judgement:
Appeal No. 587 of 1962.
Appeal by special leave from the judgment and order dated April 12, 1961, of the Bombay High Court in Civil Revision Application No. 441 of 1961.
232 S.V. Gupte, Additional Solicitor General of India and R.H. Dhebar, for the appellant.
S.G. Patwardhan and A.G. Ratnaparkhi, for respondent No. 1.
The Judgment of the Court was delivered by RAGHUBAR DAYAL J.
This appeal, by special leave, raises the question whether the amount of interest decreed for the period subsequent to the institution of a suit comes within the expression 'amount or value of the subject matter in dispute ' in article 1 of Schedule 1 of the Bombay Court fees Act, 1959, hereinafter called the Act, for purposes of court fee payable on the memorandum of appeal.
The plaintiff respondent No. 1 instituted Special Suit No. 5 of 1957 in the Court of the Civil Judge (Senior Division) at Ahmedabad to recover Rs.13,205 on account of the principal lent to defendant No. 7 and interest up to the date of the suit at the rate of 9 % per annum.
On July 18, 1960, his claim was decreed in a sum of Rs. 13,033 6 6 with future interest from the date of suit till realization at 40% per annum on a sum of Rs. 10, 120.
Defendant No. 7 appealed to the High Court against the decree.
In the memorandum of appeal, defendant No. 7 valued the claim for purposes of jurisdiction and court fee at Rs. 13,033 6 6 and his grounds Nos. 1 and 48 of appeal were as follows: 1.
That the lower Court erred in decreeing the plaintiff 's suit.
That the decree is otherwise erroneous, unjust and illegal and therefore deserves to be set aside.
" The remaining 46 grounds related to the merits of the plaintiff 's claim and did not deal with the correctness of the trial Court awarding future pendente site interest on the rate at which it was to be calculated.
The Taxing Officer was of opinion that the appeal was against the whole decree and that the amount of value of the subject matter in dispute for purposes 233 of court fee was Rs. 14,036.
80nP. as the amount of interest from the date of the suit till the date of the decree on Rs. 10,120 came to Rs. 1,033.40 nP. and it bad been conceded by the counsel for the defendant appellant that the subject matter of the appeal was the decree passed by the trial Court.
He therefore directed the defendant appellant to pay the deficit court fee of Rs. 70 on the memorandum of appeal and to amend the claim accordingly.
The defendant appellant then filed a revision to the High Court under section 5(2) of the Act.
His objection was upheld by the learned Judge who expressed the view: "The subject matter in appeal is the real matter in dispute between the parties and not something which must stand or fall with the decision oil it.
In other words, it must mean the right which is in dispute between the parties.
" He accordingly set aside the order of the Taxing Officer and held that the amount of court fee paid on the memorandum of appeal was the proper court fee.
The State of Maharashtra has filed this appeal by special leave against this order.
Mr. Gupta, for the appellant State, contends that the view expressed by the learned Judge is not correct and mainly relies on the construction put by Courts on the expression ' value or subject matter in dispute ' in the relevant provisions relating to the High Court 's giving leave to appeal to the Privy Council.
In Gooroo persad Khoond vs Juggutchunder (1) the Judicial Committee said, in connection with the requirements of the directions in the Order in Council of April 10, 1938, with respect to the conditions for granting leave to appeal to the Privy Council, that leave to appeal was to be given in cases where the value of the matter in dispute in the appeal amounted to the specified sum of Rs. 10,000 and that in (1) 8 M.I.A. 166. 234 determining such value, the amount of interest decreed up to the date of the decree be included to the amount of the principal.
Doorga Doss Chowdry vs Ramanauth Chowdry (1) is an authority for the proposition that the costs of a suit are no part of the subject matter in dispute.
Their Lordships of the Privy Council said: sum claimed, it would be in the power of every litigant, by swelling the costs, to bring any suit up to the appealable value.
" It may also be said that a litigant 's conduct may lead to a protracted trial and consequently to the increase in the amount of pendente lite interest which may raise the value of the subject matter in dispute in appeal to the appealable value.
We do not consider it correct that the expression in the Act be construed in the light of the construction placed on a similar expression for the purposes of considering whether the case had come within the rule allowing the High Courts to give leave for appeal to the Privy Council.
The Act is a taxing statute and its provisions therefore have to be construed strictly, in favour of the subject litigant.
The other provisions are for the purpose of allowing the party feeling aggrieved against the decision of the High Court to take up his case to the next higher Court.
the Privy Council and therefore the relevant provisions in that regard had to be given a liberal construction.
In the present case we have to construe the expression 'value of the subject matter in dispute in appeal ' for the purposes of determining the amount of Court fee due on a memorandum of appeal and not for determining such valuation for preferring an appeal to this Court.
The relevant provision governing the question of court fee to be paid on the memorandum of appeal filed in a Civil Court is contained in article 1 of Sche (1)8 M.I.A. 262.
235 dule 1 of the Act.
it is to be paid ad valorem according to the amount or value of the subject matter in dispute.
The rates applicable with respect to the various amounts are mentioned in the article.
The maximum amount of court fee, however, is Rs. 15,000.
The amount of court fee payable, therefore, depends on the amount or value of the subject matter in dispute in appeal.
The defendant appellant valued his claim at Rs. 13,033 6 6 and paid the requisite court fee on that amount.
It is obvious therefore that he disputes in appeal that part of the decree which awarded Rs. 13,033 6 6 against him on account of principal and interest due up to the date of the institution of the suit.
He did not dispute, according to the value of his claim, the amount of interest which could be found on calculation for the period between the date of the suit and the date of the decree at 4% per annum on a sum of Rs. 10,120 as had been awarded under the decree.
Whether his appeal is competent or not without his including this amount in his claim in appeal, is a question different from that relating to the value of the subject matter in dispute in appeal.
He does not dispute the decree for that amount and therefore the Court has not to decide about it and so this amount cannot be included in the amount of the subject matter in dispute in appeal covered by the relevant expression.
None of his grounds of appeal refers specifically to this amount of interest between the date of the suit and the date of the decree.
This makes it further plain that he does not question the propriety of awarding of future interest or the rate at which it was awarded or even the amount on which it could be awarded.
It is not possible to say, in these circumstances, that the value of the subject matter in dispute in the appeal must include this amount of interest between the date of the suit and the date of the decree.
Mr. Gupta has rightly conceded that it is well settled that the plaintiff has to value his appeal against the dismissal of his suit on the amount of the claim he had made in the plaint and has not to include 236 the interest due on the amount claimed up to the date of instituting the appeal, that the defendant has not to include that amount of future interest subsequent to the date of the decree till the institution of the appeal in the valuation of the appeal for the purposes of court fee and that no court fee is to be paid on the amount of costs decreed in the suit when the party aggrieved appeals against the decree.
On what principle are these amounts not treated as forming part of the value of the subject matter in dispute in appeal? Such value is to be determined on the substantial allegation in the plaint or from the pleas in the memorandum of appeal with respect to the points in dispute between the parties and sought to be determined by the Court.
Such are necessarily the points affecting the rights of the parties sought to be adjudicated by the Court.
Claims not based on any asserted right but dependent on the decision of the disputed right and reliefs in regard to which are in the discretion of the Court do not come within the purview of the expression 'subject matter in dispute in plaint or memo of appeal '.
There appears no good reason to make a distinction between the decreed amount of costs and that of pendente lite interest for the purpose of determining the amount of the subject matter in dispute in appeal.
It is true that costs of suit arise independently of the claim and are really those which are incurred by the plaintiff while the decree for the amount of pendente lite interest is directly related to the plaintiff 's claim though its award is within the discretion of the Court, but this will not justify the distinction.
The costs too, and particularly the costs on account of court fee and counsel 's fee, arise directly on account of the claim put forward in Court.
The reason really is that it is the value of the right claimed in the suit or appeal which is covered by the expression 'amount or value of subject matter in dispute in article 1, Schedule 1, of the Act and that the plaintiff ' has no right to get any of these amounts from the defendant though the Court may, in its discretion, allow future interest 237 and costs according to the circumstances of the suit in view of sections 34 and 35 C.P.C.
This principle equally applies to the non inclusion of the decreed amount ' of pendente lite interest in evaluating the subjectmatter in dispute in appeal as that too is awarded in the exercise of its discretion by the Court an the plaintiff has no right or claim for that amount against ' the defendant.
It is obvious that if the defendant appellant succeeds in establishing to the satisfaction of the appellate Court that the decree for the principal and interest up to the date of the suit is bad in whole or in part, that will itself lead the appellate Court to exercise its discretion with respect to the amount of costs and future interest in such a way that if the plaintiff 's claim is dismissed in too, he will not be awarded any future interest or any costs of the suit or appeal and that in case his claim succeeds in part, the amount of future interest and costs decreed in his favour would be appropriately modified by the appellate Court.
The defendant appellant has therefore no reason to appeal against the decree for costs or the decree for future interest unless he disputes those amounts wholly or partially for certain reasons.
If he disputes expressly the propriety or correctness of the decree with respect to the costs or pendente lite interest independently of the claim to the subject matter in the Trial Court he will have to pay court fee on the amounts challenged as in that case he does dispute those amounts in appeal and therefore those amounts do come within the expression 'value of the subjectmatter in dispute in appeal '.
This has been the basis of the various decisions of the Courts in which court fee has been demanded on the amount of costs or future interest.
In Mitthu Lal vs Chameli (1) it was held that no courtfee was to be paid on interest pendente lite granted by the lower Court unless the awarding of it was specifically challenged in appeal.
It was said at p. 76: 57 All.
238 "Interest pendente lite is awarded under section 34 of the Civil Procedure Code.
The Court may award it whether the plaintiff claims it or not.
In this respect the court 's power stands on the same footing as its power to award costs to a successful party.
It is well settled rule that no court fee is payable on the amount of costs awarded by a decree appealed from, if no ground is specifically directed against the award of costs. . . . .
The same principle is applicable to interest pendente lite which the Court may award in the exercise of its power under section 34.
On a proper reading of the appellant 's grounds of appeal in the lower appellate court we are satisfied that the subjectmatter of his appeal to that court was the principal amount and interest up to the date of the suit." In Keolapati, Mst. vs B.N. Varma "I it was held that unless the appellant expressly challenges the award of future interest, no court fee is to be paid on the amount of interest accruing from the date of the suit till the date of the filing of the appeal.
In Ashutosh vs Satindra Kumar (2) it was said at at p. 382: "Costs are not regarded as being any part of a subject matter in dispute either in the suit or in the appeal.
In the appeal, the appellant does not in such an event really dispute the order as to costs for it is the natural order that is ordinarily made following the decision as to the main subject matter in dispute and if he himself succeeds in the appeal in regard to the main subject matter, automatically he will expect to succeed with regard to the costs.
" We therefore hold that the amount of pendente lite interest decreed is not to be included in the 'amount or value of the subject matter in dispute in appeal ' for the purposes of article 1 of Schedule 1 of the Act unless the appellant specifically challenges the cor (1) I.L.R. 12 Luck.
(2) 239 rectness of the decree for the amount of interest pendente lite independently of the claim to set aside that decree.
The appellant here has not specifically challenged the decree in that respect and therefore the High Court is right in holding the memorandum of appeal to be, sufficiently stamped.
The appeal T. is therefore dismissed with costs.
Appeal dismissed.

summary/full:
The plaintiff respondent No. 1 instituted a suit for recovery of the amount lent to the defendant with interest upto the date of the suit.
His claim was decreed in a sum of Rs. 13,033 6 6 with future interest from the date of suit till realisation at 4 % per annum on a sum of Rs.10,120.
Against this decree the defendant appealed to the High Court and valued the appeal at Rs. 13,033 6 6 and paid the requisite court fee on that amount.
All his grounds of appeal related to the merits of the plaintiff 's claims and did not deal with the correctness of the trial court awarding future pendente lite interest on the rate at which it was to be calculated.
The Taxing Officer directed the defendant to pay the deficit court fee of Rs. 70 on the memorandum of appeal as he was of the opinion that the appeal was against the whole decree and that the amount of value of the subject matter in dispute for purpose of court fee was Rs. 14,036.80nP. as the amount of interest from the date of the suit till the date of the decree on Rs. 10,120 came to Rs. 1,033.40nP. 231 The defendant challenged this order in revision before the High Court under section 5(2) of the Bombay Court fees Act, 1959.
The High Court set aside the order of the Taxing Officer and the learned Judge expressed the view: "The subjectmatter in appeal is the real matter in dispute between the parties and not something which must stand or fall with the decision on it.
In other words, it must mean the right which is in dispute between the parties".
In this Court the appellant State challenged the correctness of the said view of the High Court and relied mainly on the construction put by courts on expression " value or subject matter in dispute," in the relevant provisions relating to the High Court 's giving leave to appeal to the Privy Council.
Held:(i) That the expression 'amount or value of the subjectmatter in dispute ' in article 1 of Schedule 1 of the Bombay Court fees Act, cannot be construed in the light of the construction placed on a similar expression for the purposes of considering whether the case had come within the rule allowing the High Courts to give leave for appeal to the Privy Council.
The Act is a taxing statute and its provisions have to be construed strictly, in favour of the subject litigant.
Gooroopersad Khoond vs Juggutchunder, 8 M.I.A. 166 and Doorga Doss Chowdry vs Ramanauth Chowdry, 8 M.I.A. 262, held in applicable.
(ii)Claims not based on any asserted right but dependent on the decision of the disputed right and reliefs in regard to which are in the discretion of the court do not come within the purview of the expression 'subject matter in dispute in plaint or memo of appeal '.
(iii)The amount of pendente lite interest decreed is not to be included in the 'amount or value of the subject matter in dispute in appeal ' for the purposes of article 1 of Sch. 1 of the Act unless the appellant specifically challenges the correctness of the decree for the amount of interest pendente lite independently of the claim to set aside that decree.
In the present case, the decree in that respect was not specifically challenged and therefore the view of the High Court must be held to be correct.
Mitthu Lal vs Chameli, 57 All.
7 1, Keolapati Mst.
vs B.N. Varma, I.L.R. 12 Luck.
466 and Ashutosh vs Satindra Kumar, 54 C.W.N.380, referred to.


judgement:
Appeals Nos. 272 to 280 of 1962.
Appeals by special leave from the Award dated June 3, 1960, in reference (IT) Nos. 84 and 251 of 1959, June 15, 1960, in References (IT) Nos. 112 and 252 of 1959, June 16, 1960, in References (IT) Nos. 121 of 1959, and 7 of 1960, June 15, 1960, in References (IT) Nos. 123, 180 and 236 of 1959 of the Industrial Tribunal, Maharashtra at Bombay.
S.V. Gupte, Additional Solicitor General N. V. Phadke, J. B. Dadachanji, O. C. Mathur and Ravinder Narain for the appellants (in all the appeals).
M.C. Setalvad, K.T. Sule, Madan G. Phadnis, Jitendra Sharma and Janardan Sharma, for the respondents (in C.A. No. 272/1962).
K.T. Sule, Madan G. Phadnis, Jitendra Sharma and Janardan Sharma, for the respondents (in C. As.
273 280/62).
November 14, 1963.
The Judgment of the Court was delivered by WANCHOO J.
These nine appeals by special leave arise out of the awards of the Industrial Tribunal, Bombay and will be dealt with together.
There were disputes between the four appellants companies and the respondents, their workmen, which were referred for adjudication to the Industrial Tribunal by nine reference orders on various dates between April to December 1959.
The main dispute which gave rise to the references was with respect to wages, dearness allowance and gratuity.
The references included other items also but we are not concerned in the present appeals with those items.
Of the four companies who are the appellants before 364 us, Greaves Cotton and Co., is the first company and its main activity is to invest money in manufacturing concerns.
The second company is Greaves Cotton and Crompton Parkinson Private Limited and its main business is distribution of the products of a manufacturing concern known as Crompton Parkinson (Works) India Limited and service and repair to the said products at its workshop.
The third company is Konyon Greaves Private Limited and its main business is to manufacture high grade interstranded ropes for the textile industry.
The last company is Ruston and Hornsby (India) Private Limited and its main business is to manufacture oil engines and pumps.
The last three companies are controlled by the first company, namely Greaves Cotton and Co., in one way or the other and that is how the main dispute relating to wages and dearness allowance was dealt with together by the tribunal.
There were two references each with respect to the first three companies and three references with respect to Ruston and Hornsby Private Limited; and that is how there are nine appeals before us.
There were nine awards, though the main award dealing with the main dispute relating to wages and dearness allowance was common.
It appears that wages and dearness allowance prevalent in the four companies had been continuing since 1950 when the last award was made between the parties.
It may also be stated that there was no .serious dispute before the Tribunal as to the financial capacity of the companies and further, as the first company controls the other three companies, the wages and dearness allowance are the same so far as the clerical and subordinate staff are concerned.
The same appears to be the case with respect to factory workmen.
The Tribunal dealt with clerical and subordinate staff separately from the factory workmen.
So far as the clerical and subordinate staff are concerned, the Tribunal, after a comparison of wages and dearness allowance prevalent in the four companies with wages 365 and dearness allowance prevalent in comparable concerns revised them.
Further it provided bow the clerical and subordinate staff would be fitted in the new scales after making certain adjustments and in that connection it gave one to three extra increments depending upon length of service between 1950 to 1959.
Finally, it ordered that the award would have effect from April 1, 1959, which was a week before the first reference was made with respect to the first company.
The Tribunal then dealt with the case of the factory workmen and prescribed certain rates of wages.
Further it gave the same dearness allowance to the factory workmen as to the clerical and subordinate staff and directed adjustments also on the same basis.
Finally it considered the question of gratuity and the main provision in that respect was that the maximum gratuity allowable would be upto 20 months and a provision.
was also made to the effect that if an employee was dismissed or discharged for misconduct which caused financial loss to the employer, gratuity to the extent of that loss only will not be paid to the employee concerned.
The main attack of the appellants is on the award as regards wages and dearness allowance.
It is urged that the industry cum region formula, which is the basis for fixation of wages and dearness allowance has not been properly applied by the Tribunal and it had been carried away by the recommendations of the tripartite conference which suggested need based minimum wages.
It is also urged that whatever comparison was made was with concerns which were not comparable and the wages awarded were even higher than those prevalent in any comparable concern.
It is also urged that the Tribunal did not consider the total effect of the increase it was granting in basic wage and dearness allowance together as it should have done, for the purpose of finding out whether the total pay packet in the appellants ' concerns can bear comparison with the total pay packet of the concerns with which the Tribunal had compared the appellants ' concerns.
In this connection it is urged that in flying 366 scales of wages the Tribunal increased the maximum and the minimum and the annual rate of increment and decreased the span of years in which the maximum would be reached.
Adjustments made by the Tribunal are also attacked and so is the order making the award enforceable from April 1, 1959.
As to the factory workmen it is urged that the Tribunal made no attempt to make a comparison with wages prevalent even in what it considered to be comparable concerns.
Lastly it is urged that the Tribunal created a new category of factory workmen called higher unskilled which was not demanded and which in any case did not exist in any comparable concern.
The first question therefore which falls for decision is whether the Tribunal went wrong in not following the industry cum region principle and in leaning on the recommendations of the Tripartite Conference.
It is true that the Tribunal begins its award with a reference to the recommendations of the Tripartite Conference wherein the need based minimum wage was evolved.
It is urged that this disposed the Tribunal to pitch wage scales too high.
It is however clear from the award that though the Tribunal discussed the recommendations of the Tripartite Conference at some length, when it actually came to make the award it did not follow those recommendations.
The reason why it referred to those recommendations was that the respondents workmen based their claim on them and wanted that the Tribunal should fix wagescales accordingly.
But the Tribunal 's conclusion was that it was not feasible to do so, though looking at the financial stability of the appellants, emoluments needed upgrading.
It then went on to consider the wages prevalent in comparable concerns and finally fixed wages for the appellants on the basis of wages prevalent in such concerns.
Though therefore the recommendations of the Tripartite Conference are referred to in the Tribunal 's award, its final decision is not based on them and what the Tribunal has done is to make comparisons with what it considered comparable concerns so far as clerical and subordi 367 nate staff are concerned.
We are therefore not prepared to say that reference to the recommendations of the Tripartite Conference in the opening part of the award was irrelevant and therefore the rest of the award must be held to be vitiated on that ground alone.
The main contention of the appellants however is that the tribunal has gone wrong in applying the industry cum region formula which is the basis for fixing wages and dearness and has made comparison with concerns which are not comparable.
It is also urged that the Tribunal has relied more on the region aspect of the industry cum region formula and not on the industry aspect when dealing with clerical and subordinate staff and in this it went wrong.
Reference in this connection is made to two decisions of this Court, namely, Workmen of Hindusthan Motors vs Hindusthan Motors( ',) and French Motor Car Company vs Their Workman (2 ) and it is emphasis that the principles laid down in Hindusthan Motors ' case(") were more applicable to the present case than the principles laid down in the French Motor Car Co. 's case(2).
In the Hindusthan Motors case(1), this Court observed that it was ordinarily desirable to have as much uniformity as possible in the wage scales of different concerns of the same industry working in the same region, as this puts similar industries more or less on an equal footing in their production struggle.
This Court therefore applied the wage scales awarded by the Third Major Engineering Tribunal in Bengal in the case of Hindusthan Motors also.
It is urged that the Tribunal should have taken into account comparable concerns in the same industry and provided wage scales on the same lines so that, so far as manufacturing concerns in the present appeals are concerned, there will be equality in the matter of competition.
In the French Motor Car Co. 's case(2) however this Court held so far as clerical staff and subordinate staff are concerned that it may be possible to take into account (1) (2) [1963] Supp. 368 even those concerns which are engaged in different lines of business for the work of clerical and subordinate staff is more or less the same in all kinds of concerns.
We are of opinion that there is no inconsistency as urged in the principles laid down in these two cases.
As we have already said the basis of fixation of wages and dearness allowance is industry cum region.
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 Co. 's case() where that 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 is that in applying the industry cum region formula for fixing wage scales the Tribunal should lay stress on the industry part of the 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 (1) [1963] Supp. 369 assumes importance particularly in the case of clerical and subordinate staff, for, as pointed out in the French Motor Car Co. 's case,(" there is not much difference in the work of this class of employees in different industries.
In the present cases it does appear that the Tribunal has leaned more on the region part of the industry cum region formula and less on the industry part.
But we think that it cannot be said that the Tribunal was wrong in doing so for two reasons.
In the first place these four companies are not engaged in the same line of industry; but on account of certain circumstances, namely, that Greaves Cotton and Co. is the controlling company of the other three, it has been usual to keep the same scales for clerical and subordinate staff in all these concerns.
In the second place, it is not clear, as was clear in the Hindusthan Motors case(" that there are a large number of comparable concerns in the same region.
As a matter of fact the main company out of these four is Greaves Cotton and Co. Limited, which is in the main an investment and financial company and the Tribunal was therefore right in taking for comparison such companies as would stand comparison with the main company in the present appeals (namely, Greaves Cotton & Co).
Both parties filed scales of wages prevalent in what they considered to be comparable concerns and it is clear from the documents filed that some of the comparable concerns were the same in the documents filed by the two parties.
On the whole therefore we do not think the Tribunal was wrong in putting emphasis on the region aspect of the industry cum region formula in the present case insofar as clerical and subordinate staff was concerned.
, for the four companies before us do not belong to the same industry and Greaves Cotton and Co. controls the other three.
Considering therefore the standing of the main company (namely, Greaves Cotton and Co. Ltd.), it was not improper for the Tribunal in the present cases to rely on the comparable concerns (1) [1963] Supp. 1/SCI/64 24 (2) 370 which were cited on behalf of the respondents, some of which were common with the comparable concerns cited on behalf of the appellants.
What the Tribunal lid thereafter was to consider the minimum for various categories of clerical and subordinate staff prevalent in these comparable concerns and the maximum prevalent therein at id also the annual increments and the span of years in which.
the maximum would be reached.
The Tribunal then went on to fix scales for various categories of clerical and subordinate staff of the appellants which were in between the scales found in various concerns.
Further, as the financial capacity of the appellants was not disputed, the Tribunal pitched these scales nearer the highest scales taking into account the fact that for nine years after 1950 there had been no increase in wage scales.
We do not think therefore that the wage sales fixed by the Tribunal, learning as it did, on the region aspect of the industry cum region formula, for the clerical and subordinate staff can be successfully assailed by the appellants.
It has however been urged that the Tribunal overlooked considering what would be the total wage packet including basic wages and dearness allowance and that has made the total wages (i.e. basic wage and dearness allowance) fixed by the Tribunal much higher in the case of the appellants than in comparable concerns which it took into account.
It is true that the Tribunal has not specifically considered what the total wage packet would be on the basis of the scales of wages and dearness allowance fixed by it as it should have done; but considering that wage scales fixed are less than the highest in the comparable concerns though more than the lowest, it cannot be said that the total wage packet in the case of the appellants would 'be necessarily higher than in the case of the other comparable concerns.
This will be clear when we deal with the dearness allowance which has been fixed by the Tribunal, for it will appear that the dearness allowance fixed is more or less on the same lines, i.e. less than 371 the highest but more than the lowest in other comparable concerns.
On this basis it cannot be said that the total wage packet fixed in these concerns would be the highest in the region.
Though therefore the Tribunal has not specifically considered this aspect of the matter which it should have done its decision cannot be successfully assailed on the ground that the total wage packet fixed is the highest in the region.
This brings us to the case of factory workmen.
We are of opinion that there is force in the contention of the appellants insofar as the fixation of wagescales for factory workmen is concerned.
The respondents wanted that separate wages should be fixed for each category of workmen.
The Tribunal however rejected this contention and held that the usual pattern of ' having unskilled, semi skilled and skilled grades should be followed and the various workmen, though they should be known by their designation and not by the class in which they were being placed, should be fitted in these categories.
In the present concerns, there were six categories from before, namely (i) unskilled, (ii) semiskilled 1, (iii) semiskilled If, (iv) skilled 1, (V) skilled 11, and (vi) skilled 111.
The Tribunal kept these categories though it introduced a seventh category called the higher unskilled.
It is not seriously disputed that this category of higher unskilled does not exist in comparable concerns; nor have we been able to understand how the unskilled category can be sub divided into two namely, lower and higher unskilled, though we can understand the semi skilled and skilled categories being sub divided, depending upon the amount of ' skill.
But there cannot be degrees of want of skill among the unskilled class.
The Tribunal therefore was not justified in creating the class of higher unskilled.
It is neither necessary nor desirable to create a higher unskilled category and only the six categories which were prevalent from before should continue.
The main attack of the appellants on the wages fixed for these six categories is that in doing so, the 372 Tribunal completely overlooked the wages prevalent for these categories in concerns which it had considered comparable.
A look at the award shows that it is so.
The Tribunal has no where considered what the wages for these categories in comparable concerns are, though it appears that some exemplars were filed before it; but the way in which the Tribunal has dealt with the matter shows that it paid scant regard to the exemplars filed before it and did not care to make the comparison for factory workmen in the same way in which it had made comparison for clerical and subordinate staff.
In these circumstances, wage scales fixed for factory workmen must be set aside and the matter remanded to the Tribunal to fix wage scales for factory workmen dividing them into six categories as at present and then fixing wage after taking into account wages prevalent in comparable concerns.
The parties will be at liberty to lead further evidence in this connection.
Then we come to the question of dearness allowance.
So far as clerical staff is concerned, dearness allowance prevalent in the appellants ' concerns was as follows on the cost of living index of 411 420: Basic salary D.A at cost of Verification for in Rs. living index every 10 point group 411 420 movement 1 to 100 115% of basic salary 5% or the textile scale on 30 day month which ever is higher 101 to 200 35% 1 1/2% 201 to 300 25% 1% 301 and above 17 1/2% 3/4% 373 The Tribunal fixed the dearness allowance as follows: When the consu Variation for Salary slab mer price index each 10 point rise is between 411.
or fall in the 420 index On 1st Rs. 100 115% 5% On 2nd Rs. 100 50% 2.% On 3rd Rs. 100 25% 1%.
Balance upto 20% 1.% Rs. 600 A comparison of these figures will show that on the first hundred and the third hundred there is no difference in the scale fixed by the Tribunal; but there is a slight improvement on the second hundred and a very slight one above three hundred.
This scale fixed by the Tribunal is in line with some scales of dearness allowance recently fixed by Tribunals in that region.
The main improvement is on the second hundred and it cannot really be said that employees in that wage range do not require the higher relief granted to them by tribunals in view of the rise in prices.
We do not think therefore that the dearness allowance fixed by the Tribunal, taking into account what was already prevalent in these concerns and also taking into account the trend in that region, can be successfully assailed so far as clerical staff ' is concerned.
This brings us to the case of subordinate staff.
It appears that in these concerns, subordinate staff was getting dearness allowance on different scales based on the old textile scale of dearness allowance.
The Tribunal has put the subordinate staff in the same scale of dearness allowance as clerical staff.
The reason given by it for doing so is that incongruity in the payment of dearness allowance between clerical and subordinate staff should be removed.
It appears that on account of different scales of 374 dearness allowance for subordinate and clerical staff a member of 'the subordinate staff drawing the same wages would get less dearness allowance than a member of the clerical staff.
The discrepancy is very glaring as between clerical staff and factory workmen who also have different scales of dearness allowance.
The Tribunal therefore thought that dearness allowance which is meant to neutralise the rise in cost of living, should be paid to clerical staff, subordinate staff as well as factory workmen on the same scale, for the need for neutralisation was uniformly felt by all kinds of employees.
It also pointed that there was a trend towards uniformity in the matter of scales of dearness allowance as between clerical staff and other staff and factory workmen and referred to a number of firms where same scales prevailed for all the staff.
It has however been urged on behalf of the appellants that the pattern in the region is that there are different scales of dearness allowance for clerical staff and other staff including factory workmen and the Tribunal therefore should have followed this pattern.
The reasons given by the Tribunal for giving the same scales of dearness allowance to all the categories of staff, including the factory workmen appear to us to be sound.
Time has now come when employees getting same wages should get the same dearness allowance irrespective of whether they are working as clerks, or members of subordinate staff or factory workmen.
The pressure of high prices is the same on these various kinds of employees.
Further subordinate staff and factory workmen these days are as keen to educate their children as clerical staff and in the circumstances there should be no difference in the amount of dearness allowance between employees of different kinds getting same wages.
Further an employee whether he is of one kind or another getting the same wage hopes for the same amenities of the and there is no reason why he should not get them, simply because he is, for example, a factory workman, though he may be coming from the same class of people as a member of clerical staff.
On the whole therefore the Tribunal was in 375 our opinion right in following the trend that has begun in this region and in fixing the same scale of dearness allowance for subordinate staff and factory workmen as in the case of clerical staff.
So far therefore as subordinate and clerical staff are concerned, we see no reason to disagree with the rate of dearness allowance fixed by the Tribunal.
This brings us to the case of the dearness allowance for factory workmen.
In their case we have set aside the award relating to wage scales.
It follows that we must also set aside the award relating to dearness allowance as we have already indicated that the Tribunal has to take into consideration the total pay packet in fixing wages and dearness allowance.
When therefore the case goes back to the Tribunal for fixing wages and dearness allowance for factory workmen, it will be open to the Tribunal to fix the same rates of dearness allowance for factory workmen as for clerical staff; but in doing so the Tribunal must when making comparisons take into account the total wage packet (i.e. basic wages fixed by it as well as dearness allowance) and then compare it with the total wage packet of comparable concerns and thus arrive at a just figure for basic wage, for each category of factory workmen.
But the entire matter is left to the Tribunal and it may follow such method as it thinks best so long as it arrives at a fair conclusion after making the necessary comparison.
This brings us to the question of adjustment.
We have already said that the Tribunal allowed one to three increments depending upon the length of service between 1950 and 1959.
It has been urged that no adjustment should have been allowed taking into account the fact that incremental scales were in force previously also in these concerns and the Tribunal has increased both the minimum and the maximum in its award and has granted generous annual increments reducing the total span within which a particular employee belonging to clerical and subordinate staff will reach the maximum.
Reliance in this connection has been placed on the 376 French Motor Car Co. 's case (".
It is true that the Tribunal has given larger increments thus reducing the span of years for reaching the maximum.
That alone however is no reason for not granting adjustment.
But it is said that in the French Motor Co. case( ' ', this Court held that where scales of pay were existing from before no adjustment should be granted by giving extra increments and that case applies with full force to the facts of the present case.
Now in that case this Court pointed out on a review of a large number of awards dealing with adjustments that "generally adjustments are granted when scales of wages are fixed for the first time.
But there is nothing in law to prevent the industrial tribunal from granting adjustments to the employees in the revised wage scales even in a case where previously pay scales were in existence; but this has to be done sparingly taking into consideration the facts and circumstances of each case.
The usual reason for granting adjustment even where wage scales were formerly in existence is that the increments provided in the former wage scales were particularly low and therefore justice required that adjustment should be granted a second time." Another reason for the same was that the scales of pay were also low.
In those circumstances adjustments have been granted by tribunals a second time.
This Court then pointed out in that case that the incremental scales prevalent in that company were the highest for that kind of industry and therefore struck down the adjustments granted and ordered that clerical staff should be fixed on the next higher step in the new scales if there was no step corresponding to the salary drawn by a clerk in the new scale.
The question therefore whether adjustment should be granted or not is always a question depending upon the facts and circumstances of each case.
Let us therefore see what the circumstances in the present cases are.
Tables of comparative rates of increments were filed before the Tribunal (1) [1963] Supp. 377 for various grades of clerks.
It is clear from the examination of these tables and pay scales prevalent in the appellants ' concerns from 1950 that pay scales were not high as compared to pay scales in comparable concerns.
If anything, they were on the low side.
Further, as an example, in the case of junior clerks, the first rate of increment was Rs. 5 in the appellants ' concerns and this rate went on for 13 years; in other concerns where the first rate of increment was Rs. 5 it lasted for a much shorter period, which in no case exceeded eight years and was in many cases three or four years.
In some concerns the first rate of increment was higher than Rs. 5.
Almost similar was the case with senior clerks.
So it appears that in the appellants ' concerns the first rate of increment was generally on the low side and lasted for a longer period than in the case of comparable concerns.
In these circumstances if the Tribunal decided to give increments by way of adjustments it cannot be said that the Tribunal went wrong.
The facts 'in these cases are different from the facts in the case of the French Motor Car Co. 's case(2) and therefore (1) we see no reason for interfering with the order of adjustment.
After the change in wage scales, dear ness allowance and adjustment, the employees of the appellants ' concerns will stand comparison with some of the best concerns in that region.
But considering that there is no question of want of financial capacity and that Greaves Cotton & Co. which is the main company concerned in these appeals, has a high standing in that region, we do not think that the total wage packet fixed is abnormal or so disproportionate as compared to the total wage packet in other comparable concerns as to call for any interference with adjustments.
The next question is about the so called retrospective effect of the award.
The first reference was made to the Tribunal on April 8, 1959, while the last was in December 1959.
What the Tribunal has done is to grant wage scales etc., from April 1, 1959.
This cannot in our opinion be said to be really (1)[1963] Supp.
378 retrospective, because it is practically from the date of the first reference in the case of the main company.
On the whole therefore we see no reason to interfere with the order of the Tribunal fixing the date from which the award would come into force.
Lastly we come to the question of gratuity.
The attack in this connection is on two aspects of the gratuity scheme.
The first is about the fixation of 20 months as the maximum instead of ' 15 months, which was usual so far, The second is with respect to deduction from gratuity only to the extent of the financial loss occasioned by misconduct in case of dismissal for misconduct.
So far as the second provision is concerned it cannot be disputed that this is the usual provision that is being made in that region.
So ear as the increase in the maximum from 15 months to 20 months is concerned, it appears that the Tribunal has relied on a number of cases in which the maximum is higher than fifteen months wages.
In these circumstances considering that tri bunals have now begun to, give a higher ceiling and in one concern, namely Mackinnon Mackenzie, the ceiling has been fixed even so high as thirty moths by agreement, we do not think that any interference is called for in the present case.
We therefore dismiss the appeals so far as retrospective effect and adjustments as also fixation of wages and dearness allowance with respect to clerical and subordinate staff are concerned.
We allow the appeal with respect to factory workmen and send the cases back to the Tribunal for fixing the wage structure including basic wage and dearness allowance and for granting adjustments in the light of the observations made by us.
The new award pursuant to this remand will also come into force from the same date, namely, April 1, 1959.
The appeals with respect to gratuity are dismissed.
In the circumstances we order parties to bear their own costs.
Two months from today is allowed to pay up the arrears.
Appeal partly allowed and remanded.

dataset_name: IN-Abs

summary/full:
The disputes between the appellant companies and the workmen which were referred to the Industrial Tribunal for adjudication, related to wages, dearness allowance and gratuity.
The companies raised objections to the award of the Tribunal on various grounds.
Held:(i) The reference in the award to the recommendations of the Tripartite Conference wherein the need based minimum wage was evolved, did not vitiate the award, as the final decision was based not on them but on a consideration of the wages prevalent incomparable concerns so far as clerical and subordinate staff were considered.
(ii) In applying the industry cum region formula for fixing wage scales the Tribunal should lay stress on the industry part of the formula if there were large number of concerns in the same region carrying on the same industry, but where the number of industries of the same kind in a particular region was small, it was the region part of the formula which assumed importance particularly in the case of clerical and subordinate staff.
In the present case, the Tribunal was right in leaning more on the region part of the industry cum region formula and less on the Industry part.
Workman of Hindustan Motors vs Hindustan Motors, [1962] 2.
J.352 and French Motor Car Company vs Their Workman [1963] Supp.
considered.
(iii)The Tribunal was not justified in creating two classes of higher unskilled and lower unskilled in the category of unskilled factory workmen in the matter of fixation of wage scales.
(iv)Employees getting same wages should get the same scales of dearness allowance irrespective of whether they were working as clerks, or members of subordinate staff or factory workmen.
(v)In fixing the same rates of dearness allowance for factory workmen as for clerical staff, it was necessary for the Tribunal when making comparisons to take into account the total wage packet and then compare it with the total wage packet of comparable 363 concerns and thus arrive at a just figure for basic wage for each category of factory workmen.
(vi)There is nothing in law to prevent an industrial tribunal from granting adjustments to the employees in the revised wage scales even in a case where previously pay scales were in existence, but this has to be done sparingly, taking into consideration the facts and circumstances of each case.