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PETITIONER: ALL INDIA RESERVE BANK EMPLOYEES ASSOCIATION

       Vs.

RESPONDENT: RESERVE BANK OF INDIA

DATE OF JUDGMENT: 23/04/1965

BENCH: HIDAYATULLAH, M. BENCH: HIDAYATULLAH, M. GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. RAMASWAMI, V.

CITATION:  1966 AIR  305            1966 SCR  (1)  25  CITATOR INFO :  E          1970 SC1421  (14)  R          1971 SC 922  (10)  R          1972 SC 319  (13)  RF         1976 SC2345  (4)  RF         1986 SC1830  (2,19,30)  RF         1988 SC 329  (5)

ACT:     Industrial  Disputes Act, 1947, s.  2(s)--Definition  of ’workman’--’Supervisory  capacity’  whether  different  from ’supervisory  work’--Disputes  about’  non-workmen  when  can  be raised  by  workmen--Central Government whether  can  refer  such disputes  to  Tribunal--Need-based  minimum  wage-Formula  to  be adopted for consumption units per family--Proper coefficient  for white-collar  workers, what is--Enforcement of award:  discretion of Tribunal in the matter of.

HEADNOTE:     The Class II and Class 1I1 staff of the Reserve Bank  of India through their Association,  and Class IV staff through their Union raised an industrial dispute with the Bank which works referred by the Central Government on March 21,  1960, to  the  National Tribunal.  The items  referred  bore  upon scales of pay, allowances, and sundry matters connected with the  conditions  of service of the three classes,  the  most important  ones  being the demand of Class II  staff  for  a scale  commencing  with  Rs. 500 and  the  demand  of  other workmen for a need-based minimum wage as recommended by  the Tripartite  Conference. of 1957.  In its award the  Tribunal pointed  out  that Class I1 staff worked  in  a  supervisory capacity and its demand for a minimum salary of Rs. 500,  if conceded,  would take the said staff out of the category  of ’workman’  as defined in s. 2(s) of the Industrial  Disputes Act,   1947.   Such an award, and any award  carrying  wages beyond Rs. 500 at any stage,  the Tribunal said,  was beyond its’  jurisdiction to make.  It went on to hold  that  other workmen  could  not  raise a  dispute  which  would  involve consideration  of  matters in relation ’to  non-workmen  and that it would be even beyond the jurisdiction of the Central Government  to  refer such a dispute  under  the  Industrial

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Disputes Act. The Tribunal therefore made no award in regard to the supervisory staff in Class II.  As for the demand for a  need-based  minimum  wage, the  Tribunal  held  that  the Tripartite   resolution  had  not  been  accepted   by   the Government  and was not binding; that a  need-based  minimum wage was an ideal incapable of present achievement; that  as against  the demand of a formula of 3 consumption units  per family  it was possible to allow only 2.25 units;  and  that the  coefficient  for  white-collar  workers  would  not  be changed  from 80 to 120 as demanded.  The  Tribunal’s  award was  given  on September 8,  1962 but  made  operative  from January  1, 1962. Dissatisfied with the award,  the  workmen appealed  by special leave, to this Court.  Subsequently  by resolution dated April 24,  1963 the Reserve Bank raised the minimum total emoluments, as envisaged by the definition  of wages, of each and every member of the Class II staff, above Rs. 500 with effect from the dale of operation of the award.     In their appeal before this Court it was urged on behalf of  the  appellants  that there  was  a  difference  between ’supervisory capacity’ mentioned in el. (iv) of s. 2(s)  and ’supervisory  work’  mentioned  in  the  main  part  of  the section,  and  as  Class  II officers  did  not  work  in  a ’supervisory   capacity’  they  were  ’workmen’  under   the definition.  ’Supervisory Capacity it was urged, arose  only when the employee was an agent of the employer. 26 it  was also urged that Class 11 workmen only  had  clerical and checking duties which were not supervisory in character. Alternatively  it was contended that as Class II was  filled by  promotion  from  Class  III  the  question  as  to   the emoluments  of  the former could and should have  been  gone into by the Tribunal in view of the principle enunciated  in the Dimakuchi Tea Estate case. HELD  : (i) (a) The amendment to s. 2(s) of  the  Industrial Disputes  .Act  in 1956 introduced among the  categories  of persons  already mentioned as ’workmen’ persons employed  to do  supervisory and technical work.  So far the language  of the  earlier enactment was used.  When, however,  exceptions were engrafted, that language was departed from in cl.  (iv) partly  because the draftsmen followed the language  of  cl. (iii)   and   partly  because  from  persons   employed   on supervision  work some are to be excluded because they  draw wages  exceeding  Rs. 500 per month and  some  because  they function  mainly in a managerial capacity or have duties  of the same character.  But the unity between the opening  part of  the definition and ci. (iv) was expressly  preserved  by using the word ’such’ twice in the opening part.  The words, which bind the two parts, are not-"but does not include  any person.   They  am-"but does not include  any  such  person" showing  clearly  that  is being excluded is  a  person  who answers  the description "employed to do  supervisory  work" and  he  is  to  be excluded because  being  employed  in  a ’supervisory capacity’ he draws wages exceeding Rs. 500  per month   or  exercises         functions  of   a   particular character. [42 B-E] Like the Taft-Hartley Act in the United states the  Amending Act  ,of  1956  in  our  country  was  passed  to   equalise bargaining  power and also to give the power  of  bargaining and  invoking  the Industrial Disputes  Act  to  supervisory workmen, but it gave it only to some of the workmen employed on  supervisory  work.  Workman’ here includes  an  employee employed as supervisor.  There are only two circumstances in which  such a person ceases to be a workman.  Such a  person is not a workmen if he draws wages in excess of Rs. 500  per month or if he performs managerial functions by reason of  a

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power  vested in him or by the nature of duties attached  to his office.  The person who ceases to be a workman is not  a person who doe,-, not answer the description "employed to do supervisory work" but one who does answer that  description. He  goes  out of the category of "workmen" on proof  of  the circumstances excluding him from the category. [42 F-H] Packard Motor Co. v. The National Labour Relations Board, 91 L.ed. 1040, referred to. (b)The National Tribunal was not justified in holding that if it I future time an incumbent would draw wage in the time scale  in excess of Rs. 500, the matter must be taken to  be withdrawn from the jurisdiction of the Central Government to make a reference in respect of him and the National Tribunal to  be ousted of the jurisdiction to decide the  dispute  if referred.   Supervisory staff drawing legs than Rs. 500  per month  cannot  be debarred from claiming  that  they  should dram, more than Rs. 500 presently or it some future stage in their service. can only be deprived of the benefits if  they are  non-workmen  at the time they seek  the  protection  of Industrial Disputes Act. [43 C-D] (c)  The word ’supervise’ and its derivatives are not  words of  import and must often he construed in the light  of  the context,  for unless controlled the- cover simple  oversight and  direction of manual work of others.  It  is,  therefore necessary  to sea the full context in which the words  occur and the words of our own Act are, the surest guide.   Viewed in  this manner one should not overlook the import of-.  the word "such" 27 which  expressly  links  the exception  to  the  main  part. Unless  this was done it would have been possible  to  argue that cl. (iv) indicated something, which, though no included in  the  main  part,  ought not by  construction  to  be  so included.   By  keeping the link it is clear  that  what  is excluded  is something which is already a part of  the  main provision.  [43 F-G] (d)In  s. 2(k) the word ’person’ has not been  limited  to ’workmen’  as  such  and must,  therefore,  receive  a  more general   meaning.   But  it  does  not  mean   any   person unconnected  with  the disputants in relation to  -whom  the dispute  is  not of the kind described.  It could  not  have been  intended  that although the dispute does  not  concern them  in the least, workmen are entitled to fight it out  on behalf of non-workmen. [44 D-E] Dimakuchi Tea Estate’s case, [1958]2 L.L.J. 500 referred to. If  the  dispute is  regarding  employment,  non-employment, terms  of employment or conditions of labour of  non-workmen in  which  workmen are themselves  vitally  interested,  the workmen may be able to raise an industrial dispute.  Workmen can, for example, raise a dispute that a class of  employees not  within the definition of ’workmen’ should be  recruited by  promotion  from workmen.  When they do  so  the  workmen raise  a  dispute about the terms of  their  own  employment though  incidentally the terms of employment of  those  who, are  not workmen is involved.  But workmen cannot take up  a dispute  in  respect  of a class of employees  who  are  not workmen and in whose terms of employment those workmen  have no  direct  interest  of their own.   What  direct  interest suffices  is  a question of fact but it must be a  real  and positive interest and not fanciful or remote. [441-1] In  the present case the National Tribunal was in  error  in not considering the claims of Class 11 emmployee whether  at the  instance of member. drawing less than Rs. 500 as  wages or  at  the  instance of those lower down in  the  scale  of employment.   The  National Tribunal was also  in  error  in

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thinking that scales of wages in excess of Rs. 500 per month at  any  stage  were  not within  the  jurisdiction  of  the Tribunal  or that Government could not make a reference-  in such a contingency. [45 C-D] (e)Duties  such  as  distribution of  work,  detection  of faults  reporting  for  penalty,  making  arrangements   for filling   vacancies   are  supervisory.   Class   11   staff performing  such  duties could not be said to  perform  only clerical or checking duties.  [46 D-E] Ford  Motor  Company of India v. Ford  Motors  Staff  Union, [1953]  2 L.L.J. 444 and Lloyd Bank Ltd. v. Pannalal  Gupta, [1961]1 L.L.J. 18, referred to. (ii)(a) Minimum wages is the lowest wage in the scale below which the efficiency of the worker is likely to be impaired. It  allows  for living at a  standard  considered  socially, medically,  and ethically to be the acceptable minimum.  [47 C-D] Fair wage by comparison is more generous and involves a rate sufficiently  high to provide a standard family  with  food, shelter,  clothing, medical care and education  of  children appropriate to the workers station in life but not at a rate exceeding  the  wage  earning  capacity  of  the  class   of establishment concerned. [47F] The living wage concept is one or more steps higher then air wage.   It has now been generally accepted that living  wage means  that every male earner should be able to provide  for his  family  not only the essentials but a fair  measure  of frugal comfort and an ability to provide for old age or evil days. [48A] CI/65-3 28 It  may  be  taken that our politicd aim  is  ’living  wage’ though  in  actual practice living wage has  been  an  ideal which  has eluded our efforts like an ever-receding  horizon and  will so remain for sometime to come.  Our general  wage structure has at best reached the lower levels of fair wage. [48D] Standard  Vaccum  Refining Co. v. Its Workmen[1961]1  L.L.J. 227,referredto. (b)There can be no doubt that in our march towards a truly fair wage inthe first instance and ultimately the  living wage  we  must  first achieve the  need-based  minimum.   In determining  family budgets so as to discover  the  worker’s normal  needs  which the minimum wage regulations  ought  to satisfy  the size of  the standard family is very  necessary to fix.  One method is to take simple statistical average of the  family  size and another is to take into  account  some other factors such as the frequency of variations in  family sizes in certain region and employments, the number of  wage earners -available at different stages, and the increase  or decrease  in consumption at different stages in  employment, that  is, the age structure and its bearing on  consumption. The  plain averages laid down in the Resolution may have  to be weighted in different regions and in different industries and reduced in others. [52 F-H] Crown Aluminium Works v. Workmen,[1958]t L.L.J. 1,  referred to. (c)Although the 3 consumption units formula is if anything on  the low side the National Tribunal could not be said  to be  wrong, in the present circumstances, in  accepting  2.25 consumption   units.    But  by   graduates   increase   the consumption  units must be raised to 3 within five years  of service. [52F; 53C] (d)The   Tripartite   Conference  of  1957  was   a   very representative body.  There must be attached proper value to

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its Resolution on wage policy.  The Resolution was passed on to  indicate  a first step towards  achieving     I"  living wage. Unfortunately,  we  ire  constantly  finding  that basic wage, instead ofmoving  to subsistence plus  level, tends to sag to poverty level when thereis  a  rise  in prices.   To overcome this tendency our wage  structure  has for  a  long time been composed of two items (a)  the  basic wage,  and  (b)  a dearness allowance which  is  altered  to neutralise,  if not entirely, at least the greater  part  of the  increased  cog,, of living.  This does  not  solve  the problem  of real wage.  At the same time, we have to  beware that too sharp an upward movement of basic wage is likely to affect  the  cost  of production and lead  to  fall  in  our exports and to the raising of prices all-round.  There is  a vicious  circle which can be broken by increased  production and   not  by  increasing  wages.   What  we  need  is   the introduction of production bonus increased fringe  benefits, free  medical, educational and insurance facilities.   As  a counterpart to this capital must also be prepared to  forego a  part  of  its  return.  There is  much  to  be  said  for considering  the need-base formula in all  its  implications for  it is bound to be our first step towards  living  wage. As in many other matters relating to industrial disputes the problem may, perhaps. be best tackled by agreement  between, Capital and Labour in in establishment where a beginning can be safely made in this direction. [54 E-H] East Asiatic Co.  v. Workmen [1962]2 L.L.J. 610 referred to. (e)Without further data it is difficult to determine  what coefficient shouldbe applied to the working class wage for the purpose of determiningthe need-based minimum wage of clerical staff.  When fresh and comprehensive enquiries  are conducted,  the results would show whether  the  coefficient should go up or down.  With the rise of wages to higher 29 levels among the working class the differential is bound  to be lower and this is a matter for inquiry.  Till then  there is  no alternative but to adhere to the coefficient  already established. [56 F-G] (iii)Seniority and merit should ordinarily both have  a part  in  promotion to higher ranks and should  temper  each other.   ’The National Tribunal was right in  thinking  that there was little scope for giving directions to the Bank  in this regard. [57 F-G] (iv)Gratuity  is not a gift but is earned and  for  feiture except  to recoup a loss occasioned to the establishment  is not justified. [58F] Express Newspaper (P) Ltd. & Anr. v. Union of India,  [1961] 1 L.L.J. 339, Garment Cleaning Works v. Its Workmen, [1962]1 S.C.R. 711, Greaves Cotton Co. Ltd. & Anr. v. Their Workmen, [1964]1  L.L.J.  342  and  Burhanpur  Tapti  Mills  Ltd.  v. Burhanpur  Tapti Mills Mazdoor Sangh, A.I.R. 1965 S.C.  839, referred to. (v)The Tribunal rightly declined to accept the demand that the   Association  and  the  Union  should  be  allowed   to participate   and  represent  workem  in  disputes   between individual  workmen and the Reserve Bank.  This  would  make internal administration impossible. [60B] (vi)In  making its award operate from January 1,  1962  and rejecting  the appellants’ demand that it should  come  into force from November 1, 1957 or at least from March 21, 1960, the National Tribunal did not act unreasonably.   Ordinarily an award comes into operation from the time ,stated in  sub- 9.  (1) of s. 17A of the Industrial Disputes Act.   I.e.  on the expiry of thirty days from the date of its  publication. The  Tribunal however is given power to make, it  applicable

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from  another  date, and it could not be said  that  in  the present  case  the  discretion had  not  been  exercised  on judicial principles. [63 A-B] Liptons’s case, [1959]1 L.L.J 431, Remington Rand’s  [1962]1 L.L.J.  287, Rajkamal Kalamandir (P) Ltd. v.  Indian  Motion Picture Emnloyees’ Union & Ors., [1963]1 L.L.J. 318, Western India  Match Co. Ltd. v. Their Workmen, [1962]2 L.L.J.  459, Wenger  & Co. and Ors. v. Their Workmen, [1963]2 I.L.J.  403 and  Hindustan Times Ltd. v. Their Workmen,  [1964]1  S.C.R. 234, referred to. Appeal  by special leave from the award dated  September  8, 1962 of the National Industrial Tribunal (Bank Disputes)  at Bombay in Reference No. 2 of 1960.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4 of 1965. A.   S. R. Chari, D. S. Nargolkar, K. Rajendra Chaudhury and K.   R.  Chaudhuri, for the appellants. N.   A. Palkhivala, N. V. Phadke and R. H. Dhebar, for  res- pondent No. 1. Atiqur  Rehman and K. L. Hathi, for respondent No. 2. The Judgment of the Court was delivered by Hidayatullah, J. This is an appeal by special leave from the Award  of the National Industrial Tribunal  (Bank  Disputes) Bombay,  in a dispute between the Reserve Bank of India  and its 30 workmen, delivered on September 8, 1962 and published in the Gazette of India (Extraordinary) of September 29, 1952.  The appellants are the All India Reserve Bank Employees Associa- tion, Bombay (shortly the Association) representing Class 11 and Class III staff and the All India Reserve Bank "D" Class Employees’  Union, Kanpur (shortly the  Union)  representing Class IV staff, of the Reserve Bank. By notification No. S.O. 704 dated the 21st March 1960,  the Central  Government, in exercise of its powers under s.  7/B of the Industrial Disputes Act, 1947, constituted a National Industrial  Tribunal  with Mr. Justice K.  T.  Desai  (later Chief  Justice of the Gujarat High Court) as  the  Presiding Officer.   By  an order notified under No. S.O. 707  of  the same date, Central Government, in the exercise of the powers conferred  by  sub-s.  (  IA) of s.  10  of  the  Industrial Disputes Act, referred an industrial dispute, which, in  its opinion,  existed between the Reserve Bank- and its  workmen of   the  three  classes  above-mentioned.   The  Order   of Reference  specified the heads of dispute in two  schedules, the first in respect of Class II and Class III staff and the second  in  respect of Class IV staff.  The  first  Schedule consisted  of 22 items and the second of 23  ;Items.   These items (a considerable number of which are common to the  two schedules)  beer  upon the scales of pay  and  dearness  and other  allowances  and  sundry matters  connected  with  the conditions  of service of the three classes.  The  reference was registered as Reference No. 2 of 1960.  During the trial of  the  Reference the Association and the  Union  severally made  applications for interim relief asking for 25% of  the total emoluments to Class TV employees with a minimum of Rs. 25 and for 25% of the basic pay to the employees of the  two higher  --lasses, with effect from July 1959, but  this  was refused  by an interim Award dated December 29,  1960.   The final  Award was delivered on September 8, 1962  because  in the  meantime  the  Tribunal dealt  with  another  reference registered as Reference No. 1 of 1960 in a dispute involving

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84  banking companies and Corporations and their workmen  in respect  of  creation of categories of banks and  areas  for purposes  of  and indication and of scales of  pay,  diverse allowances  and other conditions of service.  The  Award  in that Reference was delivered on June 7, 1962.  The  Tribunal was next occupied with the resolution of yet another dispute over  bonus between 73 banking companies and  their  workmen which  was registered as Reference No. 3 of 1960  and  which was  concluded by an award on July 21, 1962.  We shall  have occasion  to refer to these awards later.  We may  now  give the  facts of the dispute in the Reference from  which  this appeal arises. 31 The  Reserve  Bank  was established on April 1,  1935  as  a shareholders’ Bank with a capital of Rs. 5 chores which  was mainly subscribed by the public.  It was taken over in  1948 by  the  Government of India, when, under the  Reserve  Bank (Transfer  to Public Ownership) Act, 1948, the  shares  were compulsorily  acquired  by Government at a  premium  of  Rs. 18.62 over and above the face value of the share of Rs. 100. Thereafter  the  Reserve Bank is administered by  a  Central Board of Directors nominated by the Central Government  from the  civil  services and public men.  There are  four  local Boards  to advise the Central Board and to function  as  its delegates.  The Head Office of the Reserve Bank is  situated at  Bombay  with branches at Calcutta,  New  Delhi,  Kanpur, Madras,  Bangalore,  Nagpur,  Lucknow,  Hyderabad,  Gauhati, Trivandrum,  Patna, Ahmedabad, Ludhiana, Jaipur and  Indore. The  Reserve  Bank acts as Bank to the  Central  and  St-ate Governments and Commercial Banks and controls the issue  and circulation  of currency.  It has special duties to  perform under  the  Banking Companies Act 1949  and  supervises  and controls the banking     industry  in India.   It  regulates and controls foreign exchangeand  exchange of currency  and remittances to and from India.     It is hardly necessary to refer  to  its  multifarious duties  and  functions  as  the Central Bank and as the bankers’ bank. The Reserve Bank employs four classes of employees of  which The  three  lower classes are before this Court,  the  first class  being  of officers.  At the material time  the  total number  of employees of all description ",as about 9,500  of which 3,300 were in the Head Office, 1,800, 1,100 and  1,100 respectively at Calcutta, New Delhi and Madras and the  rest were  distributed  in varying numbers  among  the  remaining twelve  branches.   The present dispute has a  long  history into  the details of which it is hardly necessary to go  but as both sides have made reference to it, some of the leading events  connected  with bank disputes in  general,  and  the present dispute respecting the Reserve Bank, in  particular, may be mentioned. As  is  well-known  there has been a rise in  the  price  of commodities since 1939 and workmen earning wages and persons in the fixed income groups are specially affected.   Between the  years  1946  and  1949  there  were  set  up   numerous Commissions and Tribunals to deal with disputes between  the commercial  banks  and  their  employees.   In  1946  strike notices were served on many banks in Bombay, Bengal and  the United Provinces.  In Bombay Mr. H. V. Divatia dealt with  a dispute between the Bank of India and its employees, happily settled  by  consent  (August 15. 1946)  and  again  with  a dispute between 30 named Banks in Bombay and 32 their  -employees.   The Award was given on April  9,  1947. That  award  was  extended to Ahmedabad  Bank  employees  by another  award  published on April 22,  1948.   Conciliation

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proceedings  were,  conducted by Mr. R.  Gupta  between  the Imperial  Bank  of India and its employees in  Bengal  which concluded on August 4, 1947.  Other awards and adjudications were made by Mr. S. C. Chakravarti and Mr. S. K. Sen. In the United Provinces first Mr. B. B. Singh, Labour Commissioner, began  arbitration in disputes between as many as 40  bankes and  their employees, which later went  before  Conciliation Boards headed first by Mr. Nimbkar. and on his death, by Mr. Bind   Basni  Prasad  and  the  recommendations  were   made effective  by a Government order.  On the representation  of the Banks an Ordinance was promulgated (followed by an  Act) and  the  Central  Government took over  the  resolution  of disputes  between  banks and their employees  in  all  cases where  the banks had offices in more than one province.   On June 13, 1949 the Central Government appointed an All  India Industrial Tribunal (Bank Disputes) with Mr. K. C. Sen and 2 members  to  codify the terms and conditions of  service  of bank  employees.   The  Sen  Award  (as  it  is  known)  was published  on  August 12, 1950 but on appeal this  Court  on April 9, 1951 declared it to be void as there was a flaw  in the  composition  of  the Tribunal.  As  a  result  of  this contingency a standstill Act was passed and another Tribunal with  Mr.  H. V. Divatia and 2 members  was  erected.   This Tribunal did not conclude the work and resigned and in  1952 another Tribunal presided over by Mr. S. Panchapagesa Sastry was appointed which published its award in April 1953.  That Award was subjected to an appeal before the Labour Appellate Tribunal  and it was much modified.  Some banks  represented to  Government  ,heir inability to  implement  the  modified award and the Central Government intervened and modified the award  of  the Labour Appellate Tribunal by an  order  dated August  24,  1954.  We may leave this general  narration  at this stage to view the disputes between the Reserve Bank  of India and its employees during the same period. In  1946 the Association delivered a charter of demands  for revision  of pay scales and allowances of the  employees  of the  Reserve Bank from April 1, 1946 and after  negotiations some revision in wages and dearness allowances was effected. During   the   interval  between  this  revision   and   the appointment  of  the Sastry Tribunal  other  revisions  took place.   When  the Sastry Tribunal gave its award  in  March 1953,  the Association in May of the same year  delivered  a revised charter of demands to the Reserve Bank but owing  to the  pendency  of tile Appeal before  the  Labour  Appellate Tribunal, the demand could not be considered.  The Reserve 33 Bank, however, assured its employees that after the decision of  the  Labour  Appellate Tribunal was  known,  the  entire question  would  be  reviewed.  When  the  Labour  Appellate Tribunal  gave its decision in April 1954,  the  Association served  a fresh charter of demands on May 18, 1954  but  the decision   of  the  Appellate  Tribunal  was   modified   by Government  and on September 1, 1954 a  commission  presided over  by Mr. Justice Rajadhykshya and later by  Mr.  Justice Gajendragadkar  (as  he then. was  constituted  to  consider whether the Appellate Tribunal’s decision should be restored or  continued  with  modifications and  to  suggest  further modifications having due regard to the overall condition  of banks  in  gencral and individual banks in  particular.   In October  1954  the  Association, realising  that  delay  was inevitable, agreed to accept the scale,, of pay on the basis of the modified Labour Appellate Tribunal’s decision  though the employees obtained by the agreement something more  than their  counterparts  in the higher  class  commercial  banks under the order of Government which modified the decision of

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the Labour Appellate Tribunal.  The advantage to the Reserve Bank   employees  was  neutralized  when  the   Bank   Award Commission  restored  the decision of the  Labour  Appellate Tribunal in respect of the Commercial Banks.  The  agreement lasted till October 31, 1957 and the Reserve Bank  employees honoured it. On July 11, 1959, the Association submitted a fresh  charter of  demands  asking  for  a complete  revision  of  the  pay structure  and  invoked the norms settled at  the  Fifteenth Indian Labour Conference and asked for improvement generally in  the conditions of service.  As the Reserve Bank was  not agreeable  to  negotiate, the Association  called  upon  the Reserve  Bank to ratify the Code of Conduct evolved  at  the Sixteenth  Indian  Labour  Conference  and  to  proceed   to arbitration but the Reserve Bank declined.  The  Association called upon the Reserve Bank to ratify the Code of work from March  25, 1960.  Before this happened the All  India  State Bank of India Staff Federation had given a notice and  there was  a  strike from March 4, 1960 and on March 19  all  bank employees struck work in support and the several  references to which we have referred followed. The  Reserve  Bank during the years between 1.946  and  1960 undertook  from  time  to  time  revision  of  salaries  and allowances.   In  1947  and 1948  dearness  allowances  were revised  and in 1948 there was a general revision of  scales of pay as from April 1, 1948.  These revisions were made  at the demand of the Association.  In 1.951 ad hoc increases in dearness  allowances were made and  compensatory  allowances were  introduced  and from 1951 local dances were,  paid  to certain classes of employees serving at some of 34 the  important offices of the Reserve Bank and  subsequently the  scheme of local allowances was extended to a few  other branches.   In  1954 local allowances  were  converted  into local pay and 25% of the dearness allowances was treated  as pay  for  calculation  of retiring benefits  etc.   In  1957 family  allowances to class IV employees were raised and  in 1958  and  1959  dearness  allowances  were  again  slightly raised.   These  increases, though welcome to  them,  hardly satisfied  the  demands of the employees.  There  were  many conciliation conferences but none was successful.  The  cost of living index with base year 1949=1.00 had increased by 26 points  in February 1960 and the principles of  minimum  and fair  wages  were deliberated upon and adverted  to  in  the Report   of  the  15th  Indian  Labour  Conference.    These principles,  to  which  detailed  reference  will  be   made presently were desired by the employees of the Reserve  Bank to  be put into operation.  As a result the gap between  the demands  of  the employees and (lie offers  of  the  Reserve Bank,  which  was  wide  already.  became  wider  still  and conciliation which bad always succeeded in the past, was not possible.   The  Association suggested arbitration  but  the Reserve Bank by its letter dated February 11, 1960, (lid not agree.  The Reserve Bank stated that it did not wish to  get "seriously  out of step" with Government or  the  Commercial Banks.   The  Reserve Bank referred to  the  Pay  Commission Report  and  pointed out that the demands of  the  employees took  no  notice  of  the  state  of  Indian  company.   The Association, through its Secretary, in reply (Feb. 22. 1960) observed               "Your   criticism,  that   the   Association’s               Charter of Demand has been pitched so high  as               to exclude all scope for satisfactory solution               through  negotiations  we may  point  out,  is               baseless  and  incorrect, as the  Charter  has

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             been  based  on the norms set up by  the  15th               Tripartite Labour Conference at Nairobi  where               the need-based wage formula for Indian  worker               was   evolved,   and   the   coefficient   for               conversion to arrive at the minimum wage for a               middle   class  salaried  employee  has   been               accepted     from    the     Raj     adhyaksha               Report. . . . . . ". The  Association also pointed out that it had been  conceded by  the Governors of the Reserve Bank in the past  that  the emoluments of the Reserve Bank employees ought to be  higher than  those  of  other Bank employees  and,  therefore,  the recommendations  of the Pay Commission were irrelevant.   In this appeal one of the fundamental points argued is  whether the National Tribunal was right in rejecting the demand  for the inauguration of the need- 35 base formula.  It was, however, in this back-round that  the National  Industrial Tribunal was constituted and the  whole of the dispute was referred to it. This  Reference embraced as many as 22 items in  respect  of Class 11 and Class III employees and 23 items in respect  of Class  IV employees.  Some of these were decided  in  favour and  some against the employees.  Not much purpose would  be served if we mentioned the may points of controversy or  the decision  on  that, for in this appeal, the  employees  have stated their case with commendable restraint and Mr.  Chari, though  he  argued  it with  his  customary  esmestness  and ability,  did so appreciating the realities of our  national economy.  He paid (it may be noted) sincere tributes to  the Reserve  Bank  for its helpful attitude at  all  times,  and expressed  regret  that  there was  no  conciliation  as  on previous  occasions.  Mr. Palkhivala too, on behalf  of  the Reserve  Bank, showed an awareness of the point of  view  of the  employees and on some of the less important points,  as we  shall  show  later,  agreed  to  consider  tile   matter favorably, The  dispute  now  centres round two  fundamental  or  major points  ind a few others not so fundamental.  We shall  deal with  the main points first and then deal with  the  others. The first major point concerns employees of Class II.   This class  of  employees  was in the scales of  pay  which  were settled by the agreement of November 2, 1954.  These were 1.   Research   Superintendents   Rs.301-25-400-E.B.-25-650. 2.   Superintendents and Sub-  Rs. 275-25 -375-E.B.-25--500-           Accountants         25- 650. 3.   Deputy Treasurers (Bombay           and Calcutta)           Rs. 450 -25-650. 4.   Deputy Treasurer (Gauhati)   Rs.  375-25-550. 5.   Assistant Treasurers         Rs.  300-25-450. 6.   Personal Assistant to the      Governor                     Rs.   320-30-650. 7.   Personal Assistant           Rs.   325-25- 550. 8.   Caretakers, Grade I (Bom-  Rs.275-10-325-E.B.-12 1/2-      bay and Calcutta)        400. 9.   Staff Assistants           Rs.     250-25-A50-E.B.-25-                                         650. 10.  Supervisor, Premises Section    Rs.250-15-310- E.B.-20-                                          650. 11. Deputy Treasurer (Hyderabad)     Rs. 350--25-500. 36 There was in addition local pay for these employees equal to 10%  of  pay,  at Bombay, Calcutta,  Ahmedabad,  New  Delhi, Madras and Kanpur.  There was also a family allowance of Rs. 10  per child subject to a maximum of Rs. 30  for  employees

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drawing less than Rs. 550 per month with a completed service of 5 ,,cars. The  National Tribunal in considering, the demands of  Class 11 staff of the Reserve Bank came to the conclusion that  it could not give any award regarding these employees who  were employed in a supervisory capacity.  In this connection  the Reserve  Bank had pleaded that the Reference concerned  only those employees who came within the definition of  "workman" in  the  Industrial Disputes Act, 1947, as  amended  by  the amending  Act  of 1956, and the Reserve Bank  had  contended that  it was futile to fix a time scale for Class  11  staff because every incumbent in it was employed in a  supervisory capacity  and  under  the  existing  scales,  of  pay  every incumbent  at a local pay centre would draw wages in  excess of  Rs.  500  after three years’  service  and  every  other incumbent  at the end of 5 years’ service and that  most  of the employees in that class had entered it by promotion  and even at their entry were drawing wages in excess of Rs. 500. The Reserve Bank had further contended that a dispute  could only  be  raised  before the National  Tribunal  provided  a workman  continued  to  be a workman  as  defined.   If  the National  Tribunal was asked to provide a scale  of  payment which  would make the workman cease to be workman by  reason of  the  award,  the Reserve Bank  contended,  the  National Tribunal  had no jurisdiction to make such an award and  the Reference itself would become incompetent.  The relationship of employer and workman, so it was contended, must exist (a) at  the time of dispute, (b) at the time of the  award,  and (c)  during  the  currency  of  the  award,  otherwise   the Reference   and  the  consequent  award  would  be   without jurisdiction. The  Association had contended in reply (as it does in  this appeal)  that the duties performed by these  employees  were not of a supervisory nature and further that they were doing supervisory  work  and were not employed  in  a  supervisory capacity.   In Reference No. 1 of 1960, Mr. Sule, on  behalf of the employees, had contended (a) that workmen could raise an  industrial dispute for themselves and for a  section  of them  at any level, (b) that persons who were workmen  could raise  an industrial dispute regarding their  conditions  of service  not only at stages when they would be  workmen  but also at stages when they would cease to be workmen under the same  employer, and (c) that workmen could raise a  -dispute on behalf of non-workmen in the same establishment pro- 37 vided  they  had a direct and substantial  interest  in  the dispute  and  had  a community of interest  with  such  non- workmen. The  National  Tribunal  in the present  award  adopted  its discussion  of the question in paragraphs 5.206 to 5.219  of the  award in Reference No. 1 of 1960.  It pointed out  that the  demand by Class It Supervisory Staff envisaged a  scale commencing,  at  Rs.  500  and  that  if  the  demand   were considered  favorably everyone in that class would cease  to be  a workman and such an award was beyond its  jurisdiction to  make.   The National Tribunal held that even  though  by reason  of  community  of interest other  workmen  might  be entitled,  having  regard to the definition  of  "industrial dispute’, to raise a dispute on behalf of others, they could not  raise a dispute either for themselves or on  behalf  of others,  when  the dispute would  involve  consideration  of matters  in relation to non-workmen.  The National  Tribunal also  held that it would even be beyond the jurisdiction  of Central  Government  to  refer  such  a  dispute  under  the Industrial Disputes Act.  The, National Tribunal, therefore,

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held  that  the  expression "scales of pay  and  methods  of adjustment  in  the  scales of pay" in  Schedule  I  of  the present  Reference  could  not  cover  non-workmen  such  as supervisory   staff   in  Class  11.   Those   employed   in supervisory capacity and drawing more than Rs. 500 p.m. were treated  as not present before the National Tribunal and  as they  could  not  be heard the National  Tribunal  found  it inexpedient  to  fix scales of salary  affecting  them.   As regards those employed in the same capacity but drawing less than  Rs. 500 per month but on scales carrying  them  beyond that mark, the National Tribunal thought that if all that it could  do  was  to fix a scale up to Rs. 500,  it  would  be unfair  to  lower  the scale already  fixed.   The  National Tribunal  thus made no award in regard to supervisory  staff in Class 11. Before we consider the case of the appellants an event which happened  later  may be mentioned.  The Reserve  Bank  by  a Resolution  (No.  8) passed at their 1456th  weekly  meeting held on April 24, 1963, increased the scale of pay, dearness allowances,  house rent allowances etc. for Class  11  staff with  effect from January 1, 1962, that is to say, the  date from  which the impugned award came into force.   Under  the Resolution  scales  of pay, which were acknowledged  by  Mr. Chari, to be as generous as the present circumstances of our country  permit, have been awarded.  But more than this  the minimum  total emoluments as envisaged by the definition  of wages, even at the commencement of service of each and every member  of  Class  II staff on January 1,  1962  now  exceed Rs.500  per month.  This,of course, was done with a view  to with- 38 drawing  the  whole class from the ambit of  the  Reference, because, it is supposed, no member of the class can now come within  the definition of "workman".  We shall,  of  course, decide the question whether the Resolution has that  effect. If  it  does,  it  certainly relieves  us  of  the  task  of considering scales of pay for these employee,& for no  remit is  now  possible as no National Tribunal is  sitting.   The scales  having  been  accepted as  generous,  there  dispute regarding  scales  of pay for Class II employees  under  the Reference, really ceases to be a live issue. However,  in view of the importance of the subject  and  the possibility  of  a  recurrence of  such  question  in  other spheres,  and  the remarks of the National  Tribunal  as  to jurisdiction  of the Central Government and itself  we  have considered it necessary to go into some of the points mooted before  us.  Before we deal with them we shall read some  of the pertinent definitions from the Industrial Disputes  Act, 1947 :               "2.  In  this Act, unless  there  is  anything               repugnant in the subject or context,--               (k)   "Industrial  dispute" means any  dispute               or difference between employers and employers,               or  between employers and workmen, or  between               workmen  and workmen, which is connected  with               the  employment or nonemployment or the  terms               of employment or with the condition of labour,               of any person;               (rr) "wages" means all remuneration capable of               being  expressed  in  terms  of  money,  which               would,  if the terms of employment,  expressed               or  implied, were fulfilled, be payable  to  a               workman  in  respect of his employment  or  of               work clone in such employment, and includes-               (i)   such   allowances  (including   dearness

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             allowance)  as  the workman is  for  the  time               being entitled to;               (ii)  the value of any house accommodation, or               of supply of light, water, medical  attendance               or  other amenity or of any service or of  any               confessional  supply  of woodgrains  or  other               articles;               39               (iii) any traveling concession;               but does not include-               (a)   any bonus;               (b)   any contribution paid or payable by  the               employer to any pension fund or provident fund               or  for the benefit of the workman  under  any               law for the time being in force;               (c)   any gratuity payable on the  termination               of his service. (s)  "workman"  means any person (including  an  apprentice) employed  in  any industry to do any  skilled  or  unskilled manual, supervisory, technical or clerical work for hire  or reward,  whether  the terms of employment  be  expressed  or implied,  and for the purposes of any proceeding under  this Act  in  relation to an industrial dispute,  include,,%  any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose  dismissal, discharge or retrenchment has led to  that dispute, but does not include any such person-               (i)   who is subject to the Army Act, 1950, or               the   Air  Force  Act,  1950,  or   the   Navy               (Discipline) Act, 1934, or               (ii)  who is employed in the police service or               as  an officer or other employee of a  prison;               or               (iii) who  is employed mainly in a  managerial               or administrative capacity; or               (iv)  who,  being  employed in  a  supervisory               capacity,  draws wages exceeding five  hundred               rupees per menses or exercises, either by  the               nature of the duties attached to the office or               by  reason  of  the  powers  vested  in   him,               functions mainly of a managerial nature." Mr.  Chari contends that the exclusion of Class II staff  is based  on  a  wrong construction of  the  above  definitions particularly    the   definition   of   ’workman’   and    a misunderstanding  of  the duties of Class 11  employees  who have  been  wrongly  classed as  supervisors.   He  contends alternatively  that as Class II is filled by promotion  from Class III, the question could and should have been gone into 40 in  view  of the principle enunciated in the  Dimakuchi  Tea Estate(,) case.  Mr. Chari in support of his first  argument points  to the opening part of s. 2 (s) where it  speaks  of "any skilled or unskilled manual, supervisory, technical  or clerical  work"  and contrasts it with the words  of  clause (iv) "being employed in a supervisory capacity" and  submits that  the  difference  in  language  is  deliberate  and  is intended  to distinguish supervisory work from plain  super- vision.   According to him ’supervisory work’  denotes  that the  person works and supervises at the same  time,  whereas ’supervisory capacity’ denotes supervision but not work  Mr. Chari  divides supervision into two kinds : (a)  supervision which is a part of labour and (b) supervision which is  akin to  managerial functions though it is not actually  so.   He submits  that  this division is clearly brought out  in  the definition of ’workman’ by the use of different  expressions

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such  as "work" and "capacity" for that a  supervisor  doing work  enjoys  the status of labour and a  supervisor  acting only in supervisory capacity enjoys the status of employer’s agent at the lowest level. In  support of his contention Mr. Chari has referred to  the amendment of the National Labour Relations Act of the United States  of America [commonly known as the Wagner Act(1)]  by the  Labour Management Relations Act 1947 commonly known  as the Taft-Hartley Act(2) I and the case of the Packard  Motor Co. v. The National Labour Relations Board(3) which preceded the  amendment.  The Packard Motor Co. case arose under  the Wagner  Act  and  the  question  was  whether  foremen  were entitled  as a class to the rights of self-organisation  and collective bargaining under it.  The benefits of the  Wagner Act  were conferred on employees which by s.  2(3)  included ’any employee’.  The Company, however, sought to limit  this wide  definition which made former employees both at  common law and in common acceptance, with the aid of the definition of  ’employer’ in s. 2(2) which said that the word  included "any person acting, in the interest of an employer  directly or  indirectly.  .  . .". The Supreme Court  of  the  United States  in  holding  that  foremen  were  entitled  to   the protection  of  the Wagner Act held by  majority  that  even those  who acted for the employer in some matters  including standing between the management and manual labour could have interests  of their own when it name to fixation  of  wages, hours,  seniority rights or working conditions.   Mr.  Chari suggests that the definition in the Industrial (1) [1958] 1 L.L.3. 500. (3)  (1947) 61 Stitt 136. (2)  (1935) 49 Stat 449. (4)  91 L. ed. 1040. 41 Disputes  Act  serves  the  same purpose  when  it  makes  a distinction between ’work,’ and ’capacity’. This  ruling,  of  course, cannot be used  in  this  context though  as we shall presently see it probably furnishes  the historical background for the amendment in the United States and  leads  to the next limb of Mr. Chari’s  argument.   The minority  speaking.  through Mr. Justice Douglas,  made  the following  observation  which  puts the  Packard  Motor  Co. case(1) out of consideration-               "Indeed,   the  problems  of  those   in   the               supervisory  categories of management did  not               seem to have been in the consciousness of  the               Congress........  There  is no phrase  in  the               entire Act which is description of those doing               supervisory work". In  this  state  of affairs it is futile to  refer  to  this ruling any further for to derive assistance from any of  the two opinions savors of a priori deduction. The Packard Motor Co. case was decided in March 1947 and  in the same year the Taft-Hartley Act was passed.  Section 2 of the  latter  Act  defined employer to  include  "any  person acting    as   agent   of   an   employer,    directly    or indirectly........  and the term ,employee’ was  defined  to exclude any individual employed as a supervisor.  The term I supervisor’  was  defined  to  mean  an  individual  "having authority,  in  the  interest  of  the  employer  to   hire, transfer,  suspend,  lay off,  recall,  promote,  discharge, assign, reward, or discipline other employees or responsible to   direct  them,  or  to  adjust  their   grievances,   or effectively to recommend such action, if in connection  with the  foregoing  the exercise of such authority is not  of  a merely  routine or clerical nature, but requires the use  of

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independent   judgment".   Mr.  Chari  suggests   that   the Industrial Disputes Act recognising the same difficulty, may be  said  to  have  adopted the  same  test,;  by  making  a distinction between ’work’ and capacity.  According to  him, these  tests  provide  for  that  twilight  are  where   the operatives  (to  use a neutral term) seem to  enjoy  a  dual capacity. The   argument  is  extremely  ingenious  and   the   simile interesting but it misses the realities of the amendment  of the  Industrial  Disputes Act in 1956.   The  definition  of ’workman’  as  it originally stood before the  amendment  in 1956 was as follows :-               "2.(s)  ’workman’  means any  person  employed               (including  in apprentice) in any industry  to               do any skilled               (11)  91 L. ed. 104               42               or unskilled manual or clerical work for  hire               or  reward and includes, for the  purposes  of               any proceedings under this Act in relation  to               an  industrial  dispute a  workman  discharged               during that dispute, but does not include  any               person  employed  in naval,  military  or  air               service of the Government." The amending Act of 1956 introduced among the categories  of persons already mentioned persons employed to do supervisory and  technical  work.  So far the language  of  the  earlier enactment   was  used.   When,  however,   exceptions   were engrafted,  that  language  was departed from  in  cl.  (iv) partly  because the draftsman followed the language  of  cl. (iii)   and   partly  because  from  persons   employed   on supervision  work some are to be excluded because they  draw wages  exceeding  Rs. 500 per month and  some  because  they function  mainly in a managerial capacity or have duties  of the same character.  But the unity between the opening  part of  the definition and cl. (iv) was expressly  preserved  by using the word ’such’ twice in the opening part.  The words, which bind the two parts, are not-"but does not include  any person".  They are --"but does not include any such  person" showing clearly that what is being excluded is a person  who answers  the description " employed to do supervisory  work" and  he  is  to  be excluded because  being  employed  in  a ’supervisory capacity’ he draws wages exceeding Rs. 500  per month or exercises functions of a particular character. The  scheme  of  our Act is much simpler then  that  of  the American  statutes.  No doubt like the Taft-Hartley Act  the amending  Act of 1956 in our country was passed to  equalise bargaining  power and also to give the power  of  bargaining and  invoking  the Industrial Disputes  Act  to  supervisory workmen, but it gave it only to some of the workmen employed on  supervisory work.  ’Workman’ here includes  an  employee employed as supervisor.  There are only two circumstances in which  such a person ceases to be a workman.  Such a  person is not a workman if he draws wages in excess of Rs. 500  per month or if he performs managerial functions by reason of  a power  vested in him or by the nature of duties attached  to his office.  The person who ceases to be a workman is not  a person  who does not answer the description "employed to  do supervisory work" but one who does answer that  description. He  goes  out of the category of "workmen" on proof  of  the circumstances excluding him from the category. By  the revision of salaries in such a way that the  minimum emoluments  equal to wages (as defined in the Act) of  Class II 43

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staff now exceed Rs. 500 per month, the Reserve Bank intends to  exclude them from the category of workmen and to  render the  Industrial  Disputes  Act inapplicable  to  them.   Mr. Palkhivala frankly admitted that this step was taken so that this group might be taken away from the vortex of industrial disputes.   But this position obviously did not  exist  when the scale was such that some at least of Class 11  employees would  have  drawn wages below the mark.  The  Reference  in those  circumstances was a valid reference and the  National Tribunal  was not right in ignoring that  class  altogether. Further, the National Tribunal was not justified in  holding that if at a future time an incumbent would draw wage in the time scale in excess of Rs. 500, the matter must be taken to be withdrawn from the jurisdiction of the Central Government to  make  a  reference in respect of him  and  the  National Tribunal  to  be ousted of the jurisdiction  to  decide  the dispute  if referred.  Supervisory staff drawing  less  than Rs. 500 per month cannot be debarred from claiming that they should  draw more than Rs. 500 presently or at  some  future stage  in their service.  They can only be deprived  of  the benefits  if they are non-workmen at the time they seek  the protection of the Industrial Disputes Act. Mr. Chari next contends that considering the duties of Class II employees, it cannot be said that they are employed in  a supervisory  capacity  at  all and  in  elucidation  of  the meaning  to  be  given,.  to  the  words  ’supervisory’  and ’capacity’ he has cited numerous. dictionaries, Corpus Juris etc.   as  to  the  meaning  of  the  words.    "supervise", "supervisor",  "supervising", "supervision" etc.  etc.   The word  "supervise"  and  its derivatives  are  not  words  of precise  import and must often be construed in the light  of the  context,  for unless controlled, they cover  an  easily simple oversight and direction as manual work coupled with a power  of inspection and superintendence of the manual  work of  others.   It is, therefore, necessary to  see  the  full context  in which the words occur and the words of  our  own Act  are the surest guide.  Viewed in this manner we  cannot overlook the import of the word "such" which expressly links the  exception  to the main part.  Unless this was  done  it would  have been possible to argue that cl.  (iv)  indicated something,  which,  though not included in  the  main  part, ought not by construction to be so included.  By keeping the link  it is clear to see that what it excluded is  something which is already a part of the main provision. In view of what we have held above it is hardly necessary to advert to the next argument that under the principle of  the Sup.  Cl/65 -4 44 Dimakuchi  Tea  Estate Case(1) workmen proper  belonging  to Class  II and III in this Reference are entitled to raise  a dispute in respect of employees in Class 11 who by reason of cl. (iv) test have ceased to be workmen.  The ruling of this Court  in  the above case lays down that  when  the  workmen raise an industrial dispute against an employer, the  person regarding whom the dispute is raised need not strictly be  a ’workman’  but may, be one in whose terms of  employment  or conditions of labour the workmen raising the dispute have  a direct   and  substantial  interest.   The   definition   of ’industrial  dispute’  in  s. 2(k), which we  have  set  out before, contemplates a dispute between (a)  employers and employers; or (b)  employers and workmen; or (c)  workmen and workmen; but  it  must  be  a dispute which  is  connected  with  the employment -or non-employment or the terms of employment  or

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with  the  conditions  of labour of any  person.   The  word ’person’ has not been limited to ’workman’ as such and must, therefore, receive a more general meaning.  But it does  not mean any person unconnected with the disputants in  relation to whom the dispute is not of the kind described.  It  could not  have  been intended that though the  dispute  does  not concern them in the least, workmen are entitled to fight  it out  on  behalf  of  non-workmen.   The  National   Tribunal extended this principle to the supervisors as a class  rely- ing  on  the following observations from the  case  of  this Court :               "Can  it be said that workmen as a  class  are               directly  or substantially interested  in  the               employment,    non-employment,    terms     of               employment or conditions of labour of  persons               who  belong to the supervisory staff and  are,               under  provisions of the Act,  non-workmen  on               whom  the  Act has conferred no  benefit,  who               cannot   by  themselves  be  parties   to   an               industrial     dispute    and    for     whose               representation  the  Act makes  no  particular               provision?   We  venture  to  think  that  the               answer must be in the negative." It  may, however, be said that if the dispute  is  regarding employment,   non-employment,   terms   of   employment   or conditions  of  labour of non-workmen in which  workmen  are themselves  vitally interested, the workmen may be  able  to raise  an  industrial dispute.  Workmen  can,  for  example, raise a dispute that a class of em- (1)  [1958] I L.L.J. 500. 45 ployees  not  within  the definition of  workman  should  be recruited  by promotion from workmen.  When they do  so  the workmen  raise  a  dispute  about the  terms  of  their  own employment  though incidentally the terms of  employment  of those  who are not workmen is involved.  But workmen  cannot take up a dispute in respect of a class of employees who are not  workmen and in whose terms of employment those  workmen have no direct interest of their own.  What direct  interest suffices  is  a question of fact but it must be a  real  and positive  interest and not fanciful or remote.  It  follows, therefore,  that the National Tribunal was in error  in  not considering the claims of Class II employees whether at  the instance of members drawing less than Rs. 500 as wages or at the instance of those lower down in the scale of employment. The  National  Tribunal was also in error in  thinking  that scales of wages in excess of Rs. 500 per month at any  stage were  not within the jurisdiction of -the Tribunal  or  that Government could not make a reference in such a contingency. We   would  have  been  required  to  consider  the   scales applicable  to those in Class II but for the fact  that  the Reserve Bank has fixed scales which are admitted to be quite generous. It  may be mentioned here that Mr. Chari attempted  to  save the  employees  in  Class  11  from  the  operation  of  the exceptions in cl. (iv) by referring to their duties which he said were in no sense ’supervisory’ but only clerical or  of checkers.  He also cited a number of cases, illustrative  of this  point of view.  Those are cases dealing with  foremen, technologists, engineers, chemists, shift engineers,  Asstt. Superintendents, Depot Superintendents, godown-keepers  etc. We have looked into all of them but do not find it necessary to refer to any except one.  In Ford Motor Company of  India v.  Ford  Motors  Staff  Union,  (1)  the  Labour  Appellate Tribunal  correctly pointed out that the question whether  a

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particular  workman  is a supervisor within or  without  the definition  of ’workman’ is "ultimately a question of  fact, at best one of mixed fact and law. . . . " and "will  really depend upon the nature of the industry, the type of work  in which  he  is  engaged, the  organisational  set-up  of  the particular  unit of industry and like factoe".   The  Labour Appellate  Tribunal pertinently gave the example  that  "the nature  of  the  work in the banking  industry  is  in  many respects  obviously  different from the nature and  type  of work   in  a  workshop  department  of  an  engineering   or automobile  concern." We agree that we cannot use  analogies to  find out whether Class 11 workers here were  supervisors or doing mere (1)  [1953] 2 L.L.J. 444. 46 clerical work-.  No doubt, as Mr. Chari stated, the work  in a Bank involves layer upon layer of checkers and checking is hardly  supervision but where there is a power of  assigning duties  and distribution of work there is  supervision.   In Llyods  Bank Ltd. v. Pannalal Gupta (1), the finding of  the Labour  Appellate  Tribunal was reversed because  the  legal inference  from  proved  facts was  wrongly  drawn.   It  is pointed  out there that before a clerk can claim  a  special allowance  under  para 164(b) of the Sastry  Award  open  to Supervisors,  he must prove that he supervises the  work  of some  others; who are in a sense below him.  It  is  pointed out  that mere checking of the work of others is not  enough because  this  checking is a part of accounting and  not  of supervision  and the work done in the audit department of  a bank is not supervision. The  Reserve  Bank has placed on record  extracts  from  the manuals, orders, etc. relative to all Class 11 employees and on looking closely into these duties we cannot say that they are  not of a supervisory character and are merely  clerical or  checking.   These  employees  distribute  work,   detect faults,  report for penalty, make arrangements  for  filling vacancies,  to  mention only a few of the duties  which  are supervisory and not merely clerical.  Without discussing the matter too elaborately we may say that we are satisfied that employees  in Class II except the Personal Assistants,  were rightly  classed  by the National Tribunal  as  employed  on supervisory and not on clerical or checking duties.  In view of  the fact that all of them now receive even at the  start "wakes"  in excess of Rs. 500 per month, there is really  no issue  left conceding them, once we have held that they  are working in a supervisory capacity. The  next fundamental point requires narration of  a  little history before it can be stated.  In December 1947 there was an   Industries  Conference  with  representatives  of   the Government  of  India  and the Governments  of  the  States, businessmen,   industrialists   and  labour   leaders.    An Industrial  Truce  Resolution was passed  unanimously  which stated  inter  alia  that increase  in  production  was  not possible unless there was just remuneration to capital (fair return),  just remuneration to labour (fair wages) and  fair prices for the consumer.  The Resolution was accepted by the Central Government.  In 1947 a Central Advisory Council  was appointed which in its turn set up a Committee to deliberate and  report on fair wages for workmen.  ’The Report of  that Committee  has  been  cited over and  over  again.   In  the Standard Vacuum (1)  [1961] 1 L.L.J. 18. 47 Refg.   Co.  v.  Its  Workmen(1),  this  Court   elaborately analysed  the concept of wages as stated by  the  Committee.

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The  Committee divided wages into three kinds: Living  wage, fair  wage  and  minimum wage.  Minimum wage,  as  the  name itself implies represents the level below which wage  cannot be  allowed  to drop. it was universally recognised  that  a minimum  wage,  must be prescribed to prevent  the  evil  of sweating  and for the benefit of workmen who were not  in  a position  to  bargain  with their  employers.  The  received immediate   attention   in  India,  though  there   was   an international Convention as far back as 1928 and the  demand for  fixation of minimum wages extended even to  non-sweated industries.   The result was the Minimum Wages Act of  1948. The Fair Wages Committee understood the term minimum wage is the  lowest wage in the scale below which the efficiency  of the  worker was likely to be impaired.  It was described  as the  "wage  door" allowing living at a  standard  considered socially,  medically  and  ethically to  be  the  acceptable minimum.   Fair wages by comparison were more  generous  and represented  a wage which lay between the minimum  wage  and the  living  wage.   The  United  provinces  Labour  Enquiry Committee classified the levels of living as : (i)  Poverty level;, (ii) minimum subsistence level; (iii)     subsistence plus level, and (iv) comfort level. The concept of fair wages involves a rate sufficiently  high to  enable  the worker to provide "a  standard  family  with food,  shelter, clothing, medical care and family  education of  children appropriate to his status in life but not at  a rate  exceeding  the wage earning capacity of the  class  of establishment  concerned." A fair wage thus is related to  a fair  workload  and the earning capacity.  The  living  wage concept  is one or more steps higher than air wage.   It  is customary  to  quote Mr. Justice Higgins  of  Australia  who defined  it  as  one appropriate for "the  normal  needs  of average  employee,  regarded as a human being  living  in  a civilized  community." He explained himself by  saying  that the  living  wage  must  provide  not  merely  for  absolute essentials  such  as wood, shelter and clothing but  for  "a condition  of  frugal  comfort estimated  by  current  human standards" including "provision for civil days etc. with due regard  for the special skill of the.  Work"Man".It has  now been generally accepted that living wage means (1)  [1961] 1 L.L.J. 227. 48 that  every  male earner should be able to provide  for  his family not only the essentials but a fair measure of  frugal comfort and an ability to provide for old age or evil  days. Fair wage lie., between the concept of minimum wage and  the concept of living wage. During  the  years  wage  determination  has  been  done  on industry-cum-region-basis and by comparing, where  possible, the  wage  scales prevailing in other  comparable  concerns. The Constitutior by Art. 43 laid down a directive  principle :               "The  State  shall  endeavour  to  secure,  by               suitable legislation or economic  Organisation               or   in  any  other  way,  to   all   workers,               agricultural, industrial or otherwise, work, a               living wage, conditions of work ensuring a de-               cent  standard of life and full  enjoyment  of               leisure     and    social     and     cultural               opportunity........." It may thus be taken that our political aim is ’living  wage though  in  actual practice living wage has  been  an  ideal which  has eluded our efforts like an ever-receding  horizon

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and  will so remain for sometime to come.  Our general  wage structure has at best reached the lower levels of fair  wage though some employers are paying much higher wages than  the general average.               In  July  1957  the  Fifteenth  Indian  Labour               Conference met as a Tripartite Conference  and               one of the Resolutions adopted was               "The  recommendations  of  the  Committee   as               adopted with certain modifications, are  given               below:-               (1)               (2)   With regard to the minimum wage fixation               it was agreed that the minimum wage was ’need-               based’  and  should ensure the  minimum  human               needs  of the industrial worker,  irrespective               of any other considerations.  To calculate the               minimum  wage,  the  Committee  accepted   the               following  norms  and  recommended  that  they               should  guide  all  wage  fixing  authorities,               including   minimum  wage   committees,   wage               boards, adjudicators, etc;               (i)   In  calculating  the  minimum  wage  the               standard working class family should be  taken               to  consist  of 3 consumption  units  for  one               earner,  the earnings of women,  children  and               adolescents should be disregarded.               (ii)  Minimum  food  requirements  should   be               calculated  on  the basis of a net  intake  of               2700 calories,               49               as  recommended by Dr. Aykryod for an  average               Indian adult of moderate activity.               (iii) Clothing    requirements    should    be               estimated  at a per capita consumption  of  18               yards  per  annum  which would  give  for  the               average worker’s family of four a total of  72               yards.               (iv)  In respect of housing the norm should be               the, minimum rent charged by Government in any               area for houses provided under the  Subsidised               Industrial  Housing  Scheme  for  low   income               groups.               (v)   Fuel, lighting and other ’miscellaneous’               items of expenditure should constitute 20  per               cent of the total minimum wage.               (3)   While agreeing to these guide lines  for               fixation  of the minimum wage  for  industrial               workers throughout the country, the  Committee               recognised  the existence of  instances  where               difficulties  might  be  experienced  in   im-               plementing  these  recommendations.   Wherever               the   minimum  wage  fixed  went   below   the               recommendations, it would be incumbent on  the               authorities    concerned   to   justify    the               circumstances  which prevented them  from  the               adherence to the norms laid down. The  Association  and the Union desire that  the  wage-floor should   be  the  need-based  minimum  determined   at   the Tripartite  Conference in the above Resolution and that  the emoluments  of the middle class staff should  be  determined with  a proper coefficient.  They suggest a co-efficient  of 120% in place of the80% applied by the National Tribunal, to determine the wages of the middle class staff in relation to the wages of the working classes.  In support of their  case the employees first point to the Directive Principle  above-

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quoted  and add that the First Five Year Plan envisaged  the restoration of "prewar real wage as a first-step towards the living  wage" through rationalisation and modernisation  and recommended that "the claims of labour should be dealt  with liberally  in proportion to the distance which the wages  of different  categories  of  workers  have  to  cover   before attaining  the  living wage standard."  The  employees  next refer to the Second Five Year Plan where it is stated : 50               "21.  Wages               A  wage policy which aims at a structure  with               rising  real  wages requires  to  be  evolved.               Workers’  right  to  a  fair  Wage  has   been               recognised  but in practice it has been  found               difficult  to quantity it.  In spite of  their               best  efforts, industrial tribunals have  been               unable     to     evolve     a      consistent               formula. . . . . . ". (p. 578 para 21). The  establishment  of  Wage Boards, the taking  of  a  wage census  and  the improvement of  marginal  industries  which operate  as a ’drag’ on better industries was  suggested  in that  Plan.   Finally, it is submitted that the  Third  Five Year  Plan has summed up the position thus; in pares 20  and 21 at p. 256 :               "20.     "The    Government    has     assumed               responsibility for securing a minimum wage for               certain  sections of workers, in industry  and               agriculture,  who  are commercially  weak  and               stand in need of protection.  Towards this end               the   Minimum  Wages  Act  provides  for   the               fixation  and revision of wage rates in  these               occupations.   These measures have not  proved               effective   in   many   cases.    For   better               implementation  of the law, the machinery  for               inspection has to be strengthened...........               "21.    Some   broad   principles   of    wage               determination  have  been  laid  down  in  the               Report  of the Fair Wages Committee.   On  the               basis  of agreement between the  parties,  the               Indian  Labour  Conference had  indicated  the               content  of  the need-based minimum  wage  for               guidance  in the settlement of wage  disputes.               This has been reviewed and it has been  agreed               that the nutritional requirements of a working               family  may be reexamined in the light of  the               most authoritative scientific data on the sub-               ject...........               The Association and the Union contend that the               National  Tribunal ought to have accepted  the               Tripartite Resolution and determined the basic               wage in accordance therewith.               The National Tribunal in adjudicating on  this               part  of  the  case  referred  to  the   Crown               Aluminum  Works v. Workmen(1) where at page  6               this Court observes               "Though  social  and economic justice  is  the               ultimate ideal of industrial adjudication, its               immediate objec-               (1)   [1958] 1 L.L.J. 1.               51               tive  in an industrial dispute as to the  wage               structure   is  to  settle  the   dispute   by               constituting such a wage structure as would do               justice  to the interests of both  labour  and               capital, would establish harmony between  them

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             and lead to their genuine and wholehearted co-               operation   in  the  task  of  production   In               achieving this immediate objective, industrial               adjudication   takes  into   account   several               principles   such   as,  for   instance,   the               principle of comparable wages, productivity of               the  trade  or industry, cost  of  living  and               ability  of  the  industry  to  pay         In               deciding 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 deter-mined in the light  of               all relevant considerations. . . . . . ". The   National  Tribunal  pointed  out  that  the   Planning Commission  had set up an official group for study and as  a result  of the deliberations, the group decided  to  prepare notes  on  different aspects of wage so that they  could  be sent  to wage fixing bodies.  Four such notes were drawn  up and were circulated to the 15th Indian Labour Conference and the  15th Indian Labour Conference deliberated on  them  and the Resolution on which reliance is placed by the  employees was  the result.  The National Tribunal, while  appreciating the importance of the Resolution, was not prepared to act on it pointing out that it was not binding but  recommendatory, that Government did not accept it and that the Peserve  Bank not  being a party was not bound by it.  There is  no  doubt that Government in answer to a query from the Pay Commission answered .lm15 "The  Government  desire  me  to  make  it  clear  that  the recommendations  of  the  Labour Conference  should  not  he regarded  as  decisions  of Government  and  have  not  been formally ratified by the Central Government.  They should be regarded  as what they are, namely, the  recommendations  of the   Indian  Labour  Conference  which  is  tripartite   in character.    Government   have,  at  no   time,   committed themselves  to  taking  executive  action  to  enforce   the recommendations". The  National Tribunal, therefore, did not  consider  itself bound in any way by what the Resolution said. 52 The  National  Tribunal then considered  the  Resolution  on merits as applicable to the case in hand observing :               "For the first time in India, norms have  been               crystalised  for the purpose of fixation of  a               need based minimum wage in a Conference  where               the participants were drawn from the ranks  of               Government,   industry  and   labour.    These               recommendations  represent a landmark  in  the               struggle  of labour for fixation of a  minimum               wage  in  accordance with the  needs  for  the               workmen.   The  resolution lays  down  what  a               minimum  wage should be.  It  recognises  that               the minimum wage was "need-based’. The  National  Tribunal,  however,  could  not  accept   the Resolution   because  the  Resolution   standardised   norms applicable  to all industrial workers whatever their age  or the  number  of  years of service or  the  nature  of  their employment.  It felt that there was difficulty in  accepting the  basis  of  three consumption units  at  all  stages  of service  or  the  net intake of 2700 calories  at  all  ages pointing  out  that  this much food  was  what  Dr.  Aykroyd thought  its proper to be consumed.  The  National  Tribunal did  not see the need for changing the co-efficient of  80%.

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The  National  Tribunal  held that in  the  economy  of  our country  the need-based minimum suggested by the  Resolution was  merely an ideal to be achieved by slow stages  but  was impossible of achievement instantly. We  have  been addressed able and very moving  arguments  on behalf of the employees by Mr. Chari.  There can be no doubt that  in  our march towards a truly fair wage in  the  first instance  and  ultimately  the living  wage  we  must  first achieve the need-based minimum.  There is no doubt also that 3  consumption  units formula is, if anything,  on  the  low side.   In determining family budgets so as to discover  the workers’  normal  needs which the minimum  wage  regulations ought  to satisfy, the size of the standard family  is  very necessary to fix.  One method is to take simple  statistical average  of  the  family size and another is  to  take  into account some other factors, such as,               (i)   the  frequency of variations  in  family               sizes in certain regions and employments;               (ii)  the number of wage earners available  at               different stages;               (iii) the increase or decrease in  consumption               at different stages in employment, that is the               age structure and its bearing on consumption.                                     53 The  plain averages laid down in the Resolution may have  to be weighted in different regions and in different industries and  reduced in others.  It is from this point of view  that the Reserve Bank has pointed out that though the consumption units  are  taken to be 2.25, the earning capacity  after  8 years’  service is sufficient to provide for  3  consumption units  as required by the need base formula.   The  question thus  is  whether  the  National Tribunal  is  in  error  in accepting  2.25 consumption units instead of 3 as  suggested in the Resolution. In  our  judgment, the Tribunal was not wrong  in  accepting 2.25  consumption units.  But it seems to us that if at  the start  the  family  is assumed to be 2.25,  it  is  somewhat difficult to appreciate, that the family would take 8  years to  grow  to  3 consumption units.  We are  aware  that  the Pastry  Tribunal thought of 3 consumption units at the  10th year and the Sen Tribunal at the 8th year but we think these miss the realities of our national life.  In our country  it would not be wrong to assume that on an average3 consumption units  must be provided for by the end of 5 years’  service. The  consumption  units in the first five  years  should  be graduated.  As things stand today, it is reasonable to think that 3 consumption units must be provided for by the end  of five years’ service, if not earlier. The  difficulty  in  this case in  accepting  the  need-base formula  is very real.  The Reserve Bank is quite  right  in pointing  out that the minimum wage so fixed would be  above per capita income in our country and that it is not possible to arrive at a constant figure in terms of money.  According to  the Association and the Union, the working class  family wage works out to Rs. 1659 (though the demand is reduced  to Rs. 145 by the, Association and Rs. 140 by the Union)  while according  to  the Reserve Bank to Rs.  107.75.  The  middle class wage, according to the Association, will be Rs. 332-75 while,  according  to the Bank-, Rs. 202.  This  is  because emphasis  is placed on different dietary components  in  the first  case  and the increased differential  in  the  second case.   Further  the food requirement of 2700  calories  was considered  by the Pay Commission to be too high and by  the Planning  Commission  (Third Plan) to be a  matter  for  re- examination.  It will have to be examined what type of  food

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should make up the necessary .calories and how many calories are  the  minimum.   Further  the  amount  of  minimum  wage calculated  on  the need-base formula was said  by  the  Pay Commission  to be extraordinarily high.  This was  also  the view of the Labour Appellate Tribunal in East, 54 Asiatic  Co.  v. Workmen(1).  Both these  documents  contain valuable  calculations and they show the  enormous  increase per saltum which would certainly cause enormous unrest among workmen in general in the country.  It is also to be noticed that  the Reserve Bank, which Mr. Chari claims is  the  best employer,  to  apply the formula, is not  really  the  right place  for  the  experiment.  If the experiment  has  to  be performed  it must have a beginning in a commercial  concern after  thorough examination and a very careful appraisal  of the  effect  on  the  resources  of  the  employer  and   on production.   The  Reserve  Bank  is  not  a   profit-makiag commercial  undertaking.  Its surplus income is handed  over to Government and becomes national income.  Its main sources of  income are discounting Treasury Bills and interests  on, sterling  securities and rupee securities held  against  the note issue.  Income from exchange on remittances, commission on  the management of Public Debt and interest on loans  and advances  to  Banks, and Governments is  small.   It  would, therefore,  appear  that the Reserve Bank is  not  a  proper place  to determine what the need-based minimum wage  should be and for initiating it.  It cannot also be overlooked that even   without  the  formula  it  pays  better  wages   than elsewhere. There  is, however, much justification for the  argument  of Mr.   Chari.    The  Tripartite  Conference   was   a   very representative  body  and the Resolution was passed  in  the presence  of  representatives of Government  and  employers. There must be attached proper value to the Resolution.   The Resolution  itself is not difficult to appreciate.   It  was passed  as indicating the first step towards  achieving  the living wage.  Unfortunately, we are constantly finding  that basic  wage,  instead of moving to subsistence  plus  level, tends  to  sag  to poverty level when there  is  a  rise  in prices.   To overcome this tendency our wage  structure  has for  a long time been composed of two items, (a)  the  basic wage,  and  (b)  a dearness allowance which  is  altered  to neutralise,  if not entirely, at least the greater  part  of the  increased  cost  of living.  This does  not  solve  the problem  of real wage.  At the same time we have  to  beware that too sharp an upward movement of basic wage is likely to affect  the  cost  of production and lead  to  fall  in  our exports and to the raising of prices all-round.  There is  a vicious  circle which can be broken by increased  production and   not  by  increasing  wages.   What  we  need  is   the introduction of production bonus, increased fringe benefits, free  medical, educational and insurance facilities.   As  a counterpart to this capital (1)  [1962] I L.L.J.610. 55 / must also be prepared to forego a part of its return.  There is much to be said for considering the need-base formula  in all  its implications for it is bound to be our  first  step towards  living wage.  As in many other matters relating  to industrial  disputes  the  problem  may,  perhaps,  be  best tackled  by  agreement  between Capital  and  Labour  in  an establishment  where a beginning can be safely made in  this direction. The  next  objection to the Award is in respect of  the  co-

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efficient  chosen  by the Tribunal.  The difference  in  the cost of living between the members of the clerical staff and the subordinate staff has been held to be an increase of 80% over the remuneration of the latter.  This was laid down  by the late Mr. Justice.  Rajadhyaksha in a dispute between the Posts   &   Telegraphs  Department  and   its   non-gazetted employees.  Mr. Justice Rajadhyaksha’s. calculation was made thus :               "In  1922-24 there was a middle  class  family               budget enquiry in Bombay and it was found that               a family consisting of 4.58 persons spends Rs.               138-5-0   per   month.    But   the    average               expenditure of the middle class family in  the               lowest  income group (having  incomes  between               Rs. 75 and 125) per month was Rs. 103-4-0.  In               1923 the cost of living Index figures was  155               whereas  in 1938-39 it was 104.  According  to               these index numbers the cost of living of  the               same family would be 103*10/155 = Rs. 69 class               budget  enquiry consisted of  329  consumption               units.   Therefore for an average family of  3               consume  in 1938-39.  The lowest income  group               in the middles units, the expenditure  required               in 1938-39 would have been     329  = Rs.  63.               According to the findings of the Rau Court  of               Enquiry a working class family consisting  of3               consumption units required Rs. 35 for  minimum               subsistence.   It follows therefore  that  the               proportion of the relative cost of living of a               working class family to that of a middle class               family of 3 consumption units is 35 : 63, i.e.               the cost of living of a middle class family is               about 80 per cent higher than that of a  work-               ing class family." The family budget enquiry and the Rau Court of Inquiry  were in 1922 and 1940 respectively.  The Sen Award was in  favour of  reducing  the  coefficient because  the  income  of  the working classes 56 had  increased  remarkably in most cities after  1939.   The Shastry  Tribunal  actually  reduced it.   The  Central  Pay Commission  fixed .the minimum pay of middle class  employee as  Rs.  90 as against the minimum pay  of  the  subordinate staff  of  Rs.  55, thus making the  coefficient  64%.   The Labour Appellate Tribunal restored the  coefficient to  80%. The Association asked for a coefficient of   120%  but   the Tribunal in its award in Reference No.  1  gave reasons  for not accepting it.  The National Tribunal was in          the advantageous  position of knowing the views of employees  of commercial  Banks  and comparing them with  the  coefficient demanded  here.  Other Unions and Federations did  not  .ask for  such  a high co-efficient.  The National  Tribunal  not having  any data felt helpless in the matter  and  preserved the co-efficient at 80%.  It observed as follows :               "In the year of grace 1962 this Tribunal is in               no better position than the earlier  Tribunals               who have dealt with the matter.  The  inherent               infirmities  in  this  coefficient  have  been               pointedly referred to before me.  I am not  at               all certain whether I would be very much wiser               by  an  enquiry  which  may  be  conducted  at               present.   Expenditure is conditioned  by  the               income received by the class of persons  whose               expenditure  is  being  considered.   By   and               large,  over  a  period  of  time  expenditure

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             cannot  exceed the income.  The  only  pattern               which such enquiry may reveal may be a pattern               based  on the income of the class  of  persons               whose case is being considered."  This  Court  is  in no better position  than  the  National Tribunal  to say what other coefficient should  be  adopted. When  fresh and comprehensive enquiries are  conducted,  the results  would show whether the coefficient should go up  or down.   With  the rise of wages to higher levels  among  the working class the differential is bound to be lower and this is a matter for inquiry.  Till then there is no  alternative but to adhere to the co-efficient already established. We  shall  now take up for consideration some  minor  points which  were argued by Mr. Nargolkar.  The first is a  demand by  the  Association for a combined seniority list  so  that promotion may be based on that list and not upon the reports about the work of the employee.  The National Tribunal dealt with it in Chapter XVII of its award.  Regulations 28 and 29 of the Reserve Bank of India (Staff) Regulations, 1948  deal with seniority and promotion and provide : 57 .lm15 "28.   An  employee confirmed in the  Bank’s  service  shall ordinarily rank for seniority in his grade according to  his date  of  confirmation  in  the grade  and  an  employee  on probation  according  to  the  length  of  his  probationary service." "29.   All appointments and promotions shall be made at  the discretion of the Bank and notwithstanding his seniority  in a  grade no employee shall have a right to be  appointed  or promoted to any particular post or grade." Promotion,  it  will therefore appear, is a matter  of  some discretion  and  seniority plays only a small  part  in  it. This dispute is concemed with the internal management of the Bank  and the National Tribunal was right in  thinking  that the  item of the reference under which it arose gave  little scope  for  giving  directions to the  Bank  to  change  its Regulations.  The National Tribunal, however, considered the question  and  made an observation which we  reproduce  here because we agree with it :               "........ I can only generally observe that it               is  desirable  that wherever it  is  possible,               without detriment to the interests of the Bank               and  without  affecting efficiency,  to  group               employees in a particular category serving  in               different  departments at one centre  together               for  the  purpose  of  being  considered   for               promotion,  a  common seniority list  of  such               employees  should  be  maintained.   The  same               would  result in opening up equal  avenues  of               promotion for a large number of employees  and               there would be lesser sense of frustration and               greater peace of mind among the employees." Seniority  and merit should ordinarily both have a  part  in promotion  to  higher ranks and seniority and  merit  should temper each other.  We do not think that seniority is likely to be completely lost sight of under the Resolutions and Mr. Palkhivala assured us that this is not the case. Mr.  Hathi  next raised the question  of  seniority  between clerks  and typists but we did not allow him to  argue  this point  as no question of principle of a general  nature  was involved.   The  duties  of clerks  and  typists  have  been considered by the National Tribunal and its decision must be taken as final. The  next point urged was about gratuity.  In the  statement

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of the case the Association and the Union had made  numerous demands in regard to gratuity but it appears from paragraph 58 7,  10  of the Award that the dispute was  confined  to  the power  to withhold payment of gratuity on  dismissal.   Rule 5(1)  of the Reserve Bank of India (Payment of  Gratuity  to Employees) Rules, 1947, provides as follows:-               "5  (i) No gratuity will be granted to  or  in               the case of, an employee--               (a)   if  he has not completed service in  the               Bank for a minimum period of 10 years, or               (b)   if  he  is or has  been  dismissed  from               service in the Bank for any misconduct." The Association and the Union demanded modification of  sub- rule (b) quoted above.  The Sastry Tribunal had  recommended that there should be no forfeiture of gratuity on  dismissal except  to the extent to which the misconduct of the  worker had caused loss to the establishment.  The Labour  Appellate Tribunal modified the Sastry Award and decided in favour  of full forfeiture of _gratuity on dismissal.  The Reserve Bank relied on the Express Newspapers (Private) Ltd, and  another v.  Union of India and others(1) in support of the  sub-rule and  also  contended that there was no jurisdiction  in  the National Tribunal to consider this subject under item 20  of Schedule  1  or item 21 of Schedule 11.   The  Reserve  Bank relied  upon item 7 of Schedule I and item 6 of Schedule  H. The demand of the Association and the Union was rejected  by the  National Tribunal.  It had earlier rejected  a  similar demand in connection with the commercial banks.  The Reserve Bank did not, however, pursue the argument before us perhaps in view of the later decisions of this Court reported in the Garment  Cleaning Works v. Its Workmen (2 )  Greaves  Cotton Co.  Ltd. and others v. Their Workmen(3) and Burhanpur Tapti Mills  Ltd. v. Burhanpur Tapti Mills Mazdoor  Sangh(4).   In these cases it was held by this Court that gratuity is not a gift  but is earned and forfeiture, except to recoup a  loss occasioned  to  the establishment, is  not  justified.   Mr. Palkhivala  undertook to get the rules brought in line  with the decisions of this Court. The next demand was with regard to pensions.  In the Reserve Bank there are only two retiring benefits, namely, provident fund  and  gratuity.  There is no scheme for  pensions.   It appears,  however,  that a few employees,  from  the  former Imperial  Bank, who are employed with the State Bank,  enjoy all the three benefits.  The demand,therefore, was that the (1) [1961] 1 L.L.J. 339. (2) [1962] 1 S.C.R. 711. (3) [1964] 1 L.L.J. 342. (4) A.T.R. 1965 S.C. 839. 59 Reserve  Bank  should provide for all  the  three  benefits, namely,  provident fund, gratuity and pension.  The  Reserve Bank   contended   that  the  National  Tribunals   had   no jurisdiction  under  the  Reference to create  a  scheme  of pensions  for the employees.  The National Tribunal did  not consider  the question of jurisdiction because  it  rejected the  demand itself.  In the statement of the case  filed  by the  Association  this decision is  challenged  on  numerous grounds.   The ground urged before us is that  the  National Tribunal failed to exercise jurisdiction in respect of  this demand and indirectly declined jurisdiction by rejecting the demand itself.  The National Tribunal came to the conclusion that  two  retirement  benefits were sufficient  and  it  is difficult  for  us to consider this  without  reopening  the question  on merits of the demand and reexamining the  view-

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point  of  the Reserve Bank.  We stated, therefore,  at  the hearing that we were not inclined to enter into such a large question not of principle but of facts. The  next  demand  was with regard to  the  confirmation  of ,temporary employees.  The Association had filed a number of Exhibits  (Nos.  S. 7 1, S72, S 109 to S 112) and the  Union (R.  45  to R. 47) to show that a very large  proportion  of employees were borne as temporary employees and that it took a  very  long time for confirmation of  temporary  servants. The Bank in reply filed Schedules (T. 67 to T. 69 and T. 112 to  T. 125) The question of confirmation and the  period  of probation are matters of internal management and no hard and fast  rules  can be laid down.  It is easy to see  from  the rival schedules that probationary periods are both short and long.  As no question of principle is involved we decline to interfere  and we think that the National Tribunal was  also justified  in  not giving, an Award of a general  nature  on this point. The  next point is about the extra payment which the  gradu- ates were receiving and the figment of persons in receipt of such  extra amounts in the new scale provided.  In the  year 1946 the Bank accepted the principle of giving an  allowance to  employees who acquired degrees while in employment.   At the time of the present dispute graduates were in receipt of Rs.  10 as special pay.  The question was whether in  making figment  in  the new time scales these amounts  should  have been  treated  as advance increments.  It appears  that  the National  Tribunal reached different conclusions in the  two awards  arising  from  Reference  No.  1  and  the   present Reference.  In the case of CT 165-5 60 Commercial  Banks the figment was on a  different  principle and  Mr. Palkhivala agreed to make fitment in the new  scale taking  into  account  this special ad hoc  pay  as  advance increment. The  next demand made by both the Association and the  Union was that they should be allowed to participate and represent workers  in disputes between an individual workman  and  the Reverse  Bank.  The Tribunal did not accept this  contention for  the very good reason that if Unions intervene in  every industrial  despite  between an individual workman  and  the establishment  the  internal  administration  would   become impossible.  In our judgment, this demand cannot be allowed. The   last contention is with regard to the time  from which the award should operate.  The stand-still agreement reached in 1954 expired in October 1957 and the demand was that  the Award  should  come into force from November 1, 1957  or  at least  from March 21, 1960, the date of the reference.   The National Tribunal has made its award to operate from January 1,  1962.   The Reserve Bank strongly opposes  this  demand. According  to the Reserve Bank the Tribunal acted more  than generously  and  gave  more  to  the  employees  than   they deserved.   The Reserve Bank submits that the employees  had made  exorbitant demands and wasted time over interim  award and, therefore, they cannot claim to have the award  operate from  the date of the reference much less from  November  1. 1957.  The Reserve Bank relies upon the Lipton’s cave(1) and also  contends that the Tribunals decision is  discretionary and  this Court should not interfere with such  a  decision. Reliance  is placed in this connection on  Remington  Rand’s case,  (2  ) Rajkamal Kalamandir (Private)  Ltd.  v.  Indian Motion Pictures Employees Union and others ( 3 ) and Western India Match Company Ltd. v. Their Workmen(4) . In reply  the Association  contends  that  the  demand  was  not  at   all extravagant  or  exorbitant because it was  based  upon  the

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Resolution  of  the 15th Indian Labour  Conference  and  the Reserve Bank itself was guilty of delay after 1957  inasmuch as it asked that the report of the Pay Commission should  be awaited. The solution of this dispute depends upon the provisions of s.   17.A  of  the  Industrial  Disputes  Act,  1947.   That section reads as    follows (1) [1959]1  L.J. 431 (2) [1962] 1 L.L.J. 287. (3) [1963] 1 L.L.J. 318. (4) [1962] 2 L.L.J. 459. 61               "17A.  Commencement of the award.               (1)   An ward (including an arbitration award)               shall  become  enforce-able on the  expiry  of               thirty  days from the date of its  publication               under section 17               Provided that-               (a)               (b)   if the Central Government is of opinion,               in any case where the award has been given  by               a National Tribunal, that  it  will  be expedient  on  public  grounds  affecting national  economy  or social justice to give effect  to  the whole or any part of the award, the appropriate  Government, or  as  the  case may be, the  Central  Government  may,  by notification in the Official Gazette, declare that the award shall  not  become  enforceable on the expiry  of  the  said period of thirty days. (2)  Where  any declaration has been made in relation to  an award under the proviso to sub-section (1), the  appropriate Government  or  the Central Government  may,  within  ninety days from the date of publication of the award under section 17,  make  an order rejecting or modifying  the  award,  and shall,  on  the first available opportunity, lay  the  award together with a copy of the order before the Legislature  of the State if the order has been made by a State  Government, or  before  Parliament, if the order has been  made  by  the Central Government. (3)  Where  any  award as rejected or modified by  an  order made under sub-section (2) is laid before the Legislature of a  State  or  before Parliament,  such  award  shall  become enforceable  on the expiry of fifteen days from the date  on which  it is so laid; and where no order  under  sub-section (2) is made in pursuance of a declaration under the  proviso to  sub-section (1), the award shall become  enforceable  on the  expiry  of  the period of ninety days  referred  to  in subsection (2). (4)  Subject  to the provisions of sub-section (1) and  sub- section  (3) regarding the enforceability of an  award,  the award  shall come into operation with effect from such  date as may be specified therein, but where 62 no date is so specified, it shall come into operation on the date  when the award becomes enforceable  under  sub-section (1) or sub-section (3), as the case may be." Ordinarily,  an  award comes into operation  from  the  time stated  in  sub-s.(1). The Tribunal, however, is  given  the power  to  order  that its award shall  be  applicable  from another date.  The Tribunal stated that the date from  which the  award  should  come into operation was not  a  term  of reference and the Reserve Bank had also contended that there was  no specific demand for retrospective operation  of  the award.  In Wenger & Co., and others v. Their Workmen,(3)  it was  explained  that  retrospective  operation  implies  the

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operation  of the award from a date prior to  the  reference and  the  word ’retrospective’ cannot apply  to  the  period between the date of the reference and the award.  There  was no claim as such that the award should operate from November 1,  1957 and the demand cannot be considered in the  absence of  a  reference to the National  Tribunal.   The  question, however, is whether a date earlier than January 1, 1962  but not  earlier  than March 21, 1960 should  be  chosen.   Sub- section (4) quoted above gives a discretion to the  Tribunal and  this Court in dealing with that discretion observed  in The Hindustan Times Ltd. v. Their Workmen(5) that no general principle  was either possible or desirable to be stated  in relation  to the fixation of the date from which  the  award should operate.  The Tribunal in fixing a date earlier  than that envisaged by the first sub-section justified itself  by stating that much of its time in the beginning was  occupied by  Reference No. 1 and a significant amount thereafter  was occupied  by Reference No. 3 and there was justification  in making the award operate from January 1, 1962.  From the way in which the Tribunal expressed itself in this award and  in the  award  in Reference No. 1 it appears that but  for  the delay that took place the Tribunal would have made the award to operate as laid down in sub-s. (1).  It has been ruled in the three cases-Remington Rand’s case,(2) Rajkamal’s case (4 )   and  Western  India  Match  Company’s   case(5)-that   a discretion "exercised on judicial principles by the Tribunal about the commencement of the award should not be interfered with.  Nothing was shown to us why the award should be  made to commence earlier.  Both sides were to blame in regard  to the time taken up (1)  [1963] 2 L.L.J. 403. (3)  [1962] 1 L.L.J. 287. (5) [1962] 2 L.L.J. 459. (2)  [1964] 1 S.C.R. 234. (4)  [1963] 1 L.L.J. 318.      63 and the Tribunal perhaps found it difficult to reach aconclusion earlier in view of the number of the references beforeit. In the    circumstances,   it  cannot  be  said   that   the selection ofJanuary 1,     1962, when the inquiry in  the present reference wascompleted,     except           the preparation of the Award, was bad. Inany event  this  was a  matter of discretion and it cannot be said that the  dis- cretion  has not been exercised on judicial principles.   We decline to interfere. In the result the appeal fails and it will be dismissed.  It may,  however,  be said that the appeal  would  have  partly succeeded  but  for the creation of new scales  of  pay  for Class  11  employees  and acceptance of some  of  the  minor points  by the Reserve Bank.  In this view of the matter  we make no order about costs.                              Appeal dismissed. 64