bengal and outside West Bengal region considered
as forming a representative cross-section of the jute mills is given
in Annexure A to the Report.
So far as Andhra Pradesh is' concerned, all the three mills situate in the State have been taken into account, being Nellimarla, Chitavalsa and thP. respondent. The
Wage Board then considers the capital formation bonus issue
total paid up capital, reserves and surplus, percent~ge of dividend
declared, profits made; but, under .each of these heads, the Wage
Board grouped together all the m11ls in West Bengal
Andhra
Pradesh, Bihar, Uttar Pradesh and Madhya Pradesh. '
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604
SUPREME COURT REPORTS
(1969] 2.S.C.R.
In para 6.44, the Wage Board hpresses the view that it would
A
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be possible for the industry to bear the extra burden arising from
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the new wage structure recommended by it without much difficulty
and without affecting the economy of the industry adversely.
In Chapter VII the Wage Board considers the principles by
which the Tribunal and other wage-fixing authorities were guid!ld, B
in fixation of wages in West Bengal and outside that State. In
para 7 .19 the Wage Board proceeds to state that it has to devise
a fair wage structure. It refers to the report of the Committee
on Fair Wages that with regard to a fair wage, the lower limit
must obviously be the minimum wage and the upper limit is
equally set by what may broadly be called the capacity of the
industry to pay.
In para 7.25 the Wage Board refers to the claim
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of the workers that the minimum wages at Calcutta, at prices prevailing in 1960 should be Rs. 125 and that the minimum wage at
Kanpur, in Uttar Pradesh, should be Rs. 140 per month; while,
on the other hand, the Indian Jute Mills Association appears to
have pressed that the then existing wages in the jute industry for
all categories of workers were fair.
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In para 7 .34 the Wage Board refers to the fact that the wages.
in the jute industry had not kept pace with wages in cotton textile and engineering industries in West Bengal, as would be seen
from the fact that in 1959, while in the jute industry the minimum
wages had gone up by 46% over the 1946 wages, it had gone up
in cotton textile and engineering industries by 69.71 %
and
77 .50% respectively.
It further notes the fact that the minimum
wages in cotton textile mills in West Bengal on April 1, 1963
were Rs. 83.50 and in the engineering industry Rs. 82 per month.
On. the other hand, the wages in the jute industry on April l,
1963 were Rs. 70.59. On this reasoning the Wage Board comes
to the conclusion in para 7 .35 that there was a prima facie case
for increase in the wages of the jute workers.
The Wage Board
expresses the opinion that the concept of the paying capacity of
the jute industry is not the same as it is generally understood in
the case of other industries, in view of the fact that the jute in- •
dustry is principally an export-oriented industry, depending upon ,
the fluctuating foreign markets.
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In para 7 .40 the Wage Board states that in fixing the wage
structure for the jute industry it has taken into consideration the
prevailing wage structure in the cotton textile industry and the
engineering industry in West Bengal.
It has noted that in West
Bengal, as on April 1, 1963, the minimum wage in the cotton
textile industry was Rs. 84.10 per month and in engineering inH
dustry Rs. 82 per month. As in the opinion of the Wage Board
there is a great similarity in the nature and condition of work
between cotton textile industry and jute industry, in para 7 .43 it
. .
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WORKMEN v. BAJRANG JUTE MILLS (Vaidialingam, I.)
605
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uec1Jes 10 devise a wage structure in the jute industry keeping in
>
view the pa1tern of wages existing in the cotton textile indust1y in
West Bengal.
Regarding dearness allowance, the Wage Board in para 7.44
decides to introduce a system of
variable dearness allowance
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linked with the consumer price index.
In para 7.45 the Wage Board refers to the special representa-
.. ~~;
tions made by the jute mills outside West Bengal that in comparison with the mills in West Bengal they have to pay higher
freight charges on coal, batching oil and that mill
stores
and
electricity charges are higher for them, that their productivity is
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low and that most of them have no export trade. The Wage
Board states that it has considered these problems and though
there are these locational difficulties for individual jute mills, it
has decided that the wage level in the jute industry should as far
as possible be uniform throughout the country. The Wage Board
further states that the wages in some of these jute mills were very
"-
low and in order to obviate their financial difficulties in conseD
quence of the raising of wage level, it has decided that the wage
level in these mills should be raised in a phased manner.
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Having decided that the wage level ~n the Jute Industry should
be uniform throughout the country, the Wage Board, in para 7.52
decides that the total minimum wage in West Bengal should be
fixed at Rs. 81 per month, consisting of (i) basic wage; (ii) Wage
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Board increment; and (iii) variable dearness
allowance. The
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Wage Board further, in para 7.56, states that in addition to basic
wages, all categories of workers should be paid an increase of
..
Rs. 8.33 per month inclusive of interim relief of Rs. 3.42 already
granted by it and accepted by the Central Government.
This
increment of Rs. 8.33 per month is desired to be shown as a sepaF
rate item under. the heading 'Wage Board increment' in the case
of all categories of workers and that increment should be treated
as part of the basic wages for all purposes like bonus, provident
fund, etc.
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In para 7.57 the Wage Board states that the dearness allow-
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ance of Rs. 32.50 that was being paid then should be considered
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. as. th~ dearness allowance fixed at the working class
consumer
pnce mde.x number of 425, for Calcutta with base year J 939 as
I 00 .. It is further stated that the dearness allowance should be
~ ;gna;le one a_nd t~e rate of .increase or decrease should be at
.
n . per pomt nse or fall m the average working class consume~ pnce ~ndex number for Calcutta.
The dearness allo
ff
ance is also duected to be revised every six months . th
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of February and August of each year.
in
e mont s
B <;1 fi the basis of these calculations in para 7 58 the W
4 ~~~- c !~~~ ~e total monthly minimu~ wage payable at Rs. a§~
606
SUPREME COURT REPORTS
[1969] 2 S.C.R.
comprised of (a) Rs. 40.17 basic wage; (b) Rs .. 8.33
Wage
Bo11rd increment; and ( c) Rs. 32.50 being variable dearness
allowance.
In para 7.59, the Wage Board states that the stand·
ardised basic wages of ¥arious categories of workers of a jute
mill for a month of 26 days or 208 hours are enumerated in
Appendix XI to the Report.
When considering the wage structure for jute mills
outside
West Bengal, in para 7.65(a) the Wage Board states that the
.basic wages of all categories of workers in the jute mills men·
tioned by it, outside West Bengal, which includes the respondent
mill, shoμld be the same as those in jute mills in West Bengal
mentioned in Appendix XI. Therefore, it is clear that the mini·
mμm basic wage fixed for the mills in West Bengal has been
applied to all the mills outside West Bengal, including the res·
pondent.
But, so far as the respondent mill is concerned, the
Wage Board, in the same paragraph, gives a direction that the
.~tanda.rdised basic wages mentioned in Appendix XI of the Report is to be adopted in a phased manner as follows :
During the first 24 months from the
date on~ which the recommendaw
tions of the Board will be effecw
tive
.During the next 12 month~
. puring the next 12 months
Thereafter
Basic wages of all_ categories of workers
should be 20 per cent less than the stand ..
ardised wages shown in Appendix XI
Basic wagd of all categories of workers
should be IO per cent less than the stand.
ardised wages shown in Appendix XI
Basic wages of alt categories of workers
should be 5 per sent less than the stanw
dardised wages shown in Appendix XI
Basic wages of all categories of workers
should be the same as standardised
wages shown in Appendix XI
In paragraph 7. 66 the Wage Board directs that all categories
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of workers in jute mills situated outside West Bengal should also
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be paid the Wage Board increment of Rs. 8.33 per month, inclusive of interim relief of Rs. 3.42 already granted.
In para 7.67(c) it is stated that the rates of dearness allowance of all categories of workers in the respondent mill and in
Sri Krishna Mill is fixed at Rs. 32.50 at the average working
class consumer price index number of 560 for Eluru for the last. G
six months in 1962 with base year 1935-36 as 100. It is further
stated that the dearness allowance should be a variable dearness
allowance and the rate of increase or decrease should be 0.20 nP
per point of rise or fall in the average working class consumer
price index number for Eluru and that it should be revised every
six months in the months of February and August.
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Chapter VIII deals with bonus m jute industry and in para
8 .18 the' Wage Board makes a recommeq:idation that in the j1.1te
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WORKMEN v.