JUDGMENT - KHANDEPARKAR R.M.S., J.:—The award dated 28th April, 2000 passed by the Industrial Tribunal, Mumbai, in the matter of general demands such as wage scales, dearness allowance, leave and allowance, etc. is sought to be challenged on the grounds of non application of industry-cum-region formula, non-consideration of issue of financial burden upon the employer, improper exercise of jurisdiction in casting the burden of proof upon the petitioner company, acceptance and approval of the demands of the employees without any proof and/or basis and without application of mind and unjustifiable retrospective enforcement of revision of wages ignoring inordinate delay in pursuing the matter by the employees. 2.The petitioner-company is engaged in several business activities like establishment of sugar plants, cement plants, industrial boiler, gear boxes, etc., having its factories at Walchandnagar, Satara in Maharashtra and at Dharwad in Karnataka with its Head Quarters at Mumbai. The total pay packet of the last paid employee of the petitioner at the head office in April, 1992 was Rs. 3347/- against the minimum wage of Rs. 1123/- for skilled employees and the same rose to Rs. 6451.71 ps. in December, 1999 as against the minimum wage of Rs. 2285/-. The respondent No. 1 is the Union representing the employees at the head office. In the meeting between the petitioner and the respondent No. 1 held on 25th July, 1990, the MOU was drawn and executed by the parties agreeing to have a settlement to be drawn and executed for the period expiring on 31st March, 1992 and further that any settlement thereafter to be made shall be effective from 1st April, 1992. Consequently, the settlement was arrived at on 13th September, 1990, which expired on 31st March, 1992. By letter dated 16th March, 1992, the respondent No. 1 submitted fresh charter of demand incorporating 21 demands. By letter dated 7th April, 1997, the respondent No. 1 approached the Commissioner of labour for conciliation proceedings relating to the said demands. The conciliation officer submitted his failure report on 29th August, 1997 and thereafter, the matter was referred for adjudication by Reference (II) No. 50 of 1998 and further by corrigendum dated 5th August, 1998. By letter dated 7th April, 1997, the respondent No. 1 approached the Commissioner of labour for conciliation proceedings relating to the said demands. The conciliation officer submitted his failure report on 29th August, 1997 and thereafter, the matter was referred for adjudication by Reference (II) No. 50 of 1998 and further by corrigendum dated 5th August, 1998. While Shri Amaral Mukherjee, Vice Chairman of the Union, filed affidavit in support of the employees, the case of the company was sought to be established by filing affidavit of Shri Mohanlal Hiralal Purwat, General Manager (Accounts) and Shri Vithal Tukaram Nanaware, Chief Personnel Manager of the company. All deponents were cross-examined by their adversaries. It is to be noted that the demand in the year 1992 was in relation to 24 employees and by the time the reference was being considered about 16 employees had either retired or resigned or expired, leaving about 8 employees. Further, by the time the impugned award was declared, two more employees ceased to be in employment of the company leaving only six employees. 3.The Constitution of India discloses deep concern for the welfare of the workers, and the same is clearly highlighted by the Directives Principles embodied in the Articles 42 and 43. Obviously, the provisions aim at eliminating inequality in income and the status and standard of life and to provide a decent standard of life to all working people and to ensure security to working class. It was observed in (D.S. Nakara and others v. Union of India)1, reported in A.I.R. 1983 S.C. 130 that ".............. the less equipped person shall be assured a decent minimum standard of life and exploitation in any form shall be eschewed. There will be equitable distinction of national cake and the worst of shall be treated in such a manner as to push them up the ladder." It was held by the Apex Court in (Express Newspapers (Pvt.) Ltd. another v. The Union of India)2, reported in A.I.R. 1958 S.C. 578, the Article 43 sets out the ideal to which our Social Welfare State has to approximate in an attempt to ameliorate the living conditions of the workers. A living wage to a worker is therefore a constitutional expectancy explicit from the directive principles. A living wage to a worker is therefore a constitutional expectancy explicit from the directive principles. 4.The Apex Court in (Crown Aluminium Works v. Their Workers)3, reported in A.I.R. 1958 S.C. 30, has held that in deciding the industrial disputes in regard to wage structure, one of the primary objectives is and has to be the restoration of peace and goodwill in the industry itself on a fair and just basis to be determined in the light of all the relevant consideration. At the same time, it was warned that no industry has right to exist unless it is able to pay its workmen at least a bare minimum wage. 5.In (Unichoye v. State of Kerala)4, reported in 1961(I) L.L.J. 631 , it was observed that the employers capacity to pay has no bearing in fixing the minimum wages of employee and such a consideration is antilogous to the principles enshrined within the Constitution of India. Again, in (Woolcombers of India Ltd. v. Woolcombers Workers Union another)5, reported in A.I.R. 1973 S.C. 2758, it was held that the minimum wage must be paid by the employer notwithstanding the want of financial capacity. Further in (Bakshish Singh v. Darshan Engineering Works others)6, reported in A.I.R. 1994 S.C. 251, it was ruled that there is one principle which admits no exception and that is, no industry has right to exist unless it is able to pay its workmen at least a bare minimum wage to maintain his enterprise without getting down the wages of his employees below even a bare subsistence or minimum wage, he would have no right to conduct his enterprise on such terms." 6.In Express Newspapers (Pvt.) Ltd. others v. Union of India others, reported in A.I.R. 1958 S.C. 578, it was held that the living wage should enable the wage earner to provide for himself and his family not merely the bare essentials of food, clothing and shelter but a measure of frugal comfort including the education for children, protection against ill-health requirements of essential social needs and a measure of insurance against more important misfortunes including the old age and that it is ideal to which our Social Welfare State has to approximate in an attempt to ameliorate the living conditions of the workers. It was further observed that the minimum wage must provide not merely for the bare subsistence of life but for the preservation of the efficiency of the worker and for that purpose the minimum wage must also provide for some measure of education, medical requirements and amenities. The fair wage was classified as the mean between the living wage and the minimum wage. 7.The growth of national economy and its progress depends upon the co-operation between the capital and labour. In achieving this objective, the industrial adjudication has to take into account several factors like comparability of the wages, productivity of trade and industry, cost of living, ability of the industry to bear the burden of payment of wages etc. In the absence of statutory guidelines, the Honble Supreme Court had to formulate wage fixation methodology and in the process has evolved industry-cum-region formula to be applied without ignoring the financial burden upon the employer. In Express Newspaper (Pvt.) Ltd. another v. The Union of India others, (supra), it was ruled that the fixation of wages has to be done on an industry cum region basis having due regard to the financial capacity of the unit under consideration, and the following principles were enumerated (i) that in the fixation of rates of wages which include within its compass the fixation of scales of wages also, the capacity of the industry to pay is one of the essential circumstances to be taken into consideration except in cases of bare subsistence on minimum wage where the employer is bound to pay the same irrespective of such capacity; (ii) that the capacity of the industry to pay is to be considered on an industry-cum-region basis after taking a fair cross section of the industry; and (iii) that the proper measure for gauging the capacity of the industry to pay should take into account elasticity of demand for the product, the possibility of tightening up the organisation so that the industry could pay higher wage without difficulty and the possibility of increase in efficiency of the lowest paid workers resulting in increase in production considered in conjunction with the elasticity of demand for the product-no doubt against the ultimate background that the burden of the increased rate should not be such as to drive the employer out of business. 8.In (Novex Dry Cleaners v. Its Workmen)7, reported in 1962(I) L.L.J. 271, the Apex Court while holding that in fixing a fair wage the capacity of the industry to bear the burden to pay wages is a very relevant and very important factor, observed that before fixing the wage structure, it is necessary that the Tribunal should examine the financial position of the company and come to a definite conclusion in that behalf, and for that purpose, it is necessary to compare the company with a comparable concerns in respect of their standing, the extent of the labour force employed by them, the extent of their respective customers and what is more important is a comparative study should be made of the profit and losses incurred by all such companies for same year prior to the date of the award, and this comparison should be disclosed from the award itself. The Apex Court further held that "it is well known that it fixing the wage structure on a fair basis, an attempt is generally made in assessing the additional liability imposed upon the employer by the new wage structure and trying to anticipate whether the employer would be able to meet it for a reasonably long period in future". 9.In (Workmen Hindustan Motors v. Hindustan Motors)8, reported in 1962(II) L.L.J. 352 , it was held that it was ordinarily desirable to have as much uniformity as possible in the wage scale of different concerns of the same industry working in the same region as the same puts similar industry more or less on equal footing in their production struggle. 10.In (French Motor Car Company v. Their Workmen)9, reported in 1962(II) L.L.J. 744 , it was held that so far as clerical staff and subordinate staff are concerned, it may be possible to take into account even those concerns which are engaged in different line of business, for the work of clerical and subordinate staff is more or less the same in all kinds of concerns. 11.In (Cinema Theaters v. Their Workmen)10, reported in 1964(II) L.L.J. 128, it was held that increase in the cost of living index over a course of nine years would be a change of circumstances justifying an upward revision of wage scales and dearness allowance. 12.In (Greaves Cotton and Co. 11.In (Cinema Theaters v. Their Workmen)10, reported in 1964(II) L.L.J. 128, it was held that increase in the cost of living index over a course of nine years would be a change of circumstances justifying an upward revision of wage scales and dearness allowance. 12.In (Greaves Cotton and Co. others v. Their Workmen)11, reported in A.I.R. 1964 S.C. 689, it was clarified that while applying the industry-cum-region formula, the stress should be on the industry part if there are large member of concerns in the same region carrying on the same industry, as in such cases the production costs being equal, likewise would be the competition and therefore the wages should be fixed on the basis of the comparable industry, viz. the industry of same kind. For that purpose, the wage scale prevalent in the comparable concerns carrying on the same industry in the region is to be considered. However, where the number of industries of the same kind in a particular region is small, it is the region part of the industry-cum-region formula which assumes importance. It has also laid down the details about the particulars which are to be considered for ascertaining the comparable concerns. 13.In (Ahmedabad Mills Owners Association etc. v. Textile Labour Association)12, reported in 1966(I) L.L.J. 1, it was clarified that while revising the wage scale, it should also take into account the problem of additional burden to be imposed on the employer and ascertain whether the employer can reasonably be called upon to bear such burden. Considering that the wage fixation has to be a long range plan, it was observed that it is necessary to examine carefully the financial position as well as the future prospects of the industry and, therefore, the points like, extent of profit earned by the industry, nature of demand which the industry expects to secure, the extent of burden and its gradual increase which the employer may have to face etc. should be taken into consideration while dealing with the problem of fixation of wages. should be taken into consideration while dealing with the problem of fixation of wages. 14.In (Filmstan (Private) Ltd. v. Its Workmen another)13, reported in 1966(I) L.L.J. 744 , while observing that in dealing with a claim for revision of wages which is generally complex and complicated, having regard to the categories of employees engaged in an industrial undertaking, industrial adjudication should not be content with making general observations, it was held that the Tribunal must examine the facts and figures relating to the financial position of the establishment concerned, compare the said position with the financial position of comparable concerns, and enquire as to what would be the total impact of the additional burden of the revised wage structure. It was also held that the failure of the Tribunal to adopt such a course would constitute serious infirmity in its approach. 15.In (Hindustan Antibiotics Ltd. v. Their Workman)14, reported in 1967(I) L.L.J. 114 , while highlighting the object of the industrial law being to improve the service conditions of the industrial labour so as to provide for them the ordinary amenities of life, and by that process, to bring about industrial peace which would in its turn accelerate productive activity of the country resulting in its prosperity, it was held that the principle of region-cum-industry, the doctrine that the minimum wage is to be assured to the labour irrespective of the capacity of the industry to bear the expenditure in that regard, the concept that fair wage is linked with the capacity of the industry, the rule of relevancy of comparable concerns, and the recognition of the totality of the basic wage and dearness allowance, all these factors should be borne in mind in the fixation of wage structure. It was also observed that the social and economic upliftment of the labour is important for securing industrial peace which is essential to increase national productivity and that the worker is interested in his pay pocket and if he if given reasonable wages, it is expected that a satisfied worker will contribute to the growth of the industry and ultimately the prosperity of the country. It was also ruled that if the doctrine of region-cum-industry is accepted, all the employees of industries of similar nature, irrespective of the character of the employers, will get a fair deal without any discrimination which will certainly be conducive to industrial development of our country. It was also ruled that if the doctrine of region-cum-industry is accepted, all the employees of industries of similar nature, irrespective of the character of the employers, will get a fair deal without any discrimination which will certainly be conducive to industrial development of our country. 16.In (Kamani Metals and Alloys, Ltd. v. Their Workmen)15, reported in 1967(II) L.L.J. 55 , it was held that the fixation or revision of scales of wages, pay, dearness allowance must not be out of tune with the wages, etc. prevalent in the industry or region, and that is always desirable so that unfair competition may not result between an establishment and another and diversity in wages may lead to industrial unrest. In attempting to compare one unit with another care must be taken that units differently placed or circumstanced are not considered as guides, without making adequate allowance for the differences and the same is true when the regional levels of wages are considered and compared. In general words, comparable units may be compared but not units which are dissimilar. While disparity in wages in industrial concerns similarly placed leads to discontent, attempting to level up wages without making sufficient allowances for differences, leads to hardships. 17.In (Purohit Purohit v. Sarva Shramik Sangh another)16, reported in 1968(II) L.L.J. 185, it was held by the Division Bench of this Court that the finding of the Tribunal that the company was in profit margin throughout and that the company had a good business potential and stability and its financial position could, therefore, be said to be fairly satisfactory could not justify the award and that in case of controversy as to the capacity of the industry to bear the burden of the additional increase, it was the bounden duty of the Tribunal to come to a definite finding whether the company was capable of bearing the additional burden and only if it was satisfied that it was financially capable of bearing such additional burden, there could have been a justification for the increase in wages. 18.In (Remington Rand of India Ltd. v. The Workmen)17, reported in 1969(19) F.L.R. 46, it was held that an employer is able to bear the burden is not criteria and that the foundation of the principle of industry-cum-region is that as far as possible there should be uniformity of the conditions of the service in comparable concerns in the industry-cum-region so that there is no imbalance in the condition of the service between the workmen in an establishment and those in the rest. The danger otherwise would be migration of labour to one where there are more favourable conditions from those where the conditions are less favourable. Therefore, it was held that mere fact that a particular concern can bear an additional liability would, by itself, be no ground to impose upon it such extra obligation. 19.In (Workmen of New Egerton Woollen Mills v. New Egerton Mills others)18, reported in 1969(II) L.L.J. 782, the law on the point was summarized while observing that two principle factors which must weigh while fixing or revising the wage scales are that, firstly, the wages prevalent in the establishment in question are to be compared with those given to the workmen of similar grade and scale by similar establishments in the same industry or in the absence of similar establishment in other industry in region and, secondly, it should ascertain as to what the wage scale the establishment in question can pay without any undue strain on its financial resources. 20.In (Polychem Limited v. R.D. Tulpule Industry Ltd., Bombay others)19, reported in 1972(II) L.L.J. 29 , it was observed that the ultimate object of the industrial adjudication in our country is to help the growth and progress of national economic and for releasing the object, the industrial disputes are settled on the principles of fairplay and justice, harmonizing the conflicting claims of capital and labour with full awareness of current socio economic trend of thought. Our industrial law is, therefore, expected to effectively secure to the workers conditions of service reasonably conducive to the improvement of their moral and material development. With these observations, it was held that "wage policy relating to workmen appears to be a complex and sensitive area of public policy. The reason is plain. Our industrial law is, therefore, expected to effectively secure to the workers conditions of service reasonably conducive to the improvement of their moral and material development. With these observations, it was held that "wage policy relating to workmen appears to be a complex and sensitive area of public policy. The reason is plain. The relative status of the workmen in the society, their commitments to the industries and their attitude towards the management, their motivation towards the productivity and their standard of way of life are all conditioned by wages. It is accordingly not purely the economic policy in which the employer and employee alone are interested. Besides, the workers and the management, the consumers and the society at large and a fortiori, the State are also vitally interested and no wage policy can ever be applied in vacuum in disregard of realities of the social and economic conditions in our country. Considering the question of wages in the background of directive principles enshrined in our constitution, a wage structure should serve to promote a fair remuneration to the labour to ensuring due social dignity and strengthen incentives to efficiency, without being unmindful of the legitimate interest and expectations of the consumer in the matter of prices. Guided by this principle, if the financial capacity of the industry permits, the workers should, broadly speaking, be allowed to their due share in the prosperity of the industry to which they have contributed by their labour, so as to enable them, within the reasonable limits, to improve their standard of living." After having held so, referring to the facts of the case before the Apex Court, it was ruled that the Tribunal had committed a serious error in not considering the other allowance and amenities which were allowed to the workmen and comparing their total wage packet with the total wage packet of those employees to whom allowance in question had been allowed while determining their question, and that the Tribunal had virtually decided the question in issue exclusively on the basis that the employer had financial capacity to stand the burden of such allowance being granted to the workmen at the same rate as higher staff with the same conditions. Further, it was observed that the difference between the amenities allowed to the workers and to the staff to whom the vacation allowance has been granted must in law and practice be looked into and the question then decided whether or not the workmens demand is justified. It was also held that the total wage production of various categories of the employees in the concerned industry including the question of their nature of duties and functions, however, deserves to be given primary importance so that there is no reasonable chance of heart burning and discontentment amongst the different categories of the workmen on account of differential treatment which though seemingly justifiable, may, in real effect, be discriminatory, and the importance of appropriate standards of wages in the concerned industry on proper consideration of the duties and functions of different categories of the employees must be kept in view in deciding such disputes. 21.In M/s. Woolcombers of India Ltd. v. Woolcombers Workers Union and another, reported in 1974(I) L.L.J. 138 , it was held that for fixing basic wage and dearness allowance, the industrial adjudication some times leans on the industry part of the industry-cum-region formula and at other times on the region part of the formula. The industry part is not applicable when the concern is the only concern in the region carrying on the particular business, whereas the region part requires that comparable concerns should nearly be similar to the line of business carried on by the employer before industrial adjudication. It was further held that in such adjudication, the Tribunal cannot rely merely upon the oral evidence and in dealing with the comparable character of an industrial undertaking the question is to be considered in light of material evidence and circumstances which generally proved by documentary evidence; what is the total capital invested by the concern, what is the extent of its business, what is the order of profit made, dividends paid, what is its standing in the industry to which it belongs, these and other matters have to be examined by the industrial adjudication in determining whether one concern is comparable with another in the matter of fixing wages. 22.In (Sangam Press Limited v. Workmen)20, reported in 1975(II) L.L.J. 125 , it was held by the Apex Court that it is well settled that while the question of capacity to pay is irrelevant in case of minimum wage, the matter of fair wage stands on different footings. In case of fair wage, besides the principle of industry-cum-region, the companys capacity to bear the financial burden must receive due consideration. The past performance of the company and the future prospects with a totality of the picture must be kept in mind by the adjudicator in deciding a dispute of this nature. 23.In (Killick Nixon Limited v. Killick Allied Companies Employees Union)21, reported in 1975(II) L.L.J. 53 , it was held that the question as to whether there should be any ceiling in the payment of dearness allowance should be viewed from the various aspects, including the wage scale prevalent in the company; the wage level prevalent in the industry and the region; the wage packet as a whole of each earner in the company with all amenities and benefits and its ability and potency to cope with the economic requirements of daily existence consistent with his status in society, responsibilities, efficiency at work and industrial peace; the position of the company in relation to other comparable concerns in the industry and the region; the pre-emptive necessity for full neutralisation of the cost of living at the rock- bottom of wage scale if at or just above the subsistence level; the rate of neutralisation which is being given to the employees in each salary slab; avoidance of huge distortion of wage differentials, taking into reckoning all persons employed in the concern; the degree sacrifice is necessary even on the part of the workers in general interest; the compulsive necessity of securing social and distributive justice to the workmen; the capacity of the company bear the additional burden; the interest of national economy; the repercussions in other countries and the society as a whole; the state of consumer price index at the time of decision; and forebodings and possibilities in the preseeable future as far as can be envisaged. It should also be borne in mind that the revisions of dearness allowance is not the same thing as decision or wage. It should also be borne in mind that the revisions of dearness allowance is not the same thing as decision or wage. While upholding the costs of the company that there had to be ceiling on the amount of dearness allowance, it was held that at what particular amount it should impose the ceiling and the manner in which it should be imposed is a matter to be gone into by the Tribunal keeping in view the various principles, and the financial capacity should be judged with regard to the commitment of the company as a whole towards all its employees. 24.Dealing with the issue of dearness allowance, the Apex Court in Hindustan Antibiotics Ltd. (supra) while rejecting the argument that merger of dearness allowance with the basic wages and linking the dearness allowance both with the wage and index for the city would result in giving dearness allowance on the dearness allowance, it was held that in India, instead of increasing wages as it was done in other countries, dearness allowance is paid to neutralise the rise in prices and that this process was adopted in expectation that one day or other we would go back to original price level, but when it was found that it was only a vain hope or, at any rate, it could not be expected to fall below a particular mark, a part of the dearness allowance was added to the basic wages, that is to say, the wages to that extent were increased and that therefore in such cases, it could not be said to be paying dearness allowance on the dearness allowance, but it was only a payment of dearness allowance in addition to the increased wages. Referring to the facts of the case before the Apex Court, while approving the observation of the Tribunal to the effect that "............... in linking the dearness allowance, a portion of which has been merged in the basic wage, the totality of emoluments should not be ignored, otherwise in the case of a marked increase in the cost of living, if the linkage is done without bearing in mind the total emoluments, the total emoluments would not be satisfactory and may even become out of line with those in other large concerns in the region. Again the linkage need not be done so as to provide increase in dearness allowance at uniform rate. Again the linkage need not be done so as to provide increase in dearness allowance at uniform rate. Otherwise increase in dearness allowance on account of rise in the cost of living for employees drawing wages and salaries above certain ranges of basic wage or pay as would vary inadequately neutralize the rise in cost of living." It was observed that "it is, therefore, clear that the Tribunal increased the wages of the lower category of employees by adding part of the dearness allowance to their original basic wages, at the same time bearing in mind that the total packet of wages and dearness allowance compared favourably with those in similar concerns. It has introduced the slab system so that in the case of employees falling in the higher slabs, the rise in prices is adequately neutralized." 25.In (Biddle Sawyer Ltd. v. Chemical Employees Union another)22, reported in 2003(5) Bom.C.R. (O.O.C.J.)125, considering the peculiar facts of the case in the matter before the Court, the learned Single Judge of this Court had observed that the financial capacity of the employer being available to bear the burden cast by the Award, there was no case for interference in the award passed by the Tribunal merely because there is no positive finding that M/s. Duphar Interfran Ltd. is comparable concern even though the Tribunal has awarded the conditions of service which were on par with those of the said concern, as a reading of the award as a whole disclosed that the Tribunal had not transgressed the parameters laid down by the Apex Court for wage fixation. 26.Precise recapitulation of above referred judicial pronouncements would clearly reveal that in the matter of application of industry-cum-region formula, the comparison of wage scales should be in relation to the similar concerns in the region and generally speaking similar concerns would be those in the same line of business, and the exception to this rule of similarity is in the case of employees like the clerical staff, drivers, peons, etc. Indeed, the Apex Court in French Motors case, while dealing with the class of employees consisting of drivers, sweepers, peons, clerks, godown-keepers, typist and stenographers, and referring to the earlier decision in (Lipton Ltd. v. Their Workmen)23, reported in 1959(I) L.L.J. 431 , it was held that it may be possible to take into account even those concerns which are engaged in an entirely different line of business, for the work of the employees of that class is more or less similar in all the concerns. However, this exception is related only to the extent of dissimilarity in the concerns in the matter of comparison while applying the said formula of industry-cum-region and it does not extend or relate to exemption from comparison itself or from the obligation to apply the said formula. In other words, even in case of such employees, the said formula applies, but with the modification as specified in the matter of French Motors case. Being so, in case of fixation of wage structure of the clerical staff, the comparable concerns need not be an industry in the same line of business, nevertheless there has to be comparison done before arriving at any final decision relating to the revision of the wage structure. Certainly, the comparison spoken of, is not mere reproduction of the phraseology from the judicial pronouncements by the Supreme Court or the High Court or the reported decisions, nor mere observation that the materials on record on comparison justify the demand for increase in wages nor it is mere retualistic recitation of the said formula or the principles but there has to be proper analysis of the materials on record relating to such comparability and such analysis should be reflected in the award itself. Application of mind to all the materials on record in that regard must be apparent on the face of it. Of course, it is not the quantity of the contents of the award but the qualitative appreciation of the evidence should be revealed from the award. 27.Besides the applicability of the principles of industry-cum-region, the revision of wage structure cannot be done without considering the companys capacity to bear the financial burden resulting from such revision of wages. Of course, it is not the quantity of the contents of the award but the qualitative appreciation of the evidence should be revealed from the award. 27.Besides the applicability of the principles of industry-cum-region, the revision of wage structure cannot be done without considering the companys capacity to bear the financial burden resulting from such revision of wages. It is a very relevant and important factor to be considered before deciding about the revision of wage structure pursuant to the demand for increase in wages by the employees of a company. The Tribunal has to assess the additional liability which will be imposed upon the employer by the new wage structure and try to anticipate whether the employer would be able to bear the same for a reasonably sufficient period in future, otherwise the whole exercise by the Tribunal could result in futility as was held in Novex Dry Cleanerss case (supra). In fact, the Tribunal has to examine facts and figures relating to the financial position of the establishment concerned, compare the same with that of comparable concerns, and assess the total impact of the additional burden of the revised wage structure. Failure of the Tribunal to adopt such a course may constitute serious infirmity in its approach and unpardonable breach of procedure rendering its award to be bad in law, as was held in Filmstans case (supra). As Ruled by the Apex Court in Ahmedabad Mills Owners Associations case (supra), the Tribunal dealing with the problem of wage fixation or wage revision must carefully examine the financial position of the employer and in that regard try to ascertain the progress of the industry in question, its prospects in future, whether the industry is making profit, and if so, the extent of profits, the nature of demand which the industry expects to secure and the financial burden that the industry will have to bear consequent to wage revision, including its gradual increase which the employer may have to face; these and similar other considerations are to be carefully weighed before the proper wage structure is reasonably considered in an industrial adjudication. In fact, the decision in Indian Expresss case (supra) is clearly to the effect that merely because the company has made profits for some years continuously that by itself would not be sufficient to conclude that its financial position is good or that therefore it can bear the financial burden. The Division Bench of this Court in Purohit Purohits case (supra) has further clarified the same. 28.It is the contention of the petitioner that the award has been passed ignoring the principles of industry-cum-region as well as the financial capacity of the employer to bear the additional burden. The Tribunal did not even calculate the burden upon the petitioner company while granting several demands of the employees, nor ascertained the prevailing wage structure and conditions of service in similar industries in region laments the petitioner. The demands of the employee have been accepted and approved without application of mind and without any proof in support of grant thereof and the contention of absence of revision of pay since 1990 has been mechanically accepted as sole justification for allowing the demands of the employees, contends the petitioner. It is further contended that the Tribunal has failed to consider that the burden of proof in relation of demands was upon the employees and, therefore, erred in presuming the failure on the part of the petitioner in deciding the claim of the employee while granting revision of pay. The fact that during the intervening period, there had been two settlements giving rise of Rs. 550/- per month was not considered while passing the award. Further the Tribunal failed to appreciate that with the rise in dearness allowance, increase in cost of living, conveyance, education, etc. are always taken care of and, therefore, there was no justification for giving higher HRA and education or local conveyance allowance. According to the petitioner, the Tribunal erred in giving retrospective effect to the wage laid down without any justification and the same warrants interference by this Court. 29.The basis for revision of wage, as disclosed from the impugned award are that after settlement of 1990, there has been no revision of wage of the employees concerned though the service conditions of factory employees as well as the other establishment of the company have been revised twice in the decade on an average giving rise of Rs. 29.The basis for revision of wage, as disclosed from the impugned award are that after settlement of 1990, there has been no revision of wage of the employees concerned though the service conditions of factory employees as well as the other establishment of the company have been revised twice in the decade on an average giving rise of Rs. 550/- per month to those employees; that considering the nature of the work done by the employees concerned, the wage scale of similar employees presently in other concerns, though engaged in different line of business is to be considered by applying the law laid down by the Apex Court in French Motors case; that there is no submission on behalf of the company that the basic scale demanded by the employee is excessive or exaggerated in any manner; that the Consumer Price Index was 654 when charter of demand was served in the year 1986 and the same was 1254 when the last settlement expired in March, 1992 and it reached to 2478 in March, 2000; though the Consumer Price Index increased four times, there has been no revision in the wages except annual increment; that there is continuous rise in the cost of living, and the revision in basic scale of pay shall be linked with the consumer price index at 1234/-; that the union has filed on record a settlement with other industries group whereunder the wages of the employees of similar category performing similar work had been revised; that no evidence has been produced by the company to disprove the claim of the employees; and that the chart of annual gross profit and reserve and surplus since 1990-91 to 1998-99 prepared by the Union on the basis of the balance sheet which is not disputed by the company, and the same discloses the financial position of the company to be good and therefore, the company is capable of bearing reasonable additional financial burden; that the financial position of the company has been continuously improving after 1990 onwards; and that it is not even the case of the company that it has no financial capacity to bear burden of demands involved in the reference. In short, the wage structure has been revised on five grounds, namely absence of revision of wage since 1990, increase in consumer price index, the settlement with other industries whereunder the wages of employees of category performing similar work were revised, the profit earned by the company disclosed upward trend since 1990-91 onwards and no evidence was produced by the company to disprove the claim of workmen. 30.On application of the law laid down by the judicial pronouncements above referred to the facts of the case in hand and the matter in issue, while perusing the impugned award, it is apparent that the Tribunal was fully award of the need of application of industry-cum-region formula in the matter of wage fixation as also the modified form of the said formula in cases of fixation of wages pertaining to the class of employees consisting of clerks, peons, drivers, typist and stenographers, etc. The Tribunal while disclosing awareness of need of application of industry cum region formula in the matter of fixation of wage structure, referring to the decision of the Apex Court in French Motors case, has held that for fixing the wage scale of similar employees prevailing in other concerns, though engaged in different lines of business can be taken into consideration, since the nature of work done by such employees is practically the same, irrespective of different area and different nature of business. The Tribunal, however, instead of following the said formula, has strongly adopted a short-cut method, not only unknown to law but which is prohibited by law, and that too, with the full knowledge that such an exercise is not permissible. 31.As regards the revision of basic wages and the scale of wages, the same have been granted as per the demands, not on comparison of the same and the prevailing scale with the comparable concerns either adopting the formula of industry-cum-region as specified in Indian Expresss case and other cases referred to above or even by applying the law laid down by the Apex Court in that regard in French Motors case, but merely on the ground that there is no submission on behalf of the petitioner company that the basic scales of pay demanded by the employees is excessive/exaggerated in any manner and holding that it is linked with the concerned price index 1234. Certainly the finding about absence of submission on behalf of the petitioner company regarding the demand of the basic wage being neither excessive nor exaggerated cannot be the basis or criteria for revision of wage structure in terms of demands by the employees of a company. This is totally perverse approach on the part of the Tribunal, considering the well established principles of law settled by catena of decisions in relation to the procedure to be followed in the matter of wage fixation and revision thereof. The finding that the revision is related to the price index is also not sufficient to justify the revision of wage structure on par with the demands by the employees. The Tribunal is duty bound to apply the well established principles of law to the facts of the case and accordingly decide the question of revision of wage structure. Undoubtedly, the price index may justify the upward revision of wages but it may not be sufficient to justify the extent of increase in the wage structure on par with the demand by the employees. The same has to be arrived at after applying the well established formula, and not by arbitrary method, or on mere unwarranted assumptions or on account of absence of submission by the employer. In fact, the wage structure can neither be fixed nor revised merely on the basis of submissions by the employer or in the absence thereof, but the whole exercise has to be on the basis of factual foundation laid down by the parties and the materials produced in support thereof and it can never be allowed to be an imaginary and fanciful expedition. In the circumstances, the finding relating to revision of basic wage and fixation of wage structure cannot be sustained and is liable to set aside. 32.Considering the revision in the basic wages and in the wage scale being set aside, entire award will have to be set aside and the matter will have to be remanded for fresh consideration and decision. However, setting aside of the entire award is justified and necessary for more than one reason. 32.Considering the revision in the basic wages and in the wage scale being set aside, entire award will have to be set aside and the matter will have to be remanded for fresh consideration and decision. However, setting aside of the entire award is justified and necessary for more than one reason. One of them being that, bare perusal of the impugned award discloses that various demands which have been allowed, are granted mainly on the ground that the petitioner company has either failed to disprove the claim or that only defence raised by the petitioner company was that there was possibility of creation of industrial unrest if the demands are granted and it was not even the case of the company that it has no financial capacity to bear the burden of demands. In other words, the Tribunal has erred in ignoring the well established principles of law and the said formula while dealing with the matter pertaining to the revision of wage structure and has acted illegally, arbitrarily and in breach of procedure in granting the relief in terms of demands. 33.Considering the law laid down by the Apex Court on the point of need to ascertain the financial burden upon the employer before the revision in the wage structure, if one peruses the impugned award, it cannot be disputed that the Tribunal has arrived at the finding of capability of the petitioner company to bear a reasonable additional financial burden. The said finding however, has been arrived at on the basis of figures regarding gross profit as well as reserves and surplus of the company disclosed from the chart prepared by the respondent union. Undisputedly, the chart was prepared by the union solely on the basis of balance sheets of the company for the relevant years. It is also true that said finding precedes the observation by the Tribunal to the effect that oral and documentary evidence reveal the financial position of the company to be good. However, it does not disclose any particulars of such oral or documentary evidence nor the award specifically refers to any piece of so called documentary or oral evidence except the said chart prepared by the union. Undoubtedly, the chart reveals upward trend in gross profit to the company till the year 1995-96 but not thereafter. However, it does not disclose any particulars of such oral or documentary evidence nor the award specifically refers to any piece of so called documentary or oral evidence except the said chart prepared by the union. Undoubtedly, the chart reveals upward trend in gross profit to the company till the year 1995-96 but not thereafter. In fact, the chart discloses about 35 per cent reduction in the gross profit in the years 1997-98 as well as in 1998-99 in comparison with the gross profits which were earned in the year 1996-97. The gross profits in the year 1996-97 are shown to have been reduced by 20 per cent in comparison with the previous year 1995-96. Apparently, though the gross profits disclose upward trend till 1995-96, the chart reveals downward trend since 1996-97. Being so, the finding of the Tribunal that the financial position of the company is good and is capable to bear additional financial burden solely on the basis of such chart clearly discloses failure on the part of the Tribunal to exercise its jurisdiction in the manner it ought to have exercised as well as very casual approach which reveals non-application of mind and breach of procedure, rendering the award to be bad in law. 34.There is also an observation in the award that it is not even the case of the petitioner company that it has no financial capacity to bear the burden of the demands of the employees. The said finding is, as rightly submitted by the learned Advocate for the petitioner, totally contrary to the materials on record. In fact, the specific defence raised by the petitioner company before the Tribunal was that "demands are not only beyond the capacity of the company, but are also unreasonable and unjustified and beyond any proportions." With the said defence, it was also the contention of the petitioner company before the Tribunal that "any revision in service conditions of these workmen will have an effect on the remaining workmen/staff" and that "looking to the prospect of the industry in future, the extent of the burden and its gradual increase which the industry may have to face, what is demanded by the Union is neither reasonable nor justified" and further that the resultant burden is beyond the financial reach of the company. Further, the cross-examination of Unions representative discloses that when he was shown Exhibit V-7 disclosing the financial burden which the company will have to face in case of acceptance of demands by the Union, the representative was not able either to confirm or deny the contents thereof. Beside the representative of the petitioner company in his testimony, after giving necessary details of the financial position of the company, had categorically stated that the company has no bright future to accept the liability of the demand by the union. Further the Tribunal itself while referring to the defence of the company, in para 57 of the impugned award has noted that "it is stated that additional financial burden, which is likely to be imposed as a result of the demands for 8 workmen is about Rs. 17 lakhs and net additional burden in respect of 24 workmen comes to about Rs. 38 lakhs. It is stated that it will file burden statement, what is not only beyond the capacity of the company, but are unreasonable." Being so, the finding of the Tribunal that it is not even the contention of the petitioner company that it has no capacity to bear the financial burden of demands is contrary to the materials on record and perverse, and cannot be sustained. 35.It has also been held by the Tribunal that "it is pertinent to note that in the pleadings as well as in the evidence, it has been brought on record from the side of the second party Union that the financial burden of the first party company is sufficiently good." It is not the financial burden which has to be good but it is the capacity to bear the additional burden arising from wage revision that is required to be considered and for that purpose overall financial position of the employer must be good. Neither this aspect has been appropriately considered nor the award discloses any piece of evidence or pleadings, except the gross profit chart referred to above, having been considered to decide the issue relating to the financial position of the company. In fact, there has been not even an attempt made on the part of the Tribunal to ascertain the extent of financial burden which the company will have to face consequent to wage revision while approving and accepting the demands of the employees in relation to wage revision. In fact, there has been not even an attempt made on the part of the Tribunal to ascertain the extent of financial burden which the company will have to face consequent to wage revision while approving and accepting the demands of the employees in relation to wage revision. 36.As regards the point relating to the burden of proof, it is to be noted that the functions and duties of the Industrial Tribunal are akin to those of a body discharging judicial functions, although it is not a Court. Though the powers of the Tribunal are different from those of an ordinary Civil Court, it essentially discharges its duties and functions as a judicial body. Undisputedly, the procedure relating to the evidence before the Tribunal is also on par with that before the Civil Courts. Evidence can be recorded either before the Tribunal or on affidavit, but in case of affidavit, the opposite party is entitled to cross-examine each of the deponents. The Rules framed specifically provide that the procedure as prescribed under Rule 5 of Order XVIII of the Code of Civil Procedure to be followed. Undisputedly, the provisions of Evidence Act of 1872 are not strictly applicable to such proceedings before the Tribunal. Nevertheless, the principle behind those provisions in the Evidence Act will have to be borne in mind while recording technicalities which may at times pervert and frustrate the legitimate right of a bona fide litigant before a Civil Court, cannot act being pernicious or perilous either to production of evidence by the parties before the Tribunal or for proper appreciation of the evidence by the Tribunal. Though scrupulous adherence to the provisions of the Evidence Act is not required in the proceedings before the Tribunal, it is also not expected to sacrifice the Rules of prudence and logic. At the same time, in the absence of reasonably sufficient material on record in support of the claim of a party, the Tribunal is not expected to grant the relief to the party merely on fanciful assumptions or imaginary stories or on mere guess work. Certainly, therefore, the party desiring to have favourable result should comply with his or her obligation in the matter of production of the material in support of his or her case. Certainly, therefore, the party desiring to have favourable result should comply with his or her obligation in the matter of production of the material in support of his or her case. In this respect, one cannot forget the ruling of the Apex Court in (State of Haryana another v. Rottan Singh)24, reported in A.I.R. 1977 S.C. 1512 wherein it was held that there is no allergy to hearsay evidence provided it has reasonable nexus and credibility, but it is equally true that departmental authorities and administrative Tribunals must be careful in evaluating such material and should not glibly swallow what is strictly speaking not relevant under the Indian Evidence Act. Further, it was held that the essence of a judicial approach is objectivity, exclusion of extraneous materials or considerations and observance of Rules of natural justice; of course, fairplay in the basis and if perversity on arbitrariness, bias or surrender of independence of judgment vitiate conclusions reached, such finding even though of a domestic Tribunal, cannot be held good. 37.As regards most of the demands, including the claim relating to dearness allowance, which have been granted by the impugned award, have been so allowed mainly on the ground that the petitioner company has not disproved those claims or that the company has not produced any materials on record to disclose the said demands being excessive or non maintainable and that in the absence of such materials, the demands being reasonable and that therefore, deserve to be granted. As already observed above, the burden to justify the demands and to prove the same by facts and figures primarily lies upon the person who putforth the demands and only on discharge of such burden, the onus thereupon shifts to the employer to disprove the claim of the employee and not otherwise. No material has been referred to in the award as having been produced by the employees in relation to such demands, and hence there was no occasion for the petitioner company to produce any material in opposing the demands. Albeit, as far as the defence of the petitioner company was concerned, it was for the company to establish the same. At the same time, it is not to be forgotten that the weakness in the defence of the employer, cannot be the sole basis for the grant of relief to the employees. Albeit, as far as the defence of the petitioner company was concerned, it was for the company to establish the same. At the same time, it is not to be forgotten that the weakness in the defence of the employer, cannot be the sole basis for the grant of relief to the employees. The findings in the matter in hand are, therefore, not borne out from the records and, therefore, are not maintainable. For the reasons stated above, the decision in Biddle Sawyers case is of no help to the respondent to justify the impugned award. 38.The point relating to retrospective applicability of wage revision has been raised on the basis of the facts of the case. The power of the Tribunal to give retrospective effect to such wage revision in a deserving case is not in dispute. The contention of the petitioner is that since after submission of demands in the year 1992, the Union and/or the employee concerned did not pursue the matter till 1996, there was no justification to give effect to the revision of wages from 1st April, 1992, whereas it is the contention of the respondent that the M.O.U. dated 25th July, 1990 clearly provided that any revision after March, 1992 was to be effective from April, 1992. However, the contention is sought to be countered by contending that the M.O.U. dated 25th July, 1990 ceased to be in force and binding upon the parties as the subsequent settlement before dated 13th September, 1990 incorporated all the terms of the M.O.U. dated 25th July, 1990 except the clause relating to settlement beyond March 1992 and therefore based on the said clause in the M.O.U., there was no justification to give effect to the wage revision from 1st April, 1992. The relevant Clause No. 6 of the M.O.U. dated 25th July, 1990 reads thus :- "That the period of this settlement shall be till 31st March, 1992 AND That any settlement reached between the parties thereafter shall be made effective from 1st April, 1992." Apparently, it was clearly agreed in the said M.O.U. that the settlement under said M.O.U. was to be effective till 31st March, 1992 and any settlement thereafter be operative from 1st April, 1992. But the contention raised is that since subsequently the settlement which was arrived at in terms of the said M.O.U. and executed in writing on 13th September, 1990 did not incorporate second part of the Clause 6 but it was specifically excluded and the said exclusion discloses that the parties did not to insist for the subsequent settlement to be effective from 1st April, 1992. The contention is devoid of substance. Admittedly, the settlement dated 13th September, 1990 was in accordance with the M.O.U. dated 25th July, 1990 and for the period upto 31st March, 1992. It was not relating to the period after March, 1992 but was specifically till the expiry of March, 1992. Being so, there was no occasion for incorporating in the said settlement, any provision relating to the period beyond 31st March, 1992. In this regard, it is pertinent to note Clause 7 of M.O.U. dated 25th July, 1990, which reads thus :- "That based on above terms, settlement on the demands raised by the Union shall be separately signed between the parties." In fact, the settlement dated 13th September, 1990 was signed by the parties in accordance with the said Clause No. 7. The said clause clearly referred to the execution of settlement in writing in relation to the demands settled for the period upto 31st March, 1992. Being so, there was no occasion for inclusion of something pertaining to the period beyond 31st March, 1990 in such settlement. Besides, the agreement that the settlement which may be arrived at after 31st March, 1992 shall be effective from 1st April, 1992 was already arrived at under the M.O.U. dated 25th July, 1990. Being so, no fault can be found for giving effect to the wage revision from 1st April, 1992. Beside, admittedly there has been no revision of wages after 1990 and definitely for the period from 1st April, 1992 onwards. 39.The fall out of the above discussion is that the absence of revision of wage since 1990 and increase in the consumer price index would undoubtedly justify the upward revision of wage structure, but the same cannot be sufficient to decide the extent to which the same can be revised. The settlements with other industries are certainly of importance in deciding the wage structure but the same can be only on application of the well established formula stated above and not otherwise. The settlements with other industries are certainly of importance in deciding the wage structure but the same can be only on application of the well established formula stated above and not otherwise. Similarly, the gross profit of the company, properly ascertained on the analysis of the materials on record is a relevant piece of evidence in deciding the financial position of the company but the matter does not end there. It is necessary to ascertain the capacity to bear the burden of the additional financial liability before accepting the demands of the employee. Mere failure on the part of the employer, in the absence of the materials at the instance of the employees being placed before the Tribunal and without there bring application of well established formula, mere failure on the part of the employer to lead evidence by itself cannot be a justification to grant the demands of the employees. There has to be proper analysis of all materials on record, bearing in mind the above referred rulings and their proper application while deciding about the revision of wage structure and the Tribunal in the case in hand having failed miserably in that regard, the impugned order cannot be sustained and is liable to be set aside and the matter to be remanded to the Tribunal to decide the same a fresh after hearing the parties and in accordance with the provisions of law and bearing in mind the observations hereinabove. It is, however, made clear that all the issues, except the issue regarding the liability of the petitioner company to revise the wage structure from 1st April, 1992, are kept open. To what extent the revision of the wages should be from 1st April, 1992 is to be decided by the Tribunal after hearing the parties; the issue in that regard is also kept open. If necessary and/or appropriate the Tribunal can also call for further evidence and/or allow the parties to place on record further materials to assist the Tribunal to arrive at just decision. If necessary and/or appropriate the Tribunal can also call for further evidence and/or allow the parties to place on record further materials to assist the Tribunal to arrive at just decision. 40.In the result, except the finding regarding retrospective applicability of the revision of wages from 1st April, 1992 as stated above the impugned award cannot be sustained and excluding the said finding on retrospective applicability of revision of wages, the impugned award is hereby quashed and set aside and the matter is remanded to decide the same afresh after hearing the parties and in accordance with the provisions of law and bearing in mind the above observations within a period of eight months from the receipt of the writ of this Court. Meanwhile, the payment of wages as was directed to be made by order dated 12th February, 2002 in this petition shall not be discontinued till the decision of the Tribunal pursuant to the remand of the matter. The payment to be made accordingly, shall be subject to adjustment in accordance with the Award to be passed by the Tribunal pursuant to the remand of the matter. Rule is made absolute in above terms with no order as to costs. Petition partly allowed. -----