India General Navigation And Railway... vs Their Workmen And Anr.

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Not extracted

Decision Date: 23 March, 1960

Coram: P.B. Gajendragadkar, K.N. Wanchoo, K.C. Das Gupta

In this case, the Court noted that the matter before it was an appeal by special leave in an industrial dispute. The appellant was a steamer company whose registered head office was located in Calcutta. A disagreement had arisen between the company and its workmen, and the dispute had been referred to the Sixth Industrial Tribunal of West Bengal for resolution. Of the several issues that had been canvassed before the tribunal, only two questions remained for consideration by the Court on appeal. The first question concerned the amount of dearness allowance that should be payable to the company's flat and steamer clerks. The second question related to the determination of working hours for ghat employees on Saturdays. The Court therefore confined its examination to these two surviving points of contention.

The Court then turned to the first issue, namely the dearness allowance for the flat and steamer clerks. It recorded that the rates of pay and the dearness allowance payable to these clerks had previously been the subject of adjudication in earlier awards between the company and its workmen. The earliest dispute, decided in 1948, resulted in the clerks being placed in grade “E.” A subsequent dispute in 1953 saw a claim for revision of the allowance rejected. Eventually, by way of settlement between the parties, the scale for these clerks was raised to Rs 60‑3‑102, a scale that the present tribunal had affirmed and refused to alter further. At the time of the present controversy, the clerks were receiving a minimum dearness allowance of Rs 35. The clerks contended that the company applied the “Bengal Chamber of Commerce rate” of dearness allowance uniformly to all staff stationed at the head office and at the Calcutta ghats, and they argued that the same higher rate should be extended to them. After examining the circumstances, the tribunal awarded the Bengal Chamber of Commerce rate to the clerks retroactively from September 1957. The company objected, asserting that the tribunal had erred in permitting this higher rate because the allowance was intended for workmen residing within Greater Calcutta. The company further maintained that, as a matter of principle, dearness allowance should correspond to the locality where a workman is posted, and since the clerks were not posted in Greater Calcutta, they should not have been granted the higher rate. The tribunal, however, reasoned that the clerks were directly under the control of the head office and therefore should be treated as part of the head‑office workforce. It further held that dearness allowance served to neutralise the high cost of living and, because the families of these clerks were presumed to reside in Calcutta, they ought to receive the same allowance as other employees of the company who lived in Calcutta.

In this matter the Court observed that the rule governing dearness allowance is clearly linked to the place where an employee is posted. The difficulty in applying that rule to the clerks in question arose because these clerks did not have a fixed posting; they were employed as flat and steamer clerks and their principal work was performed on vessels while those vessels were navigating the river. Because the clerks lacked a specific place of posting, the Court explained that the concept of “place of posting” must be understood as the location where the employee’s family—wife and children—resides, since that is the practical base for the employee’s domestic expenses. Accordingly, the tribunal had held that the clerks should receive the Calcutta rate of dearness allowance on the assumption that their families necessarily lived in Calcutta whenever the clerks were on duty on a flat or steamer. However, the Court noted that the record contained no evidence to support that assumption and it could not be presumed that every clerk kept his family in Greater Calcutta. The Court reiterated that the Calcutta rate of dearness allowance is not intended for workers whose families reside outside Greater Calcutta. Consequently, while the Court agreed that the tribunal was correct in granting the Calcutta rate to those clerks whose families actually lived in Calcutta, it criticized the tribunal for erroneously assuming that all such clerks had families in Greater Calcutta.

The Court also addressed the contention that the earlier award of 1949, which had been upheld by the tribunal in 1954, should bind the parties and prevent any alteration from September 1957, on the ground of res judicata. In examining that argument, the Court referred to the decision in Burn and Co., Calcutta v. Their Employees, where it was held that “An award of an industrial tribunal is intended to have a long term of operation, and can be reopened under Section 19(6) of the Industrial Disputes Act, No. 14 of 1947, only when there has been a material change in the circumstances on which it was based.” The Court explained that Section 19(6) itself recognizes that an award ceases to be binding once it is terminated, and therefore the doctrine of res judicata must be applied cautiously in industrial disputes concerning wages and dearness allowance. The Court further observed that there had indeed been a material change in circumstances because the general price level in the country had risen markedly between 1954 and 1957. In view of this increase, the Court concluded that the claim of no change in circumstances could not be sustained, and a legitimate case existed for revising the dearness allowance from September 1957. Accordingly, the Court expressed the opinion that the tribunal’s award should be adjusted in light of the changed economic conditions.

The Court directed that the award be altered so that the dearness allowance rate would apply only to those clerks who maintained their families—specifically a wife and children—in Greater Calcutta. For clerks who did not keep their families in that area, the existing dearness allowance rate would remain in force. Accordingly, the Court issued an order reflecting this modification. Regarding the issue listed as point (ii), the Court examined the matter of working hours on Saturdays in the Ghat Offices. The tribunal had previously upheld the 1949 award, but the Court observed a minor error in the tribunal’s interpretation of the Saturday hours. The award, as reproduced in the West Bengal Industrial Awards for the quarter ending 30 September 1949 (page 416), presented identical working hours for each day from Monday through Saturday. However, the award also indicated that, when the nature of the work allowed, clerks could be permitted to leave at approximately 2 p.m. or 3 p.m. on Saturdays. The tribunal was alerted to a concern that the discretion to allow an earlier departure on Saturdays might not be exercised liberally. Consequently, the tribunal had introduced a safeguard by directing that any clerk detained after 3 p.m. on a Saturday should receive half‑day wages in addition to normal pay. The company contested this direction, arguing that it created an obvious inconsistency because the tribunal had earlier affirmed that the award of 1949 prescribed working hours of 10 a.m. to 6 p.m. with a one‑hour midday recess. The Court noted this inconsistency and also identified a misprint in the printed version of the 1949 award that erroneously listed the total weekly hours as 30. To eliminate the ambiguity, the Court fixed the working hours as follows: from Monday to Friday, work would be from 10 a.m. to 6 p.m. with a one‑hour recess at midday; on Saturdays, work would be from 10 a.m. to 3 p.m. without any recess. If any worker were detained beyond 3 p.m. for a period of half an hour or more up to 6 p.m., the worker would be entitled to an additional one‑fourth day’s wages on top of the regular wages. All other provisions of the 1949 award concerning work after 6 p.m. would remain unchanged. The Court therefore allowed the appeal in part, modified the tribunal’s order in the manner described on both issues, and ordered that each party bear its own costs.