The Kirloskar Oil Engines Ltd., Kirkee,... vs The Workmen And Others

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 587 of 1960

Decision Date: 17 November 1961

Coram: GAJENDRAGADKAR, J.

In the matter of The Kirloskar Oil Engines Ltd., Kirkee, Poona versus The Workmen and Others, the Supreme Court of India delivered its judgment on 17 November 1961. The case was heard before a bench of the Court, and the substantive provision under consideration was Section 36A of the Industrial Disputes Act, 1947 (Act 14 of 1947). The controversy arose from several disputes between the appellant company and its workmen that had been referred by the State Government of Maharashtra to the Industrial Tribunal, Bombay, for adjudication under the provisions of the Act.

The tribunal’s award, dated 16 December 1958, contained two principal rulings. First, it provided that any workman required to work on a weekly holiday or a prescribed public holiday should receive one and one‑half times his basic wages and dearness allowance in addition to a substituted holiday. Second, it directed that all workmen be entitled to fifteen days of privilege leave per year, which could be accumulated up to a maximum of forty‑five days. The appellant subsequently filed an application with the State Government invoking Section 36A, seeking clarification of the tribunal’s directions on two grounds. The first ground alleged that the justification for the additional payment on weekly off or holiday work – namely, the deprivation of an opportunity to spend leisure time with colleagues – was untenable because the entire factory operated on such days, rendering the rationale irrelevant. The second ground contested the blanket permission for all workmen to accumulate privilege leave up to forty‑five days, arguing that it lacked proper justification.

The Industrial Tribunal responded by limiting the accumulation of privilege leave to those workmen who had actually rendered at least two hundred and forty days of service in the preceding calendar year, thereby aligning the rule with the provisions of the Factories Act, 1948. Regarding the other points raised by the appellant, the tribunal held that its original directions were clear and that the purpose of Section 36A was to obtain clarification of ambiguities in the award, not to permit a modification or substantive review of the award’s terms. Consequently, it concluded that the appellant could not use the provision to alter the award.

The Court held that Section 36A was intended solely to empower a tribunal to clarify any difficulty or doubt concerning the interpretation of its award, and not to enable the tribunal to revisit, amend, or assess the correctness or validity of the award itself. Any question relating to the propriety or validity of an award provision lay outside the scope of the enquiry contemplated by Section 36A.

The judgment records that this civil appeal, numbered 587 of 1960, was filed by special leave against the tribunal’s award dated 16 December 1958 in Reference (Industrial Tribunal) No. 387 of 1958. Counsel for the appellant, including the Attorney‑General of India and another senior advocate, represented the company, while counsel for respondent No. 1 and counsel for respondent No. 2 appeared for the workmen.

The judgment was delivered by Justice Gajendragadkar. The appeal, which was granted special leave, originated from proceedings initiated by the appellant, Kirloskar Oil Engines Ltd., located at Kirkee in Poona, under section 36A of the Industrial Disputes Act, 1947 (the Act). The record showed that a number of disputes that were still pending between the company and its workmen were referred by the Government of Maharashtra to an industrial tribunal for adjudication. The workmen had raised seven distinct demands, of which two related specifically to privilege leave and to various allowances. The tribunal heard the matters and issued its award in two separate parts. The first part, which dealt with the demand for privilege leave and the different categories of allowances, was pronounced on 30 June 1958 and subsequently published on 7 July 1958. On 2 August 1958 the company applied to the State Government for a reference of certain points to the tribunal for clarification under section 36A. The Government consequently issued an order directing the tribunal to consider the two items of privilege leave and allowances. The tribunal provided the required clarification with respect to its direction on privilege leave. However, the tribunal observed that the direction contained in paragraph 14 of its award, which concerned payment to the workmen, did not require any clarification. The tribunal reasoned that the company was in effect seeking a modification of that direction, and that such a modification was outside the scope of the clarification procedure contemplated by section 36A. The tribunal therefore prepared a clarification award on the privileged‑leave issue and forwarded that award to the Government. Dissatisfied with that clarification award, the company approached this Court by way of a special leave petition.

For the sake of clarity, the Court outlined the precise nature of the clarification that the company sought from the tribunal. The dispute over privilege leave centred on paragraph 10 of the original award, which read as follows: “All the workmen, both daily and monthly rated, get privilege leave according to the provisions of the Factories Act. The leave usually comes to 14 or 15 days in a year. I consider a privilege leave of 15 days a year to both the sections of the workmen in the Kirloskar Oil Engines as quite adequate. At present this leave is allowed to be accumulated for two years. Here I am of the opinion that the accumulation should be up to 45 days. I therefore direct that all the workmen of the Kirloskar Oil Engines Ltd., Poona, shall be granted 15 days privilege leave (including privilege leave under the Factories Act) which will be allowed to be accumulated up to 45 days.” The company feared that the wording of this direction might permit every employee whose name appeared on the muster roll to claim the full fifteen days of privilege leave regardless of the actual number of days he or she had worked during the year. In other words, the company argued before the tribunal that the language used in the original award was sufficiently broad to justify a claim for fifteen days of privilege leave even where a workman had been absent for the majority of the year, provided his name remained on the roll. The tribunal considered the force of this argument in the subsequent proceedings.

In this case, the Court explained that the appellant had argued that the wording of the original award was so broad that it allowed any workman whose name appeared on the muster roll to claim fifteen days of privilege leave even if that workman had been absent for almost the whole year, for example three hundred and sixty days. The tribunal recognized the strength of that argument. It was unanimously accepted that, according to section 79 of the Factories Act 1948, a worker became eligible for paid leave in the following calendar year only when that worker had actually worked for at least two hundred and forty days in the factory during the preceding calendar year. The entitlement was calculated at the rate of one day of leave for every twenty days worked by an adult, or one day for every fifteen days worked by a child. The tribunal observed that the award did not intend to deviate from the basic rule set out in section 79. Accordingly, the tribunal added a clarification stating that, to qualify for the privilege of leave as directed by the award, each workman must have performed at least two hundred and forty days of actual work in the previous calendar year. Hence, regarding the provision on privilege leave, the clarification sought by the appellant was incorporated.

Concerning the second issue for which the appellant requested clarification, the award contained the following direction: “At present, if a workman works on a weekly off or on a holiday, he receives a substituted holiday under the Factories Act but no additional payment. In my opinion, a workman makes plans well in advance about spending his holidays. He spends his time in the company of his colleagues and refreshes himself. If he receives only a substituted holiday, he is deprived of his enjoyment. He should therefore be compensated in money as well as by a day off. I therefore direct that if a workman has to work on a weekly off or on a holiday (paid or unpaid) he should be paid one and a half times his wages and dearness allowance over and above the substituted holiday.” The appellant argued before the tribunal that this direction required clarification because, as worded, it could impose a very heavy financial burden on the appellant. The tribunal held that the direction was already clear and that, under the pretext of clarification, the appellant was actually seeking to modify the award. Consequently, the tribunal rejected the appellant’s request for any clarification on that point. In the present appeal, the learned Attorney‑General attempted to contend that the allowance for accumulating privilege leave up to forty‑five days, as permitted by the award, was not justified. The Court held that this argument could not be considered in the present appeal for two reasons. First, no such plea had been raised before the tribunal during the earlier clarification proceedings, and therefore the appellant could not now introduce a new plea.

The Court observed that the appellant was not permitted to introduce a fresh plea at this juncture. It reminded that the enquiry permitted under the proceedings contemplated by section 36A of the Industrial Disputes Act was subject to strict limitations. Section 36A authorised the appropriate Government to refer any question to the tribunal when the Government was satisfied that a difficulty or doubt had arisen concerning the interpretation of any provision of an award made by that tribunal. The provision further required that, once such a question was referred, the tribunal must, after giving the parties an opportunity to be heard, decide the question, and that the tribunal’s decision would be final and binding on all parties concerned. From these provisions it was clear that the scope of the enquiry under section 36A was confined to resolving difficulties or doubts that related only to the interpretation of an award provision. If the wording of a provision was ambiguous or obscure and could not be reasonably interpreted, the appropriate Government could move a reference under section 36A to obtain a clarification. However, any question relating to the propriety, correctness or validity of an award provision lay outside the ambit of the enquiry contemplated by section 36A. When a party is dissatisfied with an award provision on its merits, the only remedy available is an appeal, for example under Article 136 of the Constitution, to this Court. A grievance against an award provision could therefore be ventilated only through such an appeal and not by invoking the procedure of section 36A. Consequently, the enquiry permissible under section 36A was limited strictly to questions of interpretation and nothing more. The Court therefore concluded that, even if the appellant had sought to raise the question of the propriety of allowing accumulation of privilege leave up to forty‑five days before the tribunal, and even if the State Government had referred that question to the tribunal under section 36A, the tribunal would have been justified in refusing to consider it because the issue did not concern interpretation of the provision but its merits and propriety. In view of this limitation, the Court held that the appellant was not entitled to raise that point in the present appeal.

The Court then turned to the appellant’s next contention, which concerned the tribunal’s refusal to entertain an application for clarification of the provision that required payment of one and one‑half times the worker’s wages and dearness allowance, over and above a substituted holiday, when the worker was required to work on a weekly off or on a holiday, whether that holiday was paid or unpaid. The appellant’s grievance was that, in the years 1956 and 1957, the matter arose on account of circumstances that had affected the industrial sector. The appellant argued that the clarification sought was necessary to determine the correct amount of payment due under the award in those specific circumstances. The Court noted the substance of the appellant’s claim and prepared to examine whether the tribunal’s refusal to consider the clarification was justified under the principles governing the interpretation of award provisions.

In the year 1956 and 1957 the State Government, because of a shortage of electrical energy for industrial purposes, directed that factories change their weekly holidays from Sunday to another weekday, so that each factory or group of factories observed a single weekday as the weekly day off. The appellant argued that when only a small number of workmen were required to work on a weekly off or on a holiday while the rest of the factory remained closed, there was a reasonable ground for paying those workmen the additional amount authorized by the award. The appellant further claimed that no such payment could be justified when the entire factory operated on the weekly off or on a holiday. To support this position, the appellant relied on the wording of the original award, which explained that the extra payment for work done on a weekly off or on a holiday was intended to compensate a workman for being deprived of the opportunity to spend leisure time with his colleagues and to refresh himself. The appellant contended that when all colleagues are present, the rationale of deprivation does not apply. The tribunal was not persuaded by this line of reasoning and consequently refused to grant any clarification‑cum‑modification of its award. It was noted that the argument based on the State Government’s orders to change weekly holidays because of the electricity shortage had never been raised before the tribunal when the dispute was first heard. In its present order the tribunal recorded that a review of its notes of arguments showed that no such plea had been presented at that earlier stage. The tribunal also observed that, having regard to the definition of “week” under section 2(f) of the Factories Act and to the provisions of section 52 of the same Act, the appellant could have elected to declare a different day as the first day of the week for its own purposes; had the appellant taken that step, the difficulty on which it now relied would not have arisen. The appellant maintained that the tribunal’s reasons for rejecting the request for clarification were unsound. The Court was not impressed by this contention, observing that the appellant’s present argument ignored the limited scope of inquiry permitted under section 36A. In substance, the appellant sought to modify the award’s direction on payment, relying on the State Government’s orders that altered weekly holidays. Such a claim could not be entertained in a clarification proceeding under section 36A, which is not intended to allow the tribunal to review or alter its own award but only to clarify ambiguous provisions.

The Court explained that the tribunal did not have authority to change its own award; instead, the statute allowed the tribunal solely to clarify the award’s provisions when a difficulty or doubt about their interpretation arose. In this case, the Court observed that the provisions challenged by the appellant were set out in paragraph 14 of the award and that those provisions were expressed in a clear and unambiguous way. The Court further noted that, irrespective of whatever grievance the appellant might have had concerning the validity or the propriety of the directions contained in that paragraph, no difficulty or doubt existed as to their meaning. Accordingly, the Court was satisfied that the tribunal acted correctly when it refused to amend the direction in the present proceeding. As a result, the Court held that the appeal could not succeed. The appeal was therefore dismissed, and the appellant was ordered to bear the costs of the proceedings. The dismissal of the appeal was final.