judgement:
DICTION: Civil Appeals Nos.
51 72 of 1981.
Appeals by Special Leave from the Judgment and Order dated the 22nd September.
1980 of the High Court of Himachal Pradesh at Simla in R.F.A. Nos. 262, 249, 251, 252, 261, 265, 266, 267, 280, 281, 292, 297, 299, 300, 307, 308, 352, 355, 356, 366, 370 and 220 of 1980 respectively.
M.M. Abdul Khader and Ms. A Subhashini with him for the Appellants.
K.R. Nagargia, Mr. Naresh Kaushik and Krishna Prasad for the Respondents.
J. What should be the true multiplier to be adopted in determining the compensation payable in respect of land acquired in or about the year 1962 63 where the market value of the land is to be fixed on the basis of the capitalisation principle, is the question which arises for consideration in these appeals.
The construction of the Beas Project was commenced in the year 1960 as a joint venture of the erstwhile State of Punjab and the State of Rajasthan by mutual agreement between the two States.
All decisions on the policy and administrative matters were taken by a Board known as the Beas Control Board which was set up by the Central Government in consultation with the two States on February 19, 1961.
The Beas Project Board was presided over by the Governor of the then State of Punjab and its members included Ministers of the States of Punjab and Rajasthan and senior officers of the Central Government and of the two States.
The decisions of the Beas Control Board used to be implemented by the Punjab Government which was administering and executing the works on the Project.
The expenditure on the Project was shared by the Rajasthan Government.
With the coming into force of the (Act 31 of 1966), the new State of Haryana and the Union Territory of Chandigarh came into being, having been formed out of the territory of the erstwhile State of Punjab.
A part of the Punjab 220 territory was also transferred to what was then the Union of Territory of Himachal Pradesh.
What remained with Punjab became the new State of Punjab.
Sub section (1) of section 80 of the provided that the construction including the completion of any work already commenced of the Beas Project should on and from November 1,1966 be undertaken by the Central Government on behalf of the successor States (as defined under that Act) and the State of Rajasthan should provide the necessary funds to the Central Government for the expenditure on the Project including the expenses of the Beas Construction Board.
For the discharge of its functions, sub section (1) and sub section (2) of section 80 of the Punjab Reorganistation Act empowered the Central Government in consultation with the Governments of the successor States and the State of Rajasthan to constitute a Board to be called the Beas Construction Board, Thus by the , the entire expenditure for the construction and completion of the Beas Project was to be shared by the successor States and the State of Rajasthan but the responsibility of construction and completion of the Beas Project was entrusted to the Central Government.
About 70,000 acres of land had to be acquired for the Beas Dam Project which was located in the Kangra area of the erstwhile State of Punjab which stood transferred to the then Union Territory of Himachal Pradesh under the .
The necessary notifications under section 4 (1) of the Land Acquisition Act, 1894 had been issued by the appropriate Government for that purpose.
We are concerned in these cases with lands which were notified for acquisition in the years 1962 and 1963 under section 4 (1) of the Land Acquisition Act.
The acquisition proceedings in respect of the lands which stood transferred to the Union Territory of the State of Himachal Pradesh, as mentioned above, were to be completed by its officers.
The land in question are situated in Tikka Bhararian, Mauza Dhameta, Tehril Dehra, District Kangra.
Himachal Pradesh.
The Land Acquisition Officer issued notices under section 9 (3) of the Land Acquisition Act to the interested persons inviting their representations and objections with regard to the determination and payment of the compensation.
After receiving the representations and objections, the Land Acquisition Officer (Shri Didar Singh) passed a common award on January 31, 1972 in respect of an extent of 1125.33 acres of land in Tikka Bhararian 221 which had been notified on April 1,1963.
It would appear that another Land Acquisition Officer, Shri Jaswant Singh, had passed an award earlier on April 2,1969 in respect of certain lands situated in Tikka Bihari which has been acquired for the very same public purpose.
The Land Acquisition Officer who had to pass the award in these cases being of the opinion that the fertility, productivity and potentiality of land in Tikka Bhararian (the lands in question) were more or less comparable with those of the lands situated in Tikka Bihari and that the classification and valuation of lands in the award passed by Shri Jaswant Singh were quite fair, adopted the same for the purpose of passing the award in respect of the lands in question.
It may be mentioned here that Shri Jaswant Singh had adopted for the purpose of valuation of lands the principle of capitalisation.
He was of the view that the rule of 20 years purchase was to be adopted.
He accordingly after determining the net annual profit per kanal of land of the best category at Rs. 50 and multiplying it by 20 arrived at Rs. 1,000 as the value of one kanal of the best variety of land.
In order to determine the net annual profit from the land, it appears that he had carried out a crop cutting experiment on some Plot of land after the publication of the notification under section 4 (1) of the Land Acquisition Act.
It would appear that on behalf of the Department, a statement had been filed showing that the lands of similar quality were being sold at or about the time of publication of the notification under section 4 (1) of the Land Acquisition Act at Rs. 300 per kanal.
Shri Jaswant Singh (the Land Acquisition Officer) found that a mean between the valuation arrived at by him by adopting the principle of capitalisation i.e. Rs. 1,000/ per kanal and Rs. 300/ per kanal which, according to the Department was the value of the best category of land in the area would be a reasonable compensation.
Accordingly by adding the above two figures and dividing the total by two he arrived at Rs. 650/ per kanal as the value of the best category of land and reduced the value proportionately in respect of other categories of land which were lower in quality.
Virtually what was awarded was equivalent to thirteen times the net annual income.
Aggrieved by the award passed by the Land Acquisition Officer, the claimants demanded that a reference should be made under section 18 of the Land Acquisition Act to the Civil Court for the determination of proper compensation payable to them.
Accordingly the cases were referred to the District Court of Kangra at Dharamsala.
Alongwith these references, several other references also had 222 been made to that Court in respect of several other bits of lands situated at Tikka Bihari Tikka Bhararian which had been acquired at or about the same time.
The learned District Judge who tried the cases was of the view that the oral evidence adduced by the owners of the land on whom the burden of proof lay could not be relied upon.
After discarding the oral evidence, the learned District Judge determined the market value of the land by adopting the capitalisation principle.
He determined the compensation by multiplying the net annual income from each category of land by 20.
Accordingly he fixed the compensation of the best category of land at Rs. 1,000 per kanal having held that the net annual income per kanal of that class of land was Rs. 50.
For this purpose he appears to have relied on the result of the crop cutting experiment about which there was no evidence before him He rejected the reason given by the Land Acquisition Officer for reducing the compensation from Rs. 1,000 to Rs. 650 on the ground that the Department had asserted that the land of similar quality was being sold at or about the relevant time at Rs. 300 per kanal.
The compensation was fixed at comparatively lower rates in respect of other classes of land which were involved in these cases except in the case of G.M. abadi land for which he fixed at Rs. 650 per kanal.
Aggrieved by the decision of the District Judge, the Union of India and the State of Himachal Pradesh preferred appeals before the High Court of Himachal Pradesh.
The appellants contended that the methods adopted by Land Acquisition Officer and the District Judge were both faulty and if the principle adopted by them was used in respect of all the 70,000 acres of land acquired, the Government would suffer a huge loss.
It is necessary to state here that in the meanwhile the High Court disposed of two appeals being R.F.A. Nos. 16 and 17 of 1970 in respect of the same lands in Tikka Bihari where the two learned Judges (R.S. Pathak, C.J. (as he then was) and D.B. Lal, J.) who heard the said appeals by their separate judgments dated January 14, 1976 set aside the judgment of the District Judge and remanded the cases for fresh disposal to the District Court.
Pathak, C.J. in the course of his judgment observed : "In my opinion the position is this.
The Collector had determined the market value at Rs. 1000 per kanal of the best category of land.
He did this on the basis of a method recognised in law.
He then took into account 223 an offer of Rs. 300 per kanal made by the State.
He did not, when taking that rate into account, determine whether it was based on valid material on the record.
He acted arbitrarily in taking that offer into account.
Moreover, although he took that offer into account, he did not accept it as a proper basis for determining the market value.
He embarked on the novel method of adopting a mean between the market value of Rs. 1000 per kanal determined by him and the offer of Rs. 300 per kanal made by the State.
The learned Additional District Judge was entirely right in holding that the award of the Collector was misconceived.
But the learned Additional District Judge then proceeded wholly on the basis of the market value of Rs. 1000 per kanal determined by the Collector.
What he should also have done was to determine whether the exemplars on the record could serve as a guide for determining the market value.
It is this error which has vitiated the decision of the learned Additional District Judge".
After remand the claimants in those cases adduced some evidence which was not of much value.
Again the District Judge arrived at the very same valuation which had been determined by that Court earlier.
The appellants once again preferred appeals before the High Court.
The High Court dismissed those appeals in limine by a short order dated May 20, 1981.
The appeals filed against that order are also before us now.
Now coming back to the present appeals which arise out of R.F.A. No. 262 of 1980 and connected cases which were disposed of by a common judgment dated September 22, 1980, the High Court dismissed all the said connected appeals.
The present appeals are filed against that common judgment after obtaining the special leave of this Court under Article 136 of the Constitution.
Although the award passed by the Land Acquisition Officer deals with 18 classes of lands, we are concerned in this case with some of them only.
The rates of compensation awarded by the Land Acquisition Officer and the District Judge for the following classes of land involved in these cases are as follows : 224 Class of Land Rate per kanal Rate per kanal fixed in the award fixed by the of the Land District Judge Acquisition Officer Nehri awal Rs. 650 per kanal Rs. 1000 per kanal Nehri Bramdi Rs. 520 do Rs. 800 do Barani Dofasli Rs. 455 do Rs. 700 do Barani Ekfasli Rs. 390 do Rs. 600 do Banjar Kadim Rs. 260 do Rs. 400 do G.M. Abadi Rs. 650 do Rs. 1000 do (In Himachal Pradesh, 1 acre = 8 kanals) The High Court has confirmed the rates fixed by the District Judge.
At the outset we should state that we are not happy about the manner in which the proceedings have gone on in these and other similar cases relating to the acquisition of land for the Beas Project.
As mentioned earlier the total extent of land acquired is 70,000 acres.
We are told there are nearly 800 cases before this Court arising out of those acquisition proceedings.
There may be many others which have not yet reached this Court.
The only method of valuation adopted in all cases appears to be the capitalisation method.
The evidence regarding the crop cutting experiment said to have been conducted is not satisfactory.
The crop in question is said to have been grown after the acquisition proceedings commenced only for the purpose of determining the compensation.
Naturally if such crop is grown by the owner, there is bound to be some anxiety on his part to adopt extraordinary agricultural practices to show a higher yield than what would be the normal yield of the land.
It is seen that the direction given by Pathak, C.J. in the order of remand passed in 1976 in the cases pertaining to lands in Tikka Bihari referred to above appears not to have been kept in view either by the District Court and by the High Court when they subsequently disposed of hundreds of cases arising out of these land acquisition proceedings.
The approach on their part has been very casual.
The fact that any error committed in one of these cases would affect the compensation payable in respect of 70,000 acres of land does not appear to have weighed with the District Court and the High Court.
The spirit behind the observation made by one of us (A.P. Sen, J,) on the question of fixing the compensation for lands acquired under the Land Acquisition Act in the minority judgment of this Court 225 in The Collector.
Raigarh vs Dr. Harisingh Thakur and Anr.
and Vice Versa to the effect that "While it is not suggested that unfairly low value should be offered, on the other hand the temptation to over generosity must be equally resisted.
Such generosity at the public expense reacts against the development and against the prosperity of the country and imposes an unnecessary burden on the taxpayer" appears to be lacking in the disposal of these cases by the District Court and the High Court.
In these and other connected cases, neither the Land Acquisition Officer nor the High Court and the District Court have adopted the other well known methods of valuation of land namely, the price paid within a reasonable time in bona fide transactions in respect of the land acquired or adjacent lands which possess similar advantages, the price which a willing buyer was prepared to pay to a willing seller of such lands or the opinion of valuers or experts.
They have all followed the capitalisation method by adopting the 20 years ' purchase rule.
In the absence of any reliable evidence to adopt the other methods of valuation, we are also driven in these cases to adopt the very same capitalisation method in disposing of these appeals.
Although we are not satisfied with the determination of the net annual profit from each plot of land acquired in these proceedings, we have to adopt the finding of the District Court which has been affirmed by the High Court on the facts and in the circumstances of these cases as none of the parties has questioned it.
The only question which remains to be determined is the appropriate number of years purchase that should be followed in the case of acquisition made in the years 1962 and 1963.
The relevant date for determining compensation of a property acquired under the Land Acquisition Act, 1894 is the date on which the notification under section 4 (1) is published.
The capitalised value of a property is the amount of money whose annual interest at the highest prevailing interest at any given time will be its net annual income.
The net annual income from a land is arrived at by deducting from the gross annual income all out goings such as expenditure 226 on cultivation, Land revenue etc.
The net return from landed property generally speaking, reflects the prevalent rate of interest on safe money investments.
It is on this basis, Rajamannar offg.
C. J. held in T. Radhakrishna Chettiar vs The Province of Madras that the number of years ' purchase to be adopted was 33 1/3 where the interest paid on gilt edged securities at the time of acquisition i. e. in 1942 was 3% per annum.
But the same learned Chief Justice held in Sri Lakshmi Narasimha Devaru & Anr.
vs The Revenue Divisional Officer.
Mangalore & Anr.
that 20 years ' purchase was the appropriate rule to be followed in determining the value of agricultural Land acquired in the year 1943 by capitalisation method.
In State of Kerala vs Hassan Koya in the case of a Land with building acquired in the year 1954 when Government securities were yielding 3 1/2% per annum, this Court upheld the decision of the Kerala High Court which had adopted 33 1/3 as the multiple for determining compensation payable in respect of it.
For a land acquired in the year 1952.
this Court in The State of West Bengal vs Shyama Pada etc.
awarded compensation at 20 times the net annual income.
In Varadarajulu Naidu vs The Revenue Divisional Officer, Tirukoilur, the High Court of Madras in the case of a land acquired in the year 1956 adopted the rule of 11 years ' purchase.
In Oriental Gas Ltd. & Ors.
vs State of West Bengal, the Constitution Bench of this Court speaking through Chinnappa Reddy, J. observed: "The next target of Mr. Sen 's attack was the choice of the multiplier.
He submitted that in the year 1962 gilt edged securities were fetching no more than six per cent per annum and therefore, not eight, but some other higher multiplier should have been specified.
The argument of Shri Sen is based on the observation of Shah, J., in Cooper 's case that `capitalisation of the net annual value of the property at a rate equal in normal cases to the return from gilt edged securities ' was an important method of determination of compensation.
The very use of the word normal by Shah J., indicates 227 that it was not intended to lay down any invariable rule that whenever a method of capitalisation of net profit was adopted, the return from gilt edged securities was to be the basis.
That should depend on a variety of circumstances such as the nature of the property, the normal return which may be expected on like investment, the state of the capital market and several such factors.
For example, it is well known that a large investment yields a higher return that a smaller investment and similarly a long term investment yields a better return than a short term investment.
A different principle and a different multiplier may have to be applied to different kinds of property, such as, agricultural land, residential buildings, industrial undertakings etc.
In the case of a going business or industrial undertaking the appropriate multiplier may be determined on the basis of the annual return of an undertaking with similar capital investment.
If the Legislature thinks that a return of 12 1/2% in the case of a large industrial undertaking such as the petitioner 's is reasonable and on that basis adopts the multiplier `eight ', it is not for this Court to sit in judgment and attempt to determine a more appropriate multiplier.
We are unable to see how the adoption of the particular multiplier in the present case is the result of the application of any irrelevant principle.
We do not, therefore, agree with the submission of Shri Sen., ' In the above case the Court felt that if 12 1/2% was the annual return, the adoption of multiplier `eight ' could not be unreasonable in the year 1962 in the case of an industrial undertaking.
A perusal of the decisions referred to above and some others which have not been cited here shows that in India the multiplier which is adopted in determining the compensation by the capitalisation method has been 33 1/3, 25, 20, 16 3/2 11 and 8.
The number of years ' purchase has gradually, decreased as the prevailing rate of interest realisable from safe investments has gradually increased the higher the rate of interest, the lower the number of years ' purchase.
This method of valuation involves capitalising the net income that the property can fairly be expected to produce and the rate of capitalisation is the percentage of return on his investment that a willing buyer would expect 228 from the property during the relevant period.
It was once felt that the relevant rate of interest that should be taken into consideration was the interest which gilt edged securities or Government bonds would normally fetch.
The safety and liquidity of the investment in bonds were relied on as the twin factors to take the view that the interest on gilt edged securities should alone be taken into consideration.
This was at a time when there were not many avenues of safe investments and investment in private commercial concerns was not quite reliable.
But from the year 1959 60 circumstances have gradually changed.
There are many State Banks and nationalised banks in which deposits made are quite safe.
Even in the share market we have many `blue chips ' which command stability and other attendant benefits such as the possibility of issue of bonus shares and rights shares and appreciation of the value of the shares themselves.
They are attracting a lot of capital investment.
A return of 10% per annum on such safe investments is almost assured.
Today nobody thinks of investing on land which would yield a net income of just 5% to 6% per annum.
A higher return of the order of 10% usually anticipated.
Even in the years 1962 and 1963 an investor in agricultural land expected annual net return of at least 8%.
It means that if the land yielded a net annual income Rs. 8 a willing buyer of land would have paid for it Rs. 100 i. e. a little more than 12 times the annual net income.
The multiplier for purposes of capitalisation would be about thirteen.
On the question of the potential value of the lands involved in these cases, we may state here that there is no evidence suggesting that the lands were likely to be in demand for any other purpose.
They were all agricultural lands or banjar lands on which no agricultural operations could be carried on.
They were situated in a hilly tract.
There were no potential buyers who were in need of this vast tract of 70,000 acres.
If the project work had not been undertaken possibly there would have been no occasion for the sale of all these lands in one lot.
Having regard to all the facts and circumstances of the case we feel that the High Court and the District Court erred in applying the twenty years, purchase rule in the case of these lands which were acquired in the years 1962 and 1963.
The proper principle was fifteen years ' purchase rule.
The District Judge awarded compensation in all these cases at Rs. 1,000 per kanal for the land of the first category by applying the twenty years ' purchase rule and has fixed the compensation for other lands on the above basis.
The 229 High Court has affirmed it.
Since we have held that the proper basis of fixing compensation in these cases was fifteen years ' purchase rule, the compensation awarded for lands in these cases should be reduced by one fourth i.e. for lands of the first category compensation payable should be Rs. 750 per kanal instead of Rs. 1,000 per kanal.
Similarly in the case of other lands also there should be a reduction of the compensation awarded by one fourth.
The claimants shall get solatium of 15% on the compensation computed on the above basis and they shall be paid interest at the rate ordered by the District Judge on the aggregate amount from the date of taking possession of the land till the date of payment.
The orders passed by the High Court in all these cases shall stand modified accordingly.
The appeals are accordingly allowed in part.
Parties shall bear their own costs throughout.
N.V.K. Appeals partly allowed.

summary:
Certain lands were notified for acquisition in the years 1962 and 1963 under s.4(1) of the Land Acquisition Act, 1894.
On the question of payment of compensation the Land Acquisition Officer, relying on an earlier award in respect of similar lands acquired for the very same public purpose adopted the same criteria and fixed the compensation.
He adopted the principal of capitalisation and determined the compensation at Rs. 650 per kanal, as the value of the best category of land and awarded compensation equivalent to 13 times the net annual income.
On reference under Sec.18 the District Judge determined the market value of the land adopting the capitalisation principle, and determined the compensation by multiplying the net annual income from each category of land by 20.
The Union of India and the State Government preferred appeals and contended before the High Court that if the principle adopted by the authorities below was used the Government would suffer.
These appeals were however dismissed.
In the meanwhile the High Court in appeals arising out of similar awards set aside the orders of the District Judge and remanded the cases for fresh disposal for failure to determine whether the exemplars on the record could serve as a guide for determining the market value.
After remand the District Judge arrived at the very same valuation and this was confirmed by the High Court.
In the appeals to this Court on the question as to what should be the multiplier to be adopted in determining the compensation payable in respect of land acquired in the year 1962 63 where the market value of the land is fixed on the basis of the capitalisation principle.
Allowing the appeals in Part, HELD: 1.
The High Court and the District Court erred in applying the twenty years purchase rule in the case of these lands which were acquired 218 in the years 1962 and 1963.
The proper principle was fifteen years ' purchase rule.[228 H] 2.
The relevant date for determining compensation of a property acquired under the Act, is the date on which the notification under s.4(1) is published.
The capitalised value of a property is the amount of money whose annual interest at the highest prevailing rate of interest at any given time will be its net annual income.
The net annual income from a land is arrived at by deducting from the gross annual income all outgoings such as expenditure on cultivation, land revenue etc.
The net return from landed property, reflects the prevalent rate of interest on safe money investments.
[225 G H; 228 A] 3.
(i) In India the multiplier which is adopted in determining the compensation by the capitalisation method has varied from time to time.
The number of years purchase has gradually decreased as the prevailing rate of interest realisable from safe investments has gradually increased, the higher the rate of interest, the lower the number of years purchase.
This method of valuation involves capitalising the net income that the property can fairly be expected to produce and the rate of capitalisation is the percentage of return on investment that a willing buyer would expect from the property during the relevant period.[227 G H; 228 A] (ii) In the years 1962 and 1963 an investor in agricultural land expected annual net return of at least 8%.
If the land yielded a net annual income of Rs. 8 a willing buyer of land would have paid for it Rs.100 i.e. a little more than 12 times the annual net income.
The multiplier for purposes of capitalisation would be about thirteen.[228 D E] (iii) In these cases there was no evidence about the potential value of the lands.[228 F] (iv)In the instant cases neither the Land Acquisition Officer nor the High Court nor the District Court has adopted the other well known methods of valuation of land namely, the price paid within a reasonable time in bona fide transactions in respect of the land acquired or adjacent lands which possess similar advantages, the price which a willing buyer was prepared to pay to a willing seller of such land or the opinion of valuers or experts.
In the absence of any reliable evidence to adopt the other methods of valuation the very same capitalisation method was applied and the Court adopted fifteen years ' purchase rule for determining compensation has to be adopted.[225 C E] The Collector, Raigarh vs Dr. Harisingh Thakuar and An. and Vice Versa; , ; State of Kerala vs Hassan Koya; , ; The State of West Bengal vs Shyamapada etc.
, A.I.R. 1975 S.C. 1723; Oriental Gas Ltd. referred to.


judgement:
Civil Appeal No. 1396 of 1982.
Appeal by Special leave from the Award dated the 26th July, 1980 of Shri A.K. Thorat, Industrial Tribunal, Maharashtra, Bombay passed in Reference (IT) No. 54 of 1980.
M.K. Ramamurthi, P. Gaur, Jitendra Sharma for the Appellants.
G.B. Pai, O.C. Mathur, section Kumaran, Ms. Meera Mathur, D.N. Misra for the Respondents.
The following Judgments were delivered by CHINNAPPA REDDY, J. : The workmen of the Bharat Petroleum Corporation Limited, Bombay raised an Industrial dispute with regard to the retirement age of the clerical staff employed in the Refinery Division of the Bharat Petroleum Corporation Limited at Bombay.
The demand of the workmen was that the retirement age of the clerical staff of the Refinery Division at Bombay must be raised from 55 years to 60 years in keeping with the 'trend ' in the Bombay region.
The Company resisted the demand on the ground that in all similar oil companies, the retirement age of the clerical 255 staff engaged in the Refinery Division had never been fixed at 60 years.
Before the Industrial Tribunal, Maharashtra at Bombay to whom the dispute was referred for adjudication, neither party led any oral evidence.
The workmen relied upon several decisions of this court to establish that the trend of industry in Bombay was to fix the retirement age of the clerical staff at 60 years, while the company contented itself by filing a statement showing the age of retirement of clerical staff employed in various oil companies.
The Industrial Tribunal found as a fact that the wage scales of the company were not much better than the wage scales of other comparable concerns.
The Industrial Tribunal also noticed that the age of retirement of the clerical staff of the company in its Marketing Division both at Bombay and other places was fixed at 58 years.
The Industrial Tribunal, therefore, held that there was no valid reason why the retirement age of the clerical staff employed in the Refinery Division should not be raised at least to 58 years.
But having regard to the circumstance that the clerical staff employed in the Refinery Division had already been granted, under a settlement, the benefits of Provident Fund and Gratuity and having further regard to the fact that while the number of members of the clerical staff employed in the Refinery Division was 148 only, there were as many as 1095 workmen in the non clerical category, who would also surely raise a dispute to revise their retirement age, the Industrial Tribunal thought that in the interest of industrial harmony, it would be proper to raise the retirement age of the clerical staff to 58 years only and not to 60 years.
The workmen have preferred this appeal under article 136 of the Constitution.
As before the Industrial Tribunal, so too before us, the workmen relied on the 'trend ' in the Bombay region while the company relied on the position in other oil companies.
In fixing the age of retirement, several factors have to be taken into consideration.
These factors have been explained at length in Guest, Keen, Williams Private Ltd. vs P.J. Sterling & Ors., Dunlop Rubber Company Limited vs Workmen & Others, Imperial Chemical Industries (India) Pvt. Ltd. vs Workmen, British Paints (India) Ltd. vs Its Workmen, G.M. Talang 256 vs Shaw Wallace & Co. ' and Burmah Shell Oil Storage of Distributing Company of India Ltd. vs Their Workmen.
Guest, Keen Williams Private Ltd. vs P. J. Sterling & Others was a case from Calcutta and it may not be useful to discover the trend in the Bombay region.
However, some of the relevant factors to be taken into account in fixing the age of superannuation have been stated and we may usefully extract the observations made by the learned judges in that case.
It was said: "In fixing the age of superannuation industrial tribunals have to take into account several relevant factors.
What is the nature of the work assigned to the employees in the course of their employment ? What is the nature of the wage structure paid to them ? What are the retirement benefits and other amenities available to them ? What is the character of the climate where the employees work and what is the age of superannuation fixed in comparable industries in the same region ? What is generally the practice prevailing in the industry in the past in the matter of retiring its employees ? These and other relevant facts have to be weighed by the tribunal in every case when it is called upon to fix an age of superannuation in an industrial dispute.
" The 'trend ' of industry in the Bombay region to raise the age of retirement from 55 to 60 years was noticed by this court in Dunlop Rubber Company vs Workmen & Others, Imperial Chemical Industries (India) Pvt. Ltd. vs Workmen, British Paints (India) Ltd. vs Its Workmen, G.M. Talang vs Shaw Wallace & Co. and Burmah Shell Oil Storage & Distributing Company of India Ltd. vs Their Workmen.
In the Dunlop Rubber Company case, the Tribunal noticed that the trend in the Bombay region was to raise the age of retirement to sixty years for clerical staff and, accordingly, raised the age of the clerical staff of the company to sixty years, notwithstanding the fact that in the previous agreement, the retirement age was 257 fixed at 55 years.
The Supreme Court upheld the award as it accorded with the prevailing conditions in many concerns in that region.
One of the submissions made to the Supreme Court was that the clerical staff of the company employed in Bombay was a small minority of the total clerical staff employed by the company through out India, that in the case of the large majority employed outside Bombay, the age of retirement was 55 and, therefore, the retirement age of the small minority of workmen employed in Bombay should not be raised from 55 to 60 years.
It was argued that the company was an All India concern and occupied a special position, and it was, therefore, desirable and proper that no change should be made to benefit a small minority of workmen employed in Bombay.
The submission was repelled by the Supreme Court and it was observed: "There is no doubt that in the case of an all India concern it would be advisable to have uniform conditions of service through out 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 cum region 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 uniformly in force through out 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 it into 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.
" It will be seen that great emphasis was laid on the conditions prevailing in the region even to the extent of overriding the conditions 258 of service of other workmen in the employment of the very company elsewhere.
In Imperial Chemical Industries (India) Pvt. Ltd. vs The Workmen, Gajendragadkar, J observed: "It is generally recognised in industrial adjudication that where an employer adopts a fair and reasonable pension scheme that would play an important part in fixing the age of retirement at a comparatively earlier stage.
If a retired employee can legitimately look forward to the prospect of earning a pension then the hardship resulting from early compulsory retirement is considerably mitigated; that is why cases where there is a fair and reasonable scheme of pension in vogue would not be comparable or even relevant in dealing with the age of retirement in a concern where there is so much pension scheme".
In that case it was submitted by the Attorney General who appeared for the company that the company was an All India concern and it was of great importance that the terms and conditions of service prevailing in several branches of the company all over the country should be stable and uniform and that in the matter of retirement the company had uniformly fixed the age of retirement at 55 since 1950 and this arrangement should not be disturbed because it would inevitably upset the age of retirement in all other branches.
It was also submitted that the Tribunal had raised the age of retirement from 55 to 58 and that the Supreme Court should not interfere with the decision of the Tribunal and further raised it to 60.
It was also urged that the general terms and conditions provided by the company to its employees were very liberal and that the industrial concerns in Bombay where the age of retirement had been fixed at 60 were not comparable to the company and, therefore, no importance should be attached to the trend disclosed by those companies.
All these submissions were rejected by the court on the primary consideration that the recent trend in the Bombay area clearly appeared to be to fix the age of retirement at 60.
In British Paints India Limited vs Its Workmen, this court expressed the view that there had been a general improvement in the standard of health in the country and that longevity had increased and therefore, fixation of age of retirement at 60 years appeared to 259 be quite reasonable in the circumstance.
The court, further observed that the age of retirement at 55 years was fixed in the last century in Government service and had become the pattern for fixing the age of retirement every where.
The court then said: "But time in our opinion has now come considering the improvement in the standard of health and increase in longevity in this country during the last fifty years that the age of retirement should be fixed at a higher level, and we consider that generally speaking in the present circumstances fixing the age of retirement at 60 years would be fair and proper, unless there are special circumstances justifying fixation of a lower age of retirement".
In G.M. Talang vs Shaw Wallace & Co. reference was also made to the report of the Second Pay Commission which had referred to the age of retirement in 48 countries of the world and to the report of the Norms Committee, a Committee on which both employers and employees of the Bombay region were represented, which had said: "After taking into consideration the views of the earlier Committees and Commissions including these of the Second Pay Commissions the report of which has been released recently, we feel that the retirement age for workmen, in all industries, should be fixed at 60 years.
Accordingly the norm for retirement age is fixed at 60".
The comment of the court on the report of the Norms Committee was: "This considered opinion of a Committee on which both employers and employees were represented emphasised the fact that in the Bombay region, at least there is a general agreement that the age of retirement should be fixed at 60.
" In the Burmah Shell Oil Company case, this court observed. "In fixing the age of superannuation the most important factor that has to be taken into consideration is the trend in a particular area.
That position is made clear by this court in Talang (G M ) and Others vs Shaw Wallace & Co. Ltd. There is no denying the fact 260 that life expectation has greatly increased in recent years due to healthier living conditions, better food and improved medical facilities though we have still a long way to go in that regard.
Under modern conditions, speaking generally, the efficiency of workmen is not impaired till about 60 years.
The needs of a workman are likely to be greater between the age of 50 to 60 years as during that period he has to educate his children, marry his daughters, in addition to maintaining his family.
If one looks at the word trend it is obvious that the age of superannuation is gradually pushed up. . . . . . . . . . . . .As we said earlier, in the matter of fixing the age of superannuation, the trend in a particular area is the most important factor, though in the matter of determining the other conditions of service of workmen, the principle of region cum industry is by and large the determinative factor. . . . . . . . . ."From the various decisions rendered by this court and by the tribunals, it is obvious that the trend is to raise the age of superannuation.
It is also clear from those decisions that so far as Bombay, Calcutta and Delhi areas are concerned, the trend appears to raise the age of superannuation to 60 years.
" On the facts of the case, however, the court noticing that in the appellant company, there was a fair pension scheme for the clerical staff, fixed the age of superannuation in their case at 58 years, while leaving untouched the decision of the Tribunal fixing the retirement age of other workmen at 60 years.
It is to be noticed that the four cases which related to the Bombay region were all of the early sixties.
Two decades have passed, Industrial and labour conditions do not remain stagnant despite the passage of time.
Industrial labour relations need revision from time to time to fit and suit changing conditions.
That there was an upward trend to raise the age of retirement to sixty in the early sixties may not necessarily mean that the same trend has continued till today.
But, in the present case, the company did not plead that there was any reversal of the trend nor did Shri G.B. Pai, learned counsel for the company, urge before us that there was any such reversal of the trend.
On the other hand, it may very well be said 261 that there has been much progress in the last two decades in the matter of better living conditions and availability of medical and health facilities and, therefore, a further raise of the age of retirement may be considered necessary and justified.
Shri Pai rightly did not urge before us that there was any reversal of the trend in the Bombay region and we are, therefore spared from going into that question.
In the Dunlop Rubber Company Case and in the Imperial Chemical Industries Case, the Supreme Court primarily relied on the trend in the region and in the Burmah Shell oil Company case, the Court observed that the trend in a particular area was the most important factor in the matter of fixing the age of superannuation.
Another factor which appears to be receiving importance in certain circles is the rising rate of unemployment amongst the younger generation.
The effect of increasing or decreasing the age of retirement on the rate of unemployment in the younger generation and on the household economics of the older generation is a matter for deep study and investigation.
There is no evidence before us on these points.
Nowadays, as pointed out in the Burmah Shell oil Company 's case and other cases, because of better conditions of living and availability of medical and health facilities, the average span of life has increased and a person between 55 and 60 years of age is alert, active, hale and healthy and may be said to be at the prime of his life.
That is also the time when he has to meet several financial commitments and demands.
To retire him at that age may mean virtually to throw him to the wolves.
Can the nation afford to have on its hand several families unable to fully support themselves ? Can the nation afford to throw away the knowledge and experience of these people by retiring them when they are still capable of turning out some years of good work ? On the other hand, can the nation afford to have an army of unemployed, youngmen, necessarily leading bitter and frustrated lives ? Can the nation afford to allow them to fritter away their energies in unhealthy pursuits to which they may be tempted ? But then arises the broader question, is the retirement of men of experience at an age when they are still useful to the community the proper solution to the problem of unemployment among the young ? Is it not an unimaginative solution ? Is not the solution the creation of greater employment opportunities, by increasing production and its modes ? All these are questions which are difficult to answer though everyone has an opinion, often ad hoc.
These questions require deep investigation, research and study.
We cannot properly answer them nor is there any evidence on these points.
The counsel, we must say in fairness, refrained 262 from arguing that the retirement age should not be raised because of the rising rate of unemployment and we also refrain from expressing any opinion.
The workmen were content to rely on the undoubted trend as revealed by the decisions of this court and the company was content to rely on the comparative statement of retirement age of clerical staff in other oil companies.
We are compelled to decide this case on the limited material available to us and we, therefore, confine the decision to the facts of the case.
The Tribunal noticed that the age of retirement of the clerical staff of the company in its Marketing Division was 58 years and observed: "Similarly, it is apparent that the company has fixed the age of retirement of the clerical staff in its Marketing Division, both in Bombay and other places at 58 years.
I do not find any valid reason while the concerned workmen should be denied a raise in the age of their retirement at least to the extent of 58 years." So according to the Tribunal, the retirement age of the clerical staff of the Refinery Division had to be increased at least to 58 years, since the retirement age of the clerical staff of the Marketing Division of the Company had been fixed at years.
The relevant and outstanding fact which the Tribunal failed to notice here was that the clerical staff of the Marketing Division have a pension scheme while the clerical staff of the Refinery Division have no such scheme.
The general terminal benefits on attaining the age of superannuation are pension, gratuity and provident fund.
It is not in dispute that while the clerical staff of the Marketing Division have all three terminal benefits, the clerical staff of the Refinery Division are not entitled to any pension.
This must necessarily have an impact on the raising of their retirement age.
Therefore, without travelling outside the very company, we think that the Industrial Tribunal fell into a serious error in failing to notice that there was no pension scheme in the case of clerical staff of the Refinery Division while there was such a scheme in the case of a clerical staff of the Marketing Division.
On the material available to us, we think that the retirement age in the case of clerical staff of the Division should be fixed at 60 years.
Shri G.B. Pai, learned counsel for the Respondent Corporation drew our attention to the circumstances that the new scales of pay 263 of the clerical staff of the Refinery Division of the Respondent Corporation compared favourably with the scales of pay of the clerical staff of other refineries elsewhere in Indian and were higher than the scales of pay of the clerical staff of the Marketing Division of the Respondent Corporation itself.
Shri Pai, however would not go so far as to say that the scales of pay were so designed taking into account the provision for pensionary benefits or the lack of it.
He could not do so for the obvious reason that it would be an irrelevant consideration unless he could assert that the wage structure took into account the 'capacity for savings ' factor.
Again, obviously, he could not so assert as that was never the company 's case and also in view of the rising universal inflationary trend of which we are bound to take judicial notice.
The differing nature and conditions of work may well be the reason for the different scales of pay.
We assume nothing and so we make no comment one way or the other in the absence of evidence.
It is enough for the present purpose to say that the Tribunal did not base its conclusion on this circumstance.
Shri Pai invited our attention to the circumstance that in other refineries elsewhere in India, the retirement age of clerical staff has generally been fixed at 58.
But we are primarily concerned with the trend in the Bombay region.
In matters of this nature, greater importance must naturally be given to the regional factor That was why in the Dunlop case, emphasis was laid on the "prevailing conditions, particularly in the region", in the Imperial Chemical Industries case, the trend in the Bombay region was considered the most vital factor and in the Burmah Shell case, it was stressed that in fixing the age of superannuation, the most important factor that had to be taken into consideration was the trend in the particular area.
We may add here that in applying the region cum industry formula, the emphasis to be placed on region or industry depends upon varying factors.
In Greaves Cotton and Co. Ltd. vs Their workmen, this Court observed that where the number of industries of the same kind in a particular region was small, it was the regin aspect of the industry cum region formula which assumed importance particularly in the case of clerical and subordinate staff.
Reference was made to Workmen of Hindustan Motors vs Hindustan Motors and French Motor Car Company vs their Workmen and it was said: 264 "Where there are a large number of industrial concerns of the same kind in the same region, it would be proper to put greater emphasis on the industry part of the industry cum region principle as that would put all concerns on a more or less equal footing in the matter of production costs and therefore, in the matter of competition in the market and this will equally apply to clerical and subordinate staff whose wages and dearness allowance also go into calculation of production costs.
But where the number of comparable concerns is small in a particular region and therefore, the competition aspect is not of the same importance, the region part of the industry cum region formula assumes greater importance particularly with reference to clerical and subordinate staff and this was what was emphasised in the French Motor Car Company case where the company was already paying the highest wages in the particular line of business and therefore comparison had to be made with as similar concerns as possible in different lines of business for the purpose of fixing wage scales and dearness allowance.
The principle therefore which emerges from these two decisions in that in applying the industry cum region formula for fixing wage scales the tribunal should lay stress on the industry part of formula if there are a large number of concerns in the same region carrying on the same industry; in such a case in order that production cost may not be unequal and there may be equal competition, wages should generally be fixed on the basis of the comparable industries, namely, industries of the same kind.
But where the number of industries of the same kind in a particular region is small, it is the region part of the industry cum region formula which assumes importance particularly in the case of clerical and subordinate staff, for as pointed out in the French Motor Car Company case there is not much difference in the work of this class of employees in different industries.
" In French Motor Car Co. vs Their workmen, an argument was advanced that the appellant company was paying the highest wage scales in a particular line of business in which it was engaged and there was, therefore, no justification for increasing the wage scales 265 by comparison with wage scales in other lines of business.
This argument was rejected with the following observations: "We are of opinion that this argument cannot be accepted, for it would then mean that if a concern is paying the highest wages in a particular line of business, there can be no increase in wages in that concern whatever may be the economic conditions prevailing at the time of dispute.
It seems to us, therefore, that where a concern is paying the highest wages in a particular line of business, there should be greater emphasis on the region part of the industry cum region principle, though it would be the duty of the industrial court to see that for purposes of comparison such other industries in the region are taken into account as are as nearly similar to the concern before it as possible.
Though, therefore, in a case where a particular concern is already paying the highest wages in its own line of business, the industrial courts would be justified in looking at wages paid in that region in other lines of business, it should take care to see that the concerns from other lines of business taken into account are such as are as nearly similar as possible, to the line of business carried on by the concern before it." In Workmen of Orient Paper Mills Ltd. vs Orient Paper Mills Ltd, this Court relying on the French Motor Car Company case held that where two other paper industries in the region are of recent origin and their profits were smaller, it was the duty of the Industrial Tribunal not to compare the appellant company with those companies, but to compare the same with other industries in the region, three of which were collieries, two cement companies, on a steel plant and one aluminium factory.
These decisions make it clear that where there are no comparable industries in the region, the regional aspect of the region cum industry formula must be given precedence.
That was what was done in the Dunlop Rubber Co., the Imperial Chemical Industries and the Burmah Shell oil Co. cases.
Rightly, therefore, the Tribunal did not rest its conclusion on this factor.
266 Shri Pai informed us that even in the case of the clerical staff of the Marketing Division, there is no longer any pension scheme for those that have joined the Corporation after nationalisation.
This again was not one of the grounds on which the Tribunal rested its conclusion and we wish to say no more about it, as we do not want to jeopardise any claim that the workmen may have on that basis or any answer that the Management may have in that regard.
In the result the appeal is allowed and the retirement age of the clerical staff of the Refinery Division of the company is fixed at 60 years, There will be no order as to costs.
VARADARAJAN, J.
This appeal by special leave is directed against the award dated 1.7.1980 made by the Industrial Tribunal, Bombay in I. T. No. 84 of 1980 raising the age of retirement of the clerical employees of the Refineries Division of the respondent from 55 years to 58 years in so far as it rejected the claim of the appellants to the age of retirement being raised to 60 years.
The dispute referred to the Industrial Tribunal, Bombay was between the Bharat Petroleum Corporation Limited, Bombay (for short "Company") and their Workmen represented by the Burmah Shell Refineries Clerical Staff Union (for short "first union") and the Petroleum Workmen 's Union (for short "second union").
The Company has a marketing division and a refinery division at Bombay.
The age of retirement of the clerical employees of the Company is 58 years in the marketing division and 55 years in the refinery division.
The question for consideration by the Tribunal was whether the age of retirement of the clerical employees of the Company 's refinery division should be raised to 60 years from 55 years.
The retirement age of the clerical employees of the refinery division had been fixed at 55 years by a settlement dated 31.10.1973 which was to be in force for a period of four years and thereafter until it is terminated in accordance with the provisions of s.19(2) of a the .
The period of four years fixed in that settlement expired on 31.10.1977 and the first union terminated that settlement in so far as it related to the age of retirement of the clerical employees of the refinery division by a notice dated 6.4.1979 after making a demand by a notice dated 15.1.1979 on the Company to raise the age of retirement of these clerical employees to 60 years.
The first union 's contention according to its claim statement was that the model standing orders provide for the age of retirement of the clerical employees being 60 years and there is a 267 trend in the Bombay region to fix the age of retirement of clerical employees at 60 years and in the comparable concerns as well as in the marketing division of the Company itself the age of retirement of the clerical employees is above 55 years and, therefore, the present age of retirement of the clerical employees of the refinery division is low and should be raised from 55 years to 60 years with effect from the date of the reference.
The second union put forward almost similar grounds in its claim statement filed in support of the demand of the clerical employees of the refinery division.
The Company denied in its statement of defence that the model standing orders framed by the Central Government provide for the age of retirement being 60 years and contended that the settlement dated 31.10.1973 was a package deal arrived at in consideration of the union agreeing inter alia to the age of retirement being fixed at 55 years and the Company revised certain benefits which would not have been revised otherwise.
The Company disputed the correctness of the grounds relied upon by the unions in support of their claim for raising the age of retirement of the clerical employees of the refinery division to 60 years.
The Tribunal rejected the Company 's contention that the reference itself is not competent in view of the said settlement dated 31.10.1973 as being untenable.
That question is not in dispute in this appeal.
The parties filed a joint statement before the Tribunal saying that they do not want to let in any oral evidence.
The Company and the first union produced their respective comparative statements.
In addition to the comparative statement, strong reliance was placed by the unions on what is called the trend in the Bombay region to fix the age of retirement at 60 years.
The Company 's comparative statement showed that on 1.4.1980 there were 148 clerical employees and 1095 non clerical employees in the Company and provided information in regard to wage scales and other benefits such as provident fund and gratuity and admitted that the age of retirement of the clerical employees in the Company 's marketing division at Bombay is 58 years while that of the clerical employees of the Company 's refinery division at that place is only 55 years.
It was contended for the Company before the Tribunal that the wage scales of the clerical employees covered by this reference are far better than those of similar categories of employees in comparable 268 concerns and that the Company took a generous view in the settlement dated 31.10.1973 and arrived at a package deal and revised the benefits of the employees taking into consideration the agreement of the employees to continue the age of retirement of the clerical employees of the refinery division at 55 years.
The Tribunal found that the contention regarding the settlement being a package deal in regard even to the age of retirement after taking other benefits into consideration was not without substance and observed that it is, however, not sufficient to reject the demand of the clerical employees of the refinery division for raising the age of retirement in toto and that it has to be taken into account while considering the extent to which the age of retirement should be raised.
The following observation made by this Court in Guest Keen Williams Private Ltd. vs Sterling and others was noticed by the Tribunal: "In fixing the age of superannuation the Industrial Tribunals have to take into account several relevant factor.
What is the nature of the work assigned to the employees in the course of their employment ? What is the nature of the wage structure paid to them ? What are the retirement benefits and other amenities available to them ? What is the character of the climate where the employees work and what is the age of superannuation fixed in comparable industries in the same region ? What is generally the practice prevailing in the industry in the past in the matter of retiring its employees ? These and other relevant facts have to be weighed by the tribunal in every case, when it is called upon to fix an age of superannuation in an industrial dispute.
" The Tribunal noticed also the following observation made in a later decision of this Court in the case of Burmah Shell (Delhi Region): "In fixing the age of superannuation the most important factor that has to be taken into consideration is the trend in a particular area.
That position is made 269 clear by this Court.
There is no denying the fact that life expectation has greatly increased in recent years due to healthier living conditions, better food and improved medical facilities though we have still a long way to go in that regard.
Under modern conditions, speaking generally, the efficiency of workmen is not impaired till about 60 years.
The needs of a workman are likely to be greater between the age of 50 and 60 years, as during that period, he has to educate his children, marry his daughters, in addition to maintaining his family.
If one looks at the word trend, it is obvious that the age of superannuation is gradually pushed up." The Tribunal commented upon the lack of evidence relating to the various factors indicated in the above passage in the present case and has arrived at its decision as follows: "The only material placed before me pertains to the wage scales in existence in the industries in the region and more so comparable industries.
The wage scales of the Company and those of other comparable concerns do not show that the wage scales of the Company are much better.
Similarly, it is apparent that the Company has fixed the age of retirement of the clerical staff in its Marketing Division, both in Bombay and other places 58 years.
I do not find any valid reason why the concerned workmen should be denied a raise in the age of their retirement at least to the extent of 58 years.
I have already observed that the concerned workmen have been granted benefits of retirement by way of provident fund and gratuity under the Settlement.
It is also to be borne in mind that there are about 1095 workmen in the non clerical category.
They may also raise a dispute about the revision of their retirement age.
Here, neither party has placed on the record the extent of additional financial burden consequent upon the grant of the demand in terms it is made.
To keep harmony amongst the workmen of the Company employed in its Marketing Division and Refinery, it is proper to raise the age of retirement of the concerned workmen to 58 years, and not to 60 years in terms of the demand.
For the aforesaid reasons, the age of retirement of the clerical staff is fixed at 58 years.
" 270 Unfortunately, very limited material is available on record for arriving at a decision in this case.
Before the Tribunal comparative statements regarding the wage scales and other benefits such as gratuity and provident fund and age of retirement were produced by the Company and the first union and the unions relied upon the trend in the Bombay region to fix the age of retirement of employees at 60 years.
In this Court Mr. M.K. Ramamurthi, Senior Counsel appearing for the appellants invited this Court 's attention to and heavily relied upon some decisions of this Court in which that trend has been noticed.
The Tribunal also noticed the decision of this Court in the Burmah Shell (Delhi region 's) case (supra) in which also reference has been made to the trend as seen from the passage in that judgment extracted earlier.
Mr. G.B. Pai, Senior Counsel appearing for the Company admitted before this Court as had been done even before the Tribunal that there is no pension scheme for the clerical employees of the refinery division of the Company with whom we are concerned in this case.
He also admitted that there is a pension scheme in regard to clerical employees of the Company 's marketing division at Bombay.
But he submitted that scheme is restricted to only employees who had joined service before the date of nationalisation of the oil companies and does not relate to those who joined service after that date.
The fact that the pension scheme relating to the marketing division applies to only employees who had joined service in the Company before the date of nationalisation is not disputed by Mr. Ramamurthi.
It is true that the Tribunal has not noticed the fact that there is such a pension scheme for some of the Company 's employees in the marketing division at Bombay.
Mr. Pai drew this Court 's attention to comparative statements produced by the Company as exhibits 'A ' and 'B ' with the counter affidavit filed in the special leave petition in this Court.
They are referred to in paras 15 and 17 of that counter affidavit.
No objection was raised by Mr Ramamurthi to Mr. Pai drawing this Court 's attention to those comparative statements.
One of those statements shows the salaries of junior and senior clerical employees in all the oil companies (corporations) in this country.
It is seen from that statement that there are four oil companies in this country, namely, Hindustan Petroleum Corporation Limited.(Caltex), Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited.
The pay scales of junior clerical employees of the Hindustan Petroleum Corporation Limited are Rs. 890.50 Rs.
1498.50 in the marketing division and Rs. 995.25 Rs. 1348.60 in the refinery division.
Those scales compare favourably with the pay scales of similar employees 271 in the Hindustan Petroleum Corporation Limited (Caltex) and Indian oil Corporation Limited.
But the pay scales of junior grade clerical employees of the respondent company Bharat Petroleum Corporation Limited are better in the refinery division with which we are concerned in this appeal then those in the Hindustan Petroleum Corporation Limited, for the pay scales in the respondent Company are Rs. 924.23 Rs.
1597.17 in the marketing division as on 1.3.1980 and Rs. 1093.92 Rs.
1809.96 in the refinery division at Bombay as on 1.4.1980.
In the comparative statement there is a note that the grade of Rs.1093.92 Rs.
1809.96 is the lowest grade in the clerical cadre as per the subsisting settlement and that individuals have, however, not yet been fitted that grade because of various disputes.
There can be no doubt that once the individuals are fitted in that grade they will be entitled to payment according to that scale as from 1.4.1980.
So far as senior grade clerical employees are concerned the scales of pay are Rs. 1012.50 Rs.1727.50 in the marketing division and Rs.1359.56 Rs. 2040.20 in the refinery division of the Hindustan petroleum Corporation Limited and Rs. 1215 Rs. 220 in the marketing division and Rs. 1212 .(for those who joined service after 8.8.1978 Rs. 2126 (for those who joined service prior to 8.8.1978).
These scales of pay compare favourably with the scales of pay in the Indian oil Corporation Limited.
But the sales of pay of the respondent company are much better as they are Rs. 1171.91 Rs.
1960.59 in the marketing division as on 1.3.1980 and Rs. 1352.30 Rs.
2510.46 in the refinery division at Bombay has on 1.4.1980.
Thus it is seen that the pay scales of junior grade clerical employees and senior grade clerical employees of the Company in the refinery division at Bombay, namely, Rs. 1093.92 Rs. 1809.96 as on 1.3.1980 and Rs. 1352.30 Rs.
2510.46 as on 1.4.1980 compare favourably with the pay scales of junior grade clerical employees in the marketing division of the Company at Bombay, namely, Rs. 924.23 Rs.
1597.17 and Rs. 1171.91 Rs.
1960.59 as on 1.3.1980 respectively.
Therefore, the Company 's contention before the Tribunal that higher pay scales were fixed for the clerical employees in the refinery division at Bombay in the settlement dated 31.10.1973 in view of their agreement to continue the age of retirement at 55 years is not without substance as stated by the Tribunal in its judgment.
In this Court also Mr. Pai submitted that higher pay scales have been fixed for the clerical employees in the refinery division of the Company at Bombay taking into consideration that there is no pension scheme for them and their agreement to continue the age of retirement as 58 whereas the retirement age for the clerical employees of the marketing division at Bombay for 272 whom there is a pension scheme in regard to those who entered service prior to the date of nationalisation is 58.
The learned counsel fairly conceded that it could not be stated with certainty that the difference in the pay scales of the clerical employees in the refinery division and marketing division at Bombay fully takes care of the absence of a pension scheme for the clerical employees of the refinery division.
It was not contended by Mr. Ramamurthi that the workload of the clerical employees in the refinery division is greater than that of the clerical employees in the marketing division of the Company at Bombay.
Therefore, in considering the absence of a pension scheme for the clerical employees of the Company in the refinery division one has to take note of the fact that the pay scales of those employees are more advantageous and compare favourably with the pay scales of clerical employees of the Company in the marketing division at Bombay.
The trend strongly relied upon by Mr. Ramamurthi has no doubt to be taken into account for fixing the age of retirement of the employees.
But according to the decision in Burmah shell (Delhi region) case (supra) referred to above, it is only one of the factors which have to be taken into account in fixing the age of retirement though in that decision it has been stated to be the most important factor, (Several other factors) are mentioned in this Court 's judgment in Guest Keen Williams Private Limited vs Sterling and others (supra) and they are the nature of work assigned to the employees, the wage structure of the employees, the retirement benefit and other amenities available to the employees, the nature of climate where the employees work and the age of superannuation fixed in comparable industries in the region.
The employees in this case should have placed the other materials also before the Tribunal for justifying their claim for raising the age of retirement from 55 years to 60 years.
They have not placed any of those factors before the Tribunal apart from relying upon the trend mentioned above.
The trend must, undoubtedly, be in comparable industries.
The employees in this case have not placed any material on record to show that there is any trend in the refinery division of any other oil company in the Bombay region to fix the age of retirement of clerical employees at 60 years.
They have relied upon the trend generally and not in any comparable industry.
There is no evidence to show that there is any other refinery in the Bombay region than that of the company.
On the other hand, the Company has placed before this Court a comparative statement regarding the age of retirement of clerical employees in all the refineries in this country.
That statement produced with 273 the counter affidavit filed in the Special Leave Petition shows that the age of retirement is 60 years only in the marketing division of the Indian oil Corporation Limited, that it is 58 years in the refinery division of that Corporation and that in all the other Corporations including the respondent Company after the age of retirement was raised to 58 years from 55 years by the Tribunal it is 58 years both in the marketing division and the refinery division.
Thus, the trend in the refinery divisions of the Corporation throughout the country is to fix the age of retirement of the clerical employees at 58 years.
It is not possible to accept the appellants ' contention that the age of retirement should have been raised by the Tribunal to 60 years on the basis solely of the "trend in the Bombay region".
There is nothing in the award of the Tribunal to show that the employees contended before it that the "trend in the Bombay region" heavily relied upon by them, could be general in nature and not in comparable industries in the region. ' No such argument was advanced even in this Court by Mr. Ramamurthi, on behalf of the appellants.
Consequently the Company did not have any opportunity of meeting any such contention that the trend in the region need not be in comparable industries (not necessarily similar industries) but may be general and is yet binding on the Company.
It is significant to note that the clerical employees in the marketing division of the Company at Bombay have till now not raised any demand for raising their age of retirement to 60 years from 58 years.
Therefore, on the question of trend also it is seen that the employees concerned have not placed any material on record to hold that in their case the trend should be taken as being towards fixing the age of retirement at 60 years.
The Tribunal has taken all factors into consideration including the absence of a pension scheme for the employees in question except the fact that there is a pension scheme for the clerical employees in the marketing division of the Company at Bombay who had joined service prior to the date of nationalisation in raising the age of retirement of the Company 's clerical employees in the refinery division at Bombay to 58 years from 55 years at par with the age of retirement of the clerical employees in the Company 's marketing division at Bombay.
Even under the Tribunal 's award challenged in this appeal the employees concerned are better placed than their counter parts in the marketing division who have joined service after the date of nationalisation of oil companies in regard to wage scales.
There is no material on record to show the quantum of disadvantage to which the employees in question are subjected by the absence of a pension scheme compared with the section of clerical employees of the Company 's marketing division at Bombay 274 who have the benefit of a pension scheme in addition to gratuity and provident fund benefits to which alone the employees concerned in this appeal are entitled as retirement benefits.
In these circumstances, there is no satisfactory reason for interfering with the Tribunal 's award raising the age of retirement of the clerical employees of the Company 's refinery division at Bombay from 55 years to 58 years at par with the age of retirement of the clerical employees of the Company 's marketing division at Bombay and declining to raise it to 60 years as demanded by the employees.
The appeal accordingly fails and is dismissed but without costs.
H.S.K. Appeal allowed.

dataset_name: IN-Abs

summary:
An industrial dispute with regard to the raising of the age of retirement of the clerical staff employed in the Refinery Division of the respondent oil Company at Bombay from 55 to 60 years was referred to the Industrial Tribunal.
The workmen contended that there was a trend in the Bombay region to fix the age of retirement of clerical employees at 60 years and in the comparable concerns as well as in the Marketing Division of the Company itself the age of the clerical employees was above 55 years.
The Company contended that the wage scales of their clerical employees were far better than those of similar categories of employees in comparable concerns and that the company took a generous view in the settlement dated 31 10 1973 and arrived at a package deal and revised the benefits of the employees taking into consideration the agreement of the employees to continue the age of retirement of the clerical employees of the Refinery Division at 55 years.
Neither party led any oral evidence but filed their respective comparative statements.
The Tribunal found as a fact that the wage scales of the Company were not much better than the wage scales of other comparable concerns.
The Tribunal also noticed that the age of retirement of the clerical staff of the Company in its Marketing Division both at Bombay and other places was fixed at 58 years.
But the Tribunal found that the Company 's contention regarding the settlement being a package deal in regard even to the age of retirement after taking other benefits into consideration was not without substance and observed that it was, however, not sufficient to reject the workmen 's demand in toto and that it had to be taken into account while considering the extent to which the age of retirement should be raised.
Having regard to the circumstances of the case and in the interest of industrial harmony, the Tribunal raised the age of retirement to 58 years only.
In appeal to this Court the workmen relied on the 'trend ' in the Bombay region while the Company relied on the position in other oil Companies.
252 Allowing the appeal and fixing the age of retirement at 60 years, by majority.
HELD (Per Desai and Chinnappa Reddy, JJ.) In fixing the age of superannuation, the most important factor that has to be taken into consideration is the trend in a particular area.
From the various decisions rendered by this Court and by the Tribunals, it is obvious that in the early sixties the trend in the Bombay region was to raise the age of superannuation to 60 years.
Industrial and labour conditions do not remain stagnant despite the passage of time.
Industrial labour relations need revision from time to time to fit and suit changing conditions.
That there was an upward trend to raise the age of retirement to 60 in the early sixties may not necessarily mean that the same trend has continued till today.
[259 H; 260 D E; 260 G H] Guest, Keen, Willians Private Ltd. vs P. J. Sterling & Ors. ; ; Dunlop Rubber Company Limited vs Workmen & Ors. ; ; Imperial Chemical Industries (India) Pvt. Ltd. vs Workmen ; ; British Paints (India) Ltd. vs Its workmen [1961] 2 S.C.R. 523; G.M. Talang vs Shaw Wallace & Co. ; Burmah Shell Oil Storage & Distributing Company of India Ltd. vs Their Workmen [1970] I LLJ 363, referred to.
In the instant case, the Company did not plead that there was any reversal of the trend nor did the Company urge that there was any such reversal of the trend.
On the other hand, it may very well be said that there has been much progress in the last two decades in the matter of better living conditions and availability of medical and health facilities and, therefore, a further raise of the age of retirement may be considered necessary and justified.
[260 H; 261 A] In the instant case while raising the retirement age of the clerical staff of the Refinery Division to 58 years instead of 60 years since the retirement age of the clerical staff of the Marketing Division of the Company had been fixed at 58 years, the Tribunal fell into a serious error in failing to notice the relevant and outstanding fact that the clerical staff of the Marketing Division have a pension scheme while the clerical staff of the Refinery Division have no such scheme.
The general terminal benefits on attaining the age of superannuation are pension, gratuity and provident fund.
It is not in dispute that while the clerical staff of the Marketing Division have all the three benefits, the clerical staff of the Refinery Division are not entitled to any pension.
This must necessarily have an impact on the raising of their retirement age.
On the material available the Court thinks that the retirement age in the case of clerical staff of the Refinery Division should be fixed at 60 years.
[262 E H] In applying the region cum industry formula the emphasis to be placed on region or industry depends upon varying factors.
Where there are no comparable industries in the region, the regional aspect of the region cum industry formula must be given precedence.
G] Greaves Cotton and Co. Ltd. vs Their Workmen 1964 (I) L.L.J. 342; Workmen of Hindustan Motors vs Hindustan Motors 1962 (II) L.L.J. 352; 253 French Motor Car Company vs Their Workmen 1962 (II) L.L.J. 744; Workmen of Orient Paper Mills Ltd. vs Orient Paper Mills Ltd. 1969 (II) L.L.J. 398 referred to: It is observed that nowadays, because of better conditions of living and availability of medical and health facilities, the average span of life has increased and a person between 55 and 60 years of age is alert, active, hale and healthy may be said to be at the prime of his life.
That is also the time when he has to meet several financial commitments and demands.
To retire him at that age may mean virtually throwing him to the wolves.
Can the nation afford to throw away the knowledge and experience of these people by retiring them when they are still capable of turning out some years of good work and have on its hand several families unable to fully support themselves ? On the other hand, can the nation afford to have an army of unemployed youngmen necessarily leading bitter and frustrated lives by allowing them to fritter away their energies in unhealthy pursuits to which they may be tempted ? But then arises the broader question, is the retirement of men of experience at an age when they are still useful to the community the proper solution to the problem of unemployment among the young ? Is not the solution the creation of greater employment opportunities, by increasing production and its modes ? All these questions are difficult to answer and require deep investigation, research and study.
[261 D H] (Per Varadarajan, J.
Though the trend in a particular area is the most important factor to be taken into account for fixing the age of retirement of employees, it is only one of the several factors like the nature of work assigned to the employees, the wage structure of the employees, the retirement benefits and other amenities available to the employees, the nature of climate where the employees work and the age of superannuation fixed in comparable industries in the region.
Moreover, the trend must undoubtedly be in comparable industries.
[272 D E; F] Guest Keen Williams Private Ltd. vs Sterling and Ors.
1959 (II) L.L.J. 405; Burmah Shell (Delhi region) (1971) (I) L.L.J. 363 referred to.
In the present case, the employees have not placed any material on those factors before the Tribunal apart from relying upon the trend in the Bombay region.
They have also not placed any material on record to show that there is any trend in the Refinery Division of any other oil company in the Bombay region to fix the age of retirement of clerical employees at 60 years.
They have relied upon the trend generally and not in any comparable industry.
There is no evidence to show that there is any other Refinery in the Bombay region than that of the Company.
From the comparative statements filed by the Company, it appears that the trend in the Refinery Division of the Company throughout the country is to fix the age of retirement of the clerical employees at 58 years.
There is nothing in the award of the Tribunal to show that the employees contended before it that the "trend in the Bombay region" heavily relied upon by them, could be general in nature and not in comparable industries in the region.
[272 F; G; 273 B C] 254 Unfortunately, very limited material is available on record for arriving at a decision in this case.
The comparative statements filed by the Company show that the pay scales of junior grade clerical employees in the Refinery Division of the respondent company are better than those in another oil company.
The pay scales of junior grade clerical employees and senior grade clerical employees of the company in the Refinery Division at Bombay compare favourably with pay scales of junior grade clerical employees and senior grade clerical employees in the Marketing Division of the Company at Bombay Therefore, in considering the absence of a pension scheme for the clerical employees of the Company in the Refinery Division one has to take note of the fact that the pay scales of those employees are more advantageous and compare favourably with the pay scales of clerical employees of the company in the Marketing Division at Bombay.
There is no material on record to show the quantum of disadvantage to which the employees in question are subjected by the absence of a pension scheme compared with the section of clerical employees of the Company 's Marketing Division at Bombay who have the benefit of a pension scheme in addition to gratuity and provident fund benefits to which alone the employees concerned in this appeal are entitled as retirement benefits.
In those circumstances, there is no satisfactory reason for interfering with the Tribunal 's award raising the age of retirement of the clerical employees of the Company 's Refinery Division at Bombay from 55 years to 58 years.
[270 A; 271 A; E F; 272 B C; 273 H; 274 A B]