Indian Oxygen Ltd. v. Presiding officer — 1989 DIGILAW 751 (ALL)

JUDGMENT Palok Basu, J. - The question which arises for determination in this writ petition is whether the petitioner-company has directed payment of Variable Dearness Allowance (for short V. D. A.) to workers at its Kanpur Unit faithfully following the award of the Industrial Tribunal, Kanpur, dated 27-7-1981 as modified by the Supreme Court's appellate order dated 2-5-1985. 2. M/s. Indian Oxygen Ltd., the petitioner-company is a multi-national company in India with units spread in various parts of the country including Kanpur and Delhi, On behalf of the Employees Union at Kanpur Unit, a demand for upward revision in the V. D. A. paid to the workers by the company was made on 23-5-1977 which was referred by the Government of Uttar Pradesh to the Industrial Tribunal for adjudication in accordance with the provisions of the Industrial Disputes Act, (hereinafter referred to as the Act,). The reference was: "Whether the Variable Dearness Allowance payable by the employers to its workers, should be revised and it should be linked with the Consumer Price Index for Industrial Workers at Kanpur computed by Labour Bureau, Shimla ? If yes, then from what date and with what other details". 3. The Industrial Tribunal, after a detailed examination of the matter, gave its award on 1-4-1 v77. The Tribunal ultimately held as under : "I award, therefore, that the workmen of Kanpur Unit should be paid dearness allowance linked to the All India Consumer Price Index (1960-100) for the Kanpur Centre complied by`the Labour Bureau, Shimla'. The calculation of the rate of dearness allowance will remain the same as are presently operative and no change is required therein." "Lastly, the question of the date from which this award should be operative has to be considered. The matter was referred to this Tribunal for adjudication vide reference order dated 21-5-1977. I consider it proper that the award should be operative from April, 1, 1977 and award accordingly." "The Union is awarded Rs. 500 as costs". Sd/ S. A. Sharma Presiding Officer, Industrial Tribunal III U. P. Kanpur. 27-7-1981 4. An appeal was filed by Union before the Hon'ble Supreme Court of India which was decided on 2-5-1985. The operative portion of the judgment of the Supreme Court reads as under : "Accordingly, this appeal partly succeeds and is allowed. 500 as costs". Sd/ S. A. Sharma Presiding Officer, Industrial Tribunal III U. P. Kanpur. 27-7-1981 4. An appeal was filed by Union before the Hon'ble Supreme Court of India which was decided on 2-5-1985. The operative portion of the judgment of the Supreme Court reads as under : "Accordingly, this appeal partly succeeds and is allowed. The award of the industrial Tribunal that the workmen of the Kanpur Unit of the All India Oxygen Ltd. should be paid dearness allowance linked to all India Consumer Price Index (1960-100) `for Kanpur Centre complied by the Labour Bureau, Shimla, is modified to read that the dearness allowance should be paid according to All India consumer Price Index Number for Kanpur (1960-100) complied by the Labour Bureau, Shimta after applying conversion factor also called linking factor of 4.83'. In all other respects i.e., the date of enforceability etc., the award remains unaltered except for the modification herein granted. The appeal allowed to this extent with costs qualified at Rs. 3,300." 5. On 19th June, 1985, the company issued notices to all workmen intimating how they would be implementing the award of the Tribunal as modified by the Supreme Court. Mode of calculation was given in the said notice. The Union being of the view that the company's method of interpreting the award as modified by the Supreme Court, and, its method of calculation, were contrary to the directions of the Supreme Court, preferred a contempt application before the Supreme Court. The following order was passed on 27-1-1986 by the Supreme Court: "The proper remedy for the petitioners in case they feel that the terms of the judgment of this Court have not been correctly, duly and faithfully complied with by the respondents is to move the concerned Labour Court by filing an application under Section 33-C(2) of the Industrial Disputes Act and if this is done, the Labour Court will and determine whether the terms of judgment of this Court have been properly and duly complied with by the respondents." "Subject to the above observations this Civil Misc. application is dismissed." 6. Consequently, Girdhari Singh and other workers of the petitioner-company (opposite-parties Nos. 3 to 233) filed applications under Section 33-C(2) of the Act before the Labour Court II, U.P., Kanpur, in which it was prayed that a sum of Rs. application is dismissed." 6. Consequently, Girdhari Singh and other workers of the petitioner-company (opposite-parties Nos. 3 to 233) filed applications under Section 33-C(2) of the Act before the Labour Court II, U.P., Kanpur, in which it was prayed that a sum of Rs. I, 45, 80, 827.94 be awarded to them as the V.D.A. payable after carrying out the directions in the Supreme Court's appellate order modifying the original award. The petitioners put in appearance and objected to the prayer of the workmen. 7. After hearing the parties the Labour Court has, by its order dated 28-2-1987, rejected the mode of calculation indicated in the notice of the petitioners dated 19-6-1985 and directed that the scheme of payment of V. D. A. in vague at the time of the Reference to the Tribunal in 1977 will continue but with the application of the conversion factor of 4.83 and gave details of its Scheme in Para 23 of its order. In is this order which is under challenge in this writ petition filed on behalf of M/s. Indian Oxygen Ltd. 8. Sri G.B. Pai, Senior Advocate, and Sri V.B. Singh with him on behalf of the petitioners, Sri ;.K.P. Agarwal, Senior Advocate. Sri Anand Kumar Sinha with him for the Employees Union Sri J. N. Tewari, Senior Advocate, Sri Rakesh Tewari with him representing the Karmachari Sangh, the two representative bodies of workmen engaged in the Kanpur Unit, have been heard at length. 9. At the outset it may be mentioned that since an application under Section 33-C (2) of the Act by the respondents was made, more so, after the observations of the Supreme Court in the contempt application, the Labour Court had to examine whether the petitioner-company was faithfully and duly implementing the Award as modified by the Supreme Court. 10. Though in the written arguments six criticisms against the impugned order have been detailed, the main arguments raised by Mr. 10. Though in the written arguments six criticisms against the impugned order have been detailed, the main arguments raised by Mr. Pai on behalf of the petitioner company are: (1) The order of the Labour Court gives more dearness allowance than was awarded to Delhi workers by the Delhi Tribunal and, therefore, the judgment of the Supreme Court has been wrongly interpreted in as much as the impugned goes beyond the original demand of the workers; (2) The principle of linkage as directed by the Supreme Court has not been followed in as much as the `principles of neutralisation' have been ignored; (3) The Labour Court has ignored the principle of region-cum-industry in awarding the V. D. A. according to its Scheme. 11. The last argument regarding application of the principles of region-cum-industry has to be mentioned only to be rejected, because it is not available to the petitioners at all. In proceedings under Section 33-C (2) of the Act, the Labour Court, just as an execution civil court, had only to implement the award of the Industrial Tribunal as interpreted by the Supreme Court and could not have gone behind the award unless there was some ambiguity in the award itself. Factually there is and was no ambiguity. In this connection, it may be useful to refer at this stage to some of the decisions of the Hon'ble Supreme Court dealing with the scope and jurisdiction of the Labour Court while determining a matter brought to it under Section 33-C (2) of the Act. 12. In M/s. Voltas Ltd. v. J.M. Demello and another, AIR 1971 SC 1902 the Supreme Court has observed : "The question as to the scope and jurisdiction of a Labour Court under Section 33-C (2) has been subject-matter of several decisions of this Court. It is not necessary to go into those decisions once again as in the Chief Mining Engineer East India Coal Co. Ltd. v. Rameshwar all those decisions were examined and the propositions deducible from them were formulated. As stated in propositions (5) and (8), proceedings under Section 33-C (2) are analogous to execution proceedings and a Labour Court called upon to compute the benefits "claimed by workmen is in the position of an executing court and as such competent to interpret an award where there is a dispute as to the rights thereunder or as to its correct interpretation. Obviously, if the award is unambiguous the Labour Court is bound to enforce it, and under the guise of interpreting it, it cannot make a new award by adding to or subtracting anything therefrom. Although it cannot go behind the award, it is nevertheless competent to construe the award where it is ambiguous and to ascertain its precise meaning, for, unless that is done, it cannot enforce the award nor it is called upon to do so by an application under Section 33-C. As held in Central Bunk of India v. Raja Gopalan, a claim under Section 32-C (2) postulates that a determination of the question about computing in terms of money may, in some cases have to be preceded by an enquiry into the existence of the right. Such an enquiry is incidental to the main determination assigned to the Labour Court by that sub-section." 13. In Central Inland Water Transport Corporation Ltd. v. The Workman and another, AIR 1974 SC 1604 , Supreme Court held as under : "It is now well-settled that a proceeding under Section 33-C (2) is a proceeding, generally in the nature of an execution proceeding wherein the Labour Court calculates the amount of money due to workman from his employer, or if the workman is entitled to any benefit which is capable of being computed in terms of money, the Labour Court proceeds to compute the benefit in terms of money. This calculation or computation follows upon an existing right to the money or benefit in view of being previously adjudged, or otherwise duly provided for .... ... Therefore, when a claim is made before the Labour Court under Section 33-C (2) that court must clearly understand the limitations under which it is to function. It cannot arrogate to itself the functions-say of an Industrial Tribunal which alone is entitled to make adjudications in the nature of determinations." 14. In M/s. Punjab Beverages Pvt. Ltd. Chandigarh v. Suresh Chand and another, AIR 1978 SC 995 , the Hon ble Supreme Court has held as under : "A proceeding under Section 33-C (2) is a proceeding in the nature of execution proceeding in which the Labour Court calculates the amount of money due to workman from his employer, or if the workman is entitled to any benefit which is capable of being computed in terms of money ..................... It is not competent "to the Labour Court exercising jurisdiction 33-C (a) to arrogate to itself the functions of an Industrial Tribunal and entertain a claim which is not based on an existing right but which may appropriately be made the subject-matter of an Industrial dispute in a reference under Section 10 of the Act." 15. In order to decide the two remaining points raised, it will be necessary to have a clear idea as to how the Hon'ble Supreme Court has dealt with the various criticism against the Award dated 27-7-1981. In short, the Supreme Court has recorded the following findings : (i) The workman of Kanpur were paid V. D. A. linked to Bengal Chamber of Commerce Index Number A New scheme linked to All India Consumer Price Index prepared by the Labour Bureau, Shimla, was introduced by the company in the year 1975. (ii) Region-cum-industry principle should be followed in industrial adjudication regarding dearness allowance but reference to it and also to the Supreme Court's decision in Bengal Chemicals were not necessary because in the instant case no devising of dearness allowance-formula was being done but only upward revision with its linkage to C.P.I. Kanpur was claimed. (iii) The demand for revision came because of the collusive settlement which should not have been accepted as the starting point. Though the Tribunal noted the importance of linking factory, it did not specifically include it in its award because the linking factor was discontinued in U. P. This reasoning was erroneous, where a D. formula is in vogue and it is linked to some Consumer Price Index Number, whenever the base year for C. P. I. Number is changed, a fresh linkage requires a conversion ratio. Wherever D.A. formula was linked to 1939-100, it has to be de-linked and relinked to the C.P.I. 1960-100 for which a conversion ratio between 1939-100 and 1960-100 will have to be computed. Following Ahmedabad Mill Owners' case, the conversion ratio of 4.83 was followed. (iv) It is usual to consider paying capacity of employer. Mr. Pai rightly did not contend that. (v) The Union's contention that the Delhi Award be accepted need not be examined because comparison between Delhi and Kanpur is untenable. (vi) Appeal allowed Award modified. Follow C. P. I. for Kaupur after applying conversion factor 4.83. In alt other respects the award remains unaltered. (Emphasis added). 16. Mr. Pai rightly did not contend that. (v) The Union's contention that the Delhi Award be accepted need not be examined because comparison between Delhi and Kanpur is untenable. (vi) Appeal allowed Award modified. Follow C. P. I. for Kaupur after applying conversion factor 4.83. In alt other respects the award remains unaltered. (Emphasis added). 16. The argument on behalf of the petitioner that interference with the impugned order will be justified because it goes even beyond the demand of the workmen and gives more payment to the workmen in Kanpur than at Delhi, has to be examined in the background of these findings of the Supreme Court. It has been noted above that the Supreme Court while, on the one hand did not enter into the said issue at all because comparison between Delhi and Kanpur was not necessary, on the other it specifically directed applying the linking factor of 8.83 on Kanpur C. P. I. It may be that payment to some of the workmen in Kanpur may become more than his counterpart in Delhi but that may only be the result of applying linking factor and not the non comparison of Kanpur with Delhi for V.D.A purposes by the Labour Court. In view of the findings of the Supreme Court, the Labour Court simply could not have gone into that issue a new while acting under Section 33-C (2) of the Act. The impugned order thus, in no way, goes against or beyond the demand raised. This argument too is, therefore, without any force. 17. Therefore, from all angles only one point survives for determination as to whether linking factor was correctly applied by the petitioners through their notice dated 19-6-1985 or has been correctly applied and enforced by the Labour Court. 18. Before going into this argument it has to be remembered that in 1977 when the reference to the Tribunal was made the company was following a `Scheme' (allegedly brought in after its settlement with the Karamchari Sangh in 1975; as the basis for payment of V.D.A. This Scheme was linked to All India Average C.P.I. with base 1960-100. Prior to it the Company was following the C.P.I. number for Calculate (Middle class) prepared by Bengal Chamber of Commerce linked to the old series (1939-100). Prior to it the Company was following the C.P.I. number for Calculate (Middle class) prepared by Bengal Chamber of Commerce linked to the old series (1939-100). This precisely was the reason for the demand of the Employees' Union that the Company be asked to revise the rate of V.D.A. so as to link it with C. P.I. Number for Kanpur (Not All India) with correct conversion (Linking) factor. The Tribunal awarded the claim for linkage with Kanpur C.P.I. but did not apply conversion factor. The Hon'ble Supreme Court issued the directive to apply the conversion factor (4.83; after observing that "the award remains unaltered." 19. Therefore, it follows that the Tribunal's award to the effect that: "the calculation and the rate of D. A. will remain the same as are a presently operative and no change is required therein. The award should be operative from 1-4-1977." has to be applied with linking factor 4.83. 20. But what has happened' is that the petitioner Company has issued notice dated 19-6-1985 bringing in a scheme, which, according to them correctly applies the linking-factor, thereby DELINKED it from base 1939-100 and then DELINKED it with base 1960-100 According to the said notice, the process to achieve the aforesaid result was to first ascertain what the C. P. I. with 1939 old base was in the year 1960 new base ; then, ascertain for each level of basic salary what D. A. was payable on 1939 base under the prevalent scheme of D. A. at what particular C.P.I. ; then, the amount of D. A. so ascertained would be the amount payable at base 100 in new series on which the rise on base 1960-100 will be payable as per new rates of the Company, which is operative as per the judgment of the Supreme Court. 21. The workmen's contention about the correct method appears to be that the C. P. I. for Kanpur Centre (1960-100) be taken and then the index figure should be multiplied by the conversion factor of 4.83 and then D. A. should be calculated. 22. 21. The workmen's contention about the correct method appears to be that the C. P. I. for Kanpur Centre (1960-100) be taken and then the index figure should be multiplied by the conversion factor of 4.83 and then D. A. should be calculated. 22. The Scheme and method found as.,correct for applying conversion factor, by the Labour Court is that the Prevalent Scheme concerning payment of D. A. and A. D. A. was to continue ; but to find out V. D. A., the quarterly converted index and the increase/decrease on the same had to be found out with reference to 324 point and, therefore, figure 1565 (324x4.83) was to be taken for adjustment of V. D. A. The Labour Court gave the details of the index number with 1960 base along with converted index and quarterly average for adjustment of D. A as per the Prevalent Scheme, in Annexure `D' to its order. 23. Sri Pai laid emphasis on the two words used by the Supreme Court, i.e., `de-linked' and `re-linked'. He proceeds to argue as if two district and different actions are necessary. He says that `de-linked from old series' is one process and then `relinked with the new series' is another. Mr. Pai wanted to derive support to this argument from the observation of the Supreme Court to be the effect that the old series of 1939 -100 has become old and obsolete and was, therefore, rigntly replaced by the new series. But it has to be noted that these observations in the judgment of the Supreme Court do not in any way help or advance the argument of Mr. Pai because these observations do not mean that for converting the old series into new, two separate processes have to be pushed through. It is more than apparent that in order to bring in a `new series' into operation, simple mathematical exercise has to be gone into. There are no two percusses-one of `de-linking' and the other of `re-linking'. As soon as the conversion factor is applied to the old series, it gets de-linked from the old one and simultaneously gets ranked to the new series. This being the state of affair, the argument has, therefore, no force and has to be rejected. 24. The second argument on the aforesaid point advanced by Mr. As soon as the conversion factor is applied to the old series, it gets de-linked from the old one and simultaneously gets ranked to the new series. This being the state of affair, the argument has, therefore, no force and has to be rejected. 24. The second argument on the aforesaid point advanced by Mr. Pai is that since the "settlement" with the Sangh had been discarded as collusive by the Union which was so described also according to the findings recorded by the Supreme Court, that settlement could not have been made the basis or relied upon for purposes of applying the conversion factor. It is true that the settlement arrived at between to company and the Sangh, has been rejected as collusive. But the company-petitioner had brought into being a Scheme since 1977 as a result of which payment of D, A., Additional D. A. and Variable D. A. were being paid to the workmen. It is that Scheme or system of payment of Variable D. A. which was challenged by the Union and was referred for adjudication to the Industrial Tribunal. This scheme was allowed by the Tribunal's. Award to continue for ' future payments with the added direction that the All India C. P. I., was to be replaced by Kanpur C. P. I. The Supreme Court has, in its appellate order, further modified the said Award to the effect that the conversion factor of 4.83 shall be put in. Thus, neither in the Award of the Industrial Tribunal dated 27-7-1981, nor the appellate order of the Supreme Court dated 2-5-1985 nor the impugned order of the Labour Court dated 28-2-1987, has the Settlement between the petitioner and the Sangh been relied upon. As stated above, it was the defect in the system or Scheme adopted by the company which proved advantageous for the petitioners and detrimental to the employees, that was challenged by the workmen. That Scheme then prevalent was modified by the Industrial Tribunal and further modified by the Supreme Court. Consequently there is no force in the argument of the learned Counsel for the petitioner that the impugned order of the Labour Court is basis upon a settlement which itself has been rejected by the Supreme Court. 25. That Scheme then prevalent was modified by the Industrial Tribunal and further modified by the Supreme Court. Consequently there is no force in the argument of the learned Counsel for the petitioner that the impugned order of the Labour Court is basis upon a settlement which itself has been rejected by the Supreme Court. 25. It may thus be noted that by the method suggested in the notice dated 19-6-1985, very the principle of applying the conversion factor appears to have been left out. There was no occasion for the company to adopt a totally new formula or new Scheme. To repeat, a new scheme was already prevalent under which the D. A., Additional D. A. and Variable D. A. were being paid. By the award and the appellate order of the Supreme Court, the payment of V.D.A. only was altered. The C. P. I. for Kanpur with the conversion factor (Linking factor) of 4.83 was to be put into the said Scheme. According to the Scheme shown in the notice dated 19-6-1985, the upward and down word adjustment of D. A. was to be over the rise and fall of 324 points in the 1960 series. By the said notice, the Management, in effect brings in a formula that the C. P. I. 100 with new series 1960-100 should mean 4.83 points of 1939 base. This conclusion is obviously incorrect because the variations in the index alone have to be connected with 1939 base. Nothing more was to be done by the company. But the notice says that C. P. I. 100 in the new series 1960-100 has been taken to mean 4.83 points of 1939 base in order to de-link it from 1939 base. Therefore, the computation figures have been put in the reverse gear. The petitioner in a way claims to have applied the conversion factor for 1960 base in the old series of 1939 but, in effect, it is equating it with 100 of 1960 base and, therefore, the inclusion of the conversion factor at the earlier-stage of the calculation stands annulled by the following stage of the same calculation. The petitioner/company's notice dated 19-6-1985, therefore, sets a new formula and brings in a new Scheme which will not be faithfully complying the award of the Tribunal as modified by the Supreme Court and has thus been rightly rejected by the Labour Court. 26. The petitioner/company's notice dated 19-6-1985, therefore, sets a new formula and brings in a new Scheme which will not be faithfully complying the award of the Tribunal as modified by the Supreme Court and has thus been rightly rejected by the Labour Court. 26. Before concluding the case it should be specially noted, lest it is overlooked or left out, that the starting point of applying the Scheme in 1977 as well as the new Scheme suggested through a notice by the company petitioner is 324 points of the new series 1960-100. Therefore, the Labour Court is justified in taking out the difference between V.D.A. payable according to the existing scheme and what become, payable under the new Scheme and direct its payment to the workmen according to the pay scales. Therefore, no interference is called for in this writ petition. 27. The Labour Court had awarded nearly a month's time to the petitioner-company to submit details in triplicate as to the payment of V. D. A. to each employee since the papers and accounts were not produced before the Labour Court and were available with the petitioner-company Now, the petitioner may comply with those directions and the requirements on or before 30th of November, 1989, failing which the Labour Court will proceed in accordance with the law to give effect to the directions contained in its order dated 28-2-1987. 28. The writ petition is dismissed subject to the aforesaid directions. Under the facts and circumstances of the case, let the costs be borne by the parties.