01 March 1977
Supreme Court
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STRAW BOARD MFG. CO LTD. Vs THE WORKMEN

Bench: KRISHNAIYER,V.R.
Case number: Appeal Civil 1539 of 1970


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PETITIONER: STRAW BOARD MFG. CO LTD.

       Vs.

RESPONDENT: THE WORKMEN

DATE OF JUDGMENT01/03/1977

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. SINGH, JASWANT

CITATION:  1977 AIR  941            1977 SCR  (3)  91  1977 SCC  (2) 329

ACT:             Gratuity--Qualifying  period of service and  calculation         of amounts--Tests for determination.

HEADNOTE:             In an industrial dispute between the appellant mill  and         its workmen relating to the payment of gratuity, the  Indus-         trial Tribunal framed a gratuity scheme and gave the  neces-         sary guidelines for its implementation.  Special  leave  was         granted to the appellant by this Court on the limited  ques-         tion whether the correct principles on which gratuity should         be payable had been followed in this case or not.  Since the         making  of the award, the Payment of Gratuity Act, 1972  was         passed,  which, by s. 4(5) gave an option to the workers  to         choose  between the gratuity scheme under the award and  the         one under the statute.  The workers, however, did not put in         their appearance in this Court.             It  was  contended on behalf of the appellant  that  the         qualifying   period of service for earning gratuity was  ten         years  and  for calculating the  amount  of  gratuity  basic         wages without adding dearness allowance should be the  basis         as laid down by some decisions of this Court and the  tribu-         nal  was wrong in holding 5 years as the qualifying  service         and  basic  wages and dearness allowance as  the  basis  for         calculating the amount of gratuity.             HELD: There is nothing fundamentally flawsome in the  5-         year  period  being fixed as the  qualifying  service.   The         Tribunal  was  realistic in fixing the  period  of  eligible         qualifying service as continUoUs service counted with refer-         ence  to  the completed years as defined in s. 2(c)  of  the         Act.  [100 C&F]             (1) In some cases, this Court highlighted the view  that         the  determination of gratuity is not based on any  definite         rules  and each case must depend upon the prosperity of  the         concern, the needs of the workmen and the prevailing econom-         ic  conditions examined in the light of the auxiliary  bene-         fits which the  workmen may get on determination of  employ-         ment.   It  was  also held that stability  of  the  concern,         profits made ’in the past, the future prospects and capacity         should  be  the relevant circumstances  which  the  Tribunal         should   take  into  account  in giving its  award.   Awards         are’ given on circumstances peculiar to each dispute and the

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       Tribunals are, to a large extent, free from the restrictions         of  technical considerations imposed on courts.   In  short,         the  approach  of  the  Tribunal should be what may  be  de-         scribed  as  its  legal hunch or  horse-sense.   Cases  like         Gaziabad  Engineering  Co. accept the position  that.  while         gratuity  is  usually related to the basic wage, a departure         may be made by relating it to the consolidated wage if there         be  some  strong evidence   or   exceptional   circumstances         justifying  that  course.  The real reason  why  some  cases         like   British   Paints required a qualifying period  of  10         years was that a longer minimum period for earning  gratuity         in  the  case of voluntary retirement or  resignation  would         ensure  that workmen did not leave one concern  for  another         after  putting in the short minimum service  qualifying  for         gratuity.   But current conditions must control  the  Tribu-         nal’s  conscience  in finalizing the terms of  the  gratuity         scheme.  Colossal unemployment at all levels of  workers  in         the  country  today means that a worker will not  leave  his         employment  merely  because  he has  qualified  himself  for         gratuity  In an economic situation where there is a glut  of         labour  in  the market and unemployment stares  the  working         class in the face it is theoretical to contend that  employ-         ees will hop from industry to industry unless the qualifying         period  for earning gratuity is raised to 10 years.  [98  H;         99D; lOO A, D, E, F.]             (2) Wages will mean and include basic wages and dearness         allowance and nothing else.  This corresponds to s. 2(s)  of         the  Act.  Some of  the  decisions refer to basic wages  and         others to consolidated wages as  the  foundation  for         92         computation  of gratuity.  These are matters  of  discretion         and the "feel" of the circumstances prevalent in the  indus-         try  by  the Tribunal and, unless it has gone wrong  in  the         exercise  of its discretion the award should stand.  In  the         Payment of Gratuity Act also it is not basic wages but gross         wages  inclusive of dearness allowance which had been  taken         as the basis.  [101 B; 100 G-H]             Delhi Cloth & General Mills Co. v. Workmen & Ors. [1969]         2   SCR  307, British Paints [1969] 2 SCR  523,  Hydro-Engi-         neers [1969] 1 SCR 1.56, Hindustan Antibiotics, [1967] 1 SCR         672,  Bengal Chemical & Pharamaceutical Works  Ltd.,  [1959]         Suppl.  2  SCR 136, Gaziabad Engineering Co., [1970]  2  SCR         622   and Calcutta Insurance Co. Ltd. [1967] 2 SCR  596  re-         ferred to.

JUDGMENT:             CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1539   of         1970.             (Appeal by Special Leave from the Award dated 1/31-10-69         of  the  Industrial  Tribunal Allahabad in  Ref.  No.  20/58         ’published in the U.P. Gazette dated the 10th Jan. 1970).         I. N. Shroff, for the appellant.         P.H. Parekh, for the respondent.         The Judgment of the Court was delivered by.             KRISHNA  IYER, J.--A dispute between the appellant  mill         (the Strawboard Manufacturing Company Ltd) and its  workmen,         regarding  a scheme of gratuity, was referred to the  Indus-         trial  Tribunal,  way back in February 1958,  and,  long  19         years later, this Court  is  pronouncing on the validity  of         the  award  made by the Tribunal in favour of  the  workmen:         Small wonder the respondent workmen,  after  this tiring and         traumatic  tantalization, have not turned up to argue  their         cause,  although Shri Parekh, as amicus curiae,  has  filled

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       the  gap. Such an unhappy and not infrequent  phenomenon  as         considerable  delay  in adjudication and  implementation  is         destructive  of  industrial peace and productive  of  disen-         chantment with labour jurisprudence. Naturally, even consti-         tutional provisions and governmental decisions about  labour         and  concern  for its welfare cease to achieve  the  desired         goals  when the legal process limps and lingers  and  rights         turn  illusory’  when remedies prove elusive.  The  life  of         rights  is  remedies and  a jurisprudence of  ready  reliefs         alone can inhibit the weaker numbers     of our land  asking         the  disturbing question: ’Is Law Dead ?’. Dicey wrote  long         ago:                         "The  saw  ubi jus  ibi  remedium,   becomes                       from  this point of view something  much  more                       important  than a mere  tautological  proposi-                       tion.  In its bearing upon constitutional law,                       it  means  that the  Englishmen  whose  labors                       gradually  formed the complicated set of  laws                       and  institutions which we call the  Constitu-                       tion,  fixed their minds far more intently  on                       providing  remedies  for the  enforcement   of                       particular  rights  or for  averting  definite                       wrongs,  than  upon any  declarations  of  the                       Rights of Man or Englishmen."             (Jurisprudence  of Remedies: University of  Pennsylvania         Law Review, Vol. 117, Nov. 1968. p.l, 16).         It  is more than rhetoric to say that courts belong  to  the         people.         93             ’Judges  occupy  the public’s bench  of  justice.   They         implement the public’s sense of justice’.  If the Courts are         the  fulcrum of the justice-system, there is a  strong  case         for  the reform of Court methodology and bestowal of  atten-         tion  on  efficient management of  judicial  administration.         Otherwise, the courts may be so overloaded or  so mismanaged         that  they grind to a halt and citizens’ exercise  of  their         rights  discouraged  or frustrated.   The vital  aspects  of         the  jurisprudence of remedies include speeding the pace  o[         litigation  ’from  the cradle to the grave’.  We are  reluc-         tant to make these self-critical observation’s about putting         our  house in order, but when the consumers of justice  like         workmen  lose interest in the judicial process and  are  ab-         sent, legislative unawareness of research and development as         to  the needs of courts and simplification and  acceleration         of  the  judicative  apparatus become  matters  of  national         concern.  Law’s delays are in some measure, caused by legis-         lative inaction in ,making competent, radical change in  the         procedural laws and sufficient financing and modernising  of         the justice system as a high priority programme.             The chequered career of this lis and its zigzag climb up         the precipice of justice contextually deserves brief  narra-         tion.   The order of reference was made early in  1958,  the         usual processual exercise before the Tribunal resulted in an         award on May 1, 1958 where  the tribunal refused the  relief         bearing on  gratuity.  The  disappointed workers  challenged         the award before the High Court which set it aside in Novem-         ber  1963--too  long a hibernation in the High Court  for  a         labour  dispute where prompt adjudication is the essence  of         industrial  peace.  Anyway, when the case came back  to  the         tribunal,  its decision took another six  inscrutable  years         and, on October 31,  1969 a fresh award was made  whereunder         the  tribunal framed a gratuity scheme and gave  the  guide-         lines  thereof.  This time the appellant mill straight  came         to  the  Supreme  Court with the present  appeal  for  which         special  leave  was granted in a limited way, in  the  sense

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       that  it was confined to the question ’whether  the  correct         principles  on which’ gratuity should be payable  have  been         followed in this case or not.  It is a fact, though unfortu-         nate,  that this labour litigation arrived in this Court  in         1970 but its final chapter is being written by this judgment         only  in  1977.   And it is noteworthy that  the  facts  are         brief, the legal issues small, the arguments brief and  this         judgment,  but  for  general  observations  and  traditional         reference  to  rulings  cited at the bar,  could  have  been         judiciously abbreviated.             The  main  battle at the bar has been over  the  correct         principles  in a scheme of gratuity for factory workers  and         further  whether  those principles have been  departed  from         under the award assailed by the appellant.  We may  mention.         at this stage, that the Parliament  has enacted the  Payment         of Gratuity Act, 1972, which has come into force with effect         from  September  16, 1972.   Section 4(5) of -the  said  Act         gives an option to the workers to choose between the gratui-         ty  scheme under the award and the one  under the   statute.         Had the workers been represented before this Court it  might         have been possible for us finally to close this  controversy         or  even  produce a reasonable solution  by  discussion  and         negotiation and persuade them to opt for         94         one or the other scheme.  Early finality, credible certainty         and mutually assented solutions, are the finer processes  of         conflict-resolution-a pursuit which baffles us here  because         of  labour’s absence.  All that we can do, therefore, is  to         adjudicate upon the correctness or otherwise of the  princi-         ples  which have gone into the gratuity scheme  prepared  by         the  tribunal in the light of the rulings of this Court  and         the canons of industrial law.             We now proceed to itemise the grounds of attack levelled         by Shri I.N. Shroff for the appellant .and assay their worth         in the light of the submissions in defence of the award made         by  Shri P.H. Parekh appearing as amicus curiae.  Even  here         we  may  place on record our appreciation of  Shri  Parekh’s         services  to  the Court and the fairness of Shri  Shroff  in         making his points on behalf of the appelant.             The only dispute, which has ramified into a few  issues,         relates  to  the gratuity scheme the  tribunal  has  framed.         Shri  Parekh is right in drawing our attention in limine  to         the  financial.  insignificance, for the appellant,  of  the         subject matter of this lis and the consequential disinclina-         tion  we  must display to disturb the award.  He  has  urged         that  the total annual impact on the industry by the  imple-         mentation of the award is of ,the order of Rs. 3,000/- to  a         substantial part  of which the management has no  objection.         What is more, the appellant is prosperous enough to distrib-         ute  dividends  around 20%  over the years.  Further,  since         1972  an obligatory statutory gratuity scheme has come  into         force with the result that the economic consequences of this         litigation,  even  if the appellant loses are  marginal   or         nil.  This makes us ponder whether, in matters of less  than         grave  moment, this court should, as part of  high  judicial         policy to arrest the tidal flow of unsubstantial litigation,         turn  away at the portals those who invoke our  jurisdiction         to  examine every case where some legal principle  has  been         wrongly decided, regardless of a sense  of  ’summit   court’         perspective  and the rare use of its  reserve  power  so  as         to  preempt a docket explosion and the injustice of  delayed         justice  and invest the High Courts and high tribunals  with         final legal wisdom. The amplitude of Art. 136 is ,meant more         for  exceptional  situations  than to  serve  as  hospitable         basket  to  receive all challenges  to  seemingly  erroneous

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       judgments in the country.             As  stated earlier, we are confronted by  an  industrial         dispute  and  are called upon .to apply  the  principles  of         industrial jurisprudence with its primary concern for  peace         among  the  parties, contentment of the  worker’s,  the  end         product being increased production informed by  distributive         justice.  Law, especially Labour Law, is the art of economic         order  sustained  by social justice.  It aims  at  pragmatic         success,  but is guided by value-realities.  It believes  in         relativity and rejects absolutes.  The recent constitutional         amendment  (Art. 43A) which emphasizes the workers’ role  in         production as partners in the process, read in the light  of         the  earlier accent on workers’ rights and  social  justice,         gives  a new status and sensitivity to industrial  jurispru-         dence in our ’socialist republic’.  This  social  philosophy         must inform interpretation and adjudication, a caveat needed         because  precedents become time-barred when  societal  ethos         progresses.   We         95         are not called upon to interpret an Act since, in this  area         of law, the Payment of Gratuity Act came in on a later date.         Judge-made law rules the roost.  Even so, are we fattered by         inflexible norms halLowed by dated decisions ?  Not in  this         jurisdiction.   ’The  golden  rule’ in  a  rapidly  changing         system,  ’is that there are no golden rules’.  We should  be         guided by realistic judicial responses to societal problems,         against the back drop of the new, radical values implied  in         ’social  justice’ to labour, the production backbone of  the         nation, adjusted to the environs of the particular  industry         and its economics and kindered circumstances.  The  dynamics         of  labour law, rather than the bonded of old-time  case-law         answers questions of current justice. Cardozo had  cautioned         in his ’The Nature of the Judicial Process’:                             "That  court best serves the  law  which                       recognizes that the rules of law which grew up                       on a remote generation may, in the fullness of                       experience, by found to serve another  genera-                       tion  badly, and which discards the  old  rule                       when it finds that another rule of law  repre-                       sents  what should be according to the  estab-                       lished and settled judgment of society, and no                       considerable   property  rights  have   become                       vested  in reliance upon the old rule.  It  is                       thus  great writers upon the common  law  have                       discovered  the  source  and  method  of   its                       growth,  and  in its growth found  its  health                       and   life.   It is not and i, should  not  be                       stationary.   Change of this character  should                       not  be  left to the legislature.   If  judges                       have  woefully  misinterpreted  the  mores  of                       their day, or if the mores of their day are no                       longer  those of ours, they ought not to  tie,                       in  helpless  submission, the hands  of  their                       successors."             (Cardozo:  The  Nature  of the  Judicial  Process:  Yale         University Press pp. 151-152).         Indeed,  we are stating no new proposition since the  profu-         sion   of decisions assiduously presented before us  states,         in  sum,  that each case has to be decided; on  the  updated         justice of the fact-situations therein and the only law that         we can reasonably discern from  the rUlings we have read  is         that there is no law but only justice, dependent on a varie-         ty  of socio-economic variables, that the tribunal’s  award,         if his performance is not perverse in the process or the end         product. must be left well alone by this Court even. if some

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       juristic failing or factual peccadillo can be discovered.  A         quest for error and an inclination for correction, frequent-         ly  exercised  by higher Courts will do double  injury.   It         will take away the necessary initiative of  the tribunal  to         produce satisfactory results.  It will delay the finality of         industrial  adjudication  and thereby defeat  the  paramount         purpose  of early re-adjustment.  Judicial  decentralization         claims its price and it must be paid by ignoring errors less         than grave.  Once this perspective is clear, our  non-inter-         ference  with  this award is just. Moreover,  an  industrial         tribunal  must  act on a legal horse sense, rather  than  on         juristic  abstractions,  on rugged  fairness rather than  on         refined legalisms.  It is shop-floor justice. not  five-star         loveliness. The weaker qualify for protective order, in  the         over-all view of the matter.         96             Gratuity  for workers is no longer a gift but  a  right.         It  is   a vague, humanitarian  expression  of  distributive         justice  to  partners in production  for  long,  meritorious         service.   We  have, therefore, adopt a broad  and  generous         approach  to  the problems posed before us  by  Shri  Shroff         without  being mechanistically precedent-bound or  finically         looked into evidence.             Speaking generally, Shri Shroff focussed his  fire-power         firstly-on  the qualifying period of five years for  earning         gratuity  as  against ten years sanctified in  some  earlier         rulings and, secondly, on the basic wage, as contrasted with         the  ’consolidated’ wage being treated as the base  for  the         computation  of gratuity.  He did cite half-a-dozen of  more         cases  of this court in support  which, on  closer  scrutiny         and  studied  in the light of other  citations  Shri  Parekh         emphasized, stand neutralized.             The Tribunal has itself referred to many rulings of this         Court,  noted the features of the industry in question,  the         high  dividends and ’the low wages and reached a  via  media         which we may regard as a prudent judicial resolution of  the         simple conflict.  The flavour of the social milleu, the  raw         realities of industrial conditions and the locale and  life-         style  out there, are sensed by the tribunal better  than  a         distant  court  of  last resort  primarily  specialising  in         declaration  of  law. So we are loathe to upset  the  scheme         unless the tribunal is grievously or egregiously in error.             Shri Shroff staked his case on case-law alone and culled         passages  which  upheld basic wages as  basic  and  ten-year         service for eligibility. Even here, we must mention that the         basic  wage at the relevant time (revised subsequently)  was         in the miserable range of Rs. 20/- per mensem and to  calcu-         late  gratuity on this pitiful rate, when after  ’long.  and         meritorious service’ the worker bids farewell to his  labour         life in the industry, is to be callous to basic justice.             The   Human  Today  cannot  be  held  captive   by   the         less-than-human  yesterday in a crucial area of social  jus-         tice.   So  viewed, we are constrained to negative  the  two         preliminary contentions urged by Shri Shroff while  agreeing         with him on the smaller points of clarification sought.         We reproduce, at this stage, the decretal part of the award:                             "The  award,  therefore,  is  that   the                       employers should be required to frame a scheme                       of gratuity for their workmen. The details  of                       the gratuity scheme are as under:         (a)On death of a workman while    15 days wages for each         in continous service or on att-   completed year of service         ainment of the age of superann-    subject to a maximum of         uation  or on  retirement  or     15 months.         resignation due to continued

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       ill health or on being incapi-         citated,         97              (b) On voluntary abandoment   15 days wages for each               os service by a workman     completaed year of cont-               in case not falling under    inious service subject               (a) or termination of        to the condition that no               service by employers         gratuity will be payable                                            on a total service of                                            less than 5 years ,but                                            this condition will not                                            apply in case of resign-                                            ation or discharge on the                                            grounds of physical disa-                                            blement or incapacity                       (i) For the purposes of gratuity of  a  period                       of  six  months or over shall be  reckoned  as                       ’one  year’ while a period less than 6  months                       will be ignored.                       (ii) Gratuity shall be payable to the  nominee                       of the workman in case of his death or to  his                       legal  heirs, if no one has been nominated  by                       the workman  in this behalf.                       (iii)  ’Wages’  shall mean and  include  basic                       wages  and dear food allowance but  shall  not                       include bonus.                       (iv) Gratuity will not be. allowed to a  work-                       man in case of a serious misconduct  committed                       by him such as insubordination, acts involving                       moral  turpitude, etc.  In case of  damage  to                       the  property of employers or financial  loss,                       the  a,mount  to the extent of loss  shall  be                       liable  to be deducted from the amount of  the                       gratuity.                       (v) The basis of payment of gratuity shall  be                       average earnings of a workman during  the last                       three years."             One  of the leading cases both sides referred to is  the         Delhi  Cloth & General Mills Co., v. Workmen &  Ors.(1)   In         this decision  the court did make the point:                             "That gratuity is not in its present day                       concept merely a gift made by the employer  in                       his  own  discretion.   The  workmen  have  in                       course of time acquired a right to gratuity on                       determination   of  employment  provided   the                       employer  can  afford, having  regard  to  his                       financial conditions to pay it."                       Shah,  J. speaking for the Court, also  empha-                       sized what we have already adverted to:                             "We consider it right to observe that in                       adjudication  of industrial  disputes  settled                       legal principles have little play; the  awards                       made  by  industrial tribunals are  often  the                       result  of  ad hoc determination  of  dispnted                       questions,  and  each determination  for.as  a                       precedent   for  determination  of other  dis-                       pute. An attempt to search for principle  from                       the  law  built up on those  precedents  is  a                       futile exercise.  To the                       (1) [1969] 2 S.C.R. 307.                       98                       Courts accustomed to apply settled  principles                       to facts determined by the application of  the                       judicial  process, an  essay into  the  unsur-                       veyed expenses of the law of industrial  rela-

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                     tions with neither a compass.nor a guide,  but                       only the pillars of precedents is a  disheart-                       ening experience.  The Constitution has howev-                       er  invested this Court with the power to  sit                       in appeal over the awards of Industrial Tribu-                       nals  which  are, it is said, rounded  on  the                       somewhat  hazy  background of  maintenance  of                       industrial peace, which secures the prosperity                       of  the  industry and the improvement  of  the                       conditions  of workmen employed in the  indus-                       try, and in  the absence of principles, prece-                       dents may have to be adopted as  guides--some-                       what  reluctantly to. secure  some  reasonable                       degree  of uniformity of harmony in the  proc-                       ess."              Several  decisions  which were referred to at  the  bar         have been touched upon in the above case.  At the end of the         consideration  of these cases, the Court made  two  pregnant         observations which  we extract:                              "We may repeat that in .matters  relat-                       ing to the grant of gratuity and even general-                       ly  in the settlement of disputes arising  out                       of  industrial relations, there are  no  fixed                       principles,  on the application of  which  the                       problems  arising before the Tribunal  or  the                       Courts may be determined  and often precedents                       of  cases  determined ad hoc are  utilised  to                       build  up claims or to resist them.  It  would                       in  the circumstances be futile to attempt  to                       reduce  the grounds of the decisions given  by                       the Industrial Tribunals,  the  Labour  Appel-                       late  Tribunals  and the High  Courts  to  the                       dimensions of any recognised principle."                                         x                x         x                       x     x                                 "It  is  not  easy  to  extract  any                       principle from these cases; as precedents they                       are conflicting."         These cautionary signals guide us too in the instant case.         It  is  true that on account of the  peculiar  circumstances         affecting  the  textile industry in the  whole  country  the         Court felt that the Tribunal was in error in relating gratu-         ity  to the consolidated wage in. stead of the  basic  wage.         The emphasis in the ruling is on the facts and circumstances         affecting  the  particular  industry and  the  promotion  of         industrial  peace in that field.  Rightly, if we may say  so         with respect, did the Court high-light the view that  deter-         mination of gratuity is hot based on any definite rules  and         each  case must depend upon the prosperity of  the  concern,         needs  of the work, men and the prevailing  economic  condi-         tions,  examined  in  the  light  of  the auxiliary benefits         which the workmen may get on  determination  of  employment.         In  short,  the core of the matter is the  totally   of  the         circumstances  and  the  stage of  evolution  of  industrial         relations  at a given time  What held good a decade ago  may         be given the go by years later.         99             Another leading case on the question of gratuity is  the         British  Paints(1)  where, after referring  to  the  special         features of  the  particular industry. and the other benefit         schemes enjoyed by the employees, the Court referred to  May         &  Baker  where basic wages were treated as  the  basis  and         British  India Corporation where ’gross salary  i.e.,  basic         wages plus dearness allowance’ was held to be the basis.  It         may be noted that in this case the minimum qualifying  serv-

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       ice  for  gratuity was held to be 5 years  except  in  cases         where termination resulted from resignation by the employee.             In  Hydro-Engineers(2) this Court apparently upheld  the         contentions now urged before us by Shri Shroff but  stressed         that no hard and fast rule could be laid down and each  case         must be decided on its own circumstances.             In  Hindustan Antibiotics(3), again, this  Court   high-         lighted   the relevant circumstances upon which the  discre-         tion of the Tribunal could play, viz., the stability of  the         concern, the profits  made in the past, the future prospects         and capacity etc.  This Court declined to disturb the gratu-         ity  scheme in that case even though the wages which  formed         the basis of the gratuity included dearness allowance.             In Bengal Chemical & Pharmaceutical Works Ltd.,  Calcut-         ta(4) a Bench of this Court entered the caveat which we have         underscored in the earlier part of this judgment that:                             "a  free  and liberal  exercise  of  the                       power under Art. 136 may materially affect the                       fundamental  basis of such decisions,  namely,                       quick  solution  to such disputes  to  achieve                       industrial peace.  Though Art. 136 is  couched                       in  widest  terms, it is  necessary  for  this                       Court to exercise its discretionary  jurisdic-                       tion  only in cases where awards are  made  in                       violation  of the principles of  natural  jus-                       tice, causing substantial and grave  injustice                       to parties or raises an important principle of                       industrial law requiring elucidation and final                       decision  by  this Court  and  discloses  such                       other  exceptional  or  special  circumstances                       which merit the consideration of this Court."         It  was  also  mentioned, what is not  oft  remembered  when         interfering with awards, that the Industrial Disputes Act is                             "intended  to be a  self-contained   one                       and  it seeks to achieve social justice on the                       basis  of collective bargaining,  conciliation                       and arbitration.  Awards are given  on circum-                       stances  peculiar  to  each  dispute  and  the                       tribunals  are, to a large extent,  free  from                       the  restrictions of technical  considerations                       imposed on courts."           (1) [1969] 2 S.C.R. 523.           (2) [1969] 1 S.C.R. 156.           (3) [1967] 1 S.C.R. 672.           (4) [1959] Suppl. 2. S.C.R. 136.         100         This  approach is what we earlier described as  the   Tribu-         nal’s  legal hunch or horse sense.  Even Gqziabad  Engineer-         ing Co.,(1) on which Shri Shroff heavily relied, accepts the         position  that  while gratuity  is usually  related  to  the         basic  wage, a departure by relating it to the  consolidated         wage may be made if there be some strong evidence or  excep-         tional circumstance justifying that course.              Calcutta  Insurance Co. Ltd. (2) also placed accent  on         the  practical approach in industrial adjudication  and  did         not interfere with the qualifying service of 5 years  except         in the case of resignation by the employee where the  quali-         fying period was raised to 10 years.              This  survey of the cosmos of case-law can expand,  but         no  service will be rendered by that exercise.  All that  we         need say is that there is nothing fundamentally flawsome  in         the  5-year period being fixed as qualifying  service.   The         real  reason why some cases like British Paints  required  a         qualifying  period  of 10 years was that  a  longer  minimum         period for earning gratuity in the case of voluntary retire-

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       ment  or resignation would ensure that workmen do not  leave         one  concern for another after putting in the short  minimum         service qualifying for gratuity.             We think that current conditions must control the tribu-         nal’s  conscience  in finalizing the terms of  the  gratuity         scheme. Taking things as they are, in our country  presently         there  is unemployment at the level of  workers--that  being         the  category we are concerned with.  Colossal  unemployment         means  that the worker will not leave his employment  merely         because he has qualified himself for gratuity.  In an econo,         mic situation where there is a glut of labour in the  market         and unemployment stares the working class in the face it  is         theoretical to contend that employees will hop from industry         to industry unless the qualifying period for earning gratui-         ty  is  raised to 10 years. The tribunal  was  realistic  in         fixing 5 years as the period of eligibility.                 Our  industrial  realities do not provide  for  easy         mobility  of  labour.  What is more, the sense  of  national         consciousness  in this field is reflected in the Payment  of         Gratuity Act which fixes a period of 5 years as the qualify-         ing period for earning gratuity.         Decisions  have  been brought to our notice  some  of  which         refer to basic wages and others to consolidated wages as the         foundation  for computation of gratuity.  These are  matters         of discretion and the "feel" of the circumstances  prevalent         in  the  industry by the Tribunal and, unless  it  has  gone         haywire in the exercise of its discretion  the award  should         stand.   We see that in the Payment of Gratuity   Act  also,         not  basic  wages  but ’gross wages  inclusive  of  dearness         allowance, have been taken as the basis.  This,  incidental-         ly,  reflects the industrial sense in the country which  has         been crystallised into legislation.         (1) [1970] 1 S.C.R. 622.         (2)[1967] 2 S.C.R. 596.         101             All  things considered, we are disinclined to alter  the         award on the two critical issues on which it was challenged.         However,  there are certain minor clarifications which  will         eliminate ambiguity and, on that both sides are agreed.             We clarify that wages will mean and include basic  wages         and  dearness allowance and nothing else.  This  corresponds         to Sec. 2(s) of the Act. Likewise, we declare that  qualify-         ing service is continuous service (counted with reference to         completed  years) as defined in Sec. 2(c). We hold that  the         award will operate as directed therein i.e. from the date of         reference of the dispute.  Both sides agree, in their state-         ment  of the case, that in clause (a) of the award  the  ex-         pression  due to continued ill-health or on being  incapaci-         tated’ governs only resignation although we feel on  compas-         sionate grounds it should govern both situations. The  ambi-         guity must be resolved in favour of the workers.  In  regard         to the other conflicts of construction possible, as set  out         in grounds 7 and 8 of the appellant’s statement of case,  we         resolve them in favour Of the workmen, abandonment of  serv-         ice being too recondite and the amount involved too  trivial         for variation by this Court.             Shri  I.N. Shroff fairly stated that the Court may  make         an  order regarding costs.  We direct that the appellant  do         pay  the respondents costs which we quantify at Rs.  2000/-.         Out of this sum. Rs. 1000/will be paid direct to Shri Parekh         who has assisted the Court on behalf of the workers and  the         balance  of Rs. 1000/- shall be drawn by the present  Presi-         dent  of the Respondent Union.  Our parting thought is  that         negotiating settlements should be vigorously and  systemati-         cally  pursued even by tribunals since litigation,  escalat-

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       ing. from deck to deck upto this Court, defeats both, whoev-         er  wins  or loses.  This must be a  sobering  influence  on         Labour  and Management and agencies of  conflictresolutions.         That is a legal beacon that can brighten the dark tunnel  of         industrial conflict and promote national production  cheered         by shared wealth.         P.B.R.         102