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PETITIONER: CLERKS OF CALCUTTA TRAMWAYS

       Vs.

RESPONDENT: CALCUTTA TRAMWAYS CO.  LTD.

DATE OF JUDGMENT: 11/10/1956

BENCH: MENON, P. GOVINDA BENCH: MENON, P. GOVINDA BHAGWATI, NATWARLAL H. AIYYAR, T.L. VENKATARAMA DAS, S.K.

CITATION:  1957 AIR   78            1956 SCR  772

ACT: Industrial  dispute-Dearness  allowance-Clerks-Middle  class employees-Whether  uniform rates to be adopted-Decisions  of Tribunals-Power of the Supreme Court to interfere.

HEADNOTE: It  is  well  settled that the decisions of  a  Tribunal  on questions of fact are final and that the Supreme Court would interfere  only  in  cases where (1) the  Tribunal  acts  in excess  of  the  jurisdiction conferred upon  it  under  the statute  or  regulation creating it or where  it  ostensibly fails  to  exercise a patent jurisdiction; (2) there  is  an error apparent on the face of the decision; (3) the Tribunal has   erroneously   applied  well-accepted   principles   of jurisprudence. The  Bengal  Chamber  of Commerce of  which  the  respondent Company  was  a member, had made an investigation  into  the cost  of  living index for the middle  class  families  and, fixed the dearness allowance payable to the employees of the mercantile   firms  in  Calcutta.   Before  the   Industrial Tribunal as well as the Labour Appellate Tribunal the  claim was  put forward on behalf of the appellants (the clerks  of the respondent Company) that the dearness allowance for them should  be  at the same rates as those decided upon  by  the Bengal Chamber of Commerce in respect of the middle  classes to which the appellants belonged and they contended that the procedure adopted by the Labour, Appellate Tribunal  leaving out  20 points of the living cost index  un-neutralised  was not justifiable. Held,  that  in matters of the grant of  dearness  allowance there cannot be a hard and fast rule applicable to all kinds of  employees and except in the very lowest class of  manual labourers it is not proper to neutralise the entire rise  in the  cost  of  living  by  dearness  allowance.   There  are different grades among the middle classes and the appellants cannot claim to have the same rates of dearness allowance as those  fixed for the clerks of the mercantile firms  by  the Bengal Chamber of Commerce.

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JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 105 of 1954. Appeal  by special leave from the judgment and  order  dated November 6, 1952, of the Labour Appellate Tribunal, Calcutta in Appeal No. Cal-3 of 1952 773 arising  out of the award dated September 25, 1951,  of  the Court  of District Judge, Industrial Tribunal,  Calcutta  in Case No. VIII-23 of 1951. S.   C.  Isaacs,  A.  K. Datt and  Sukumar  Ghose,  for  the appellants. M.   C. Setalvad, Attorney-General for India, D. B. Das  and S. N. Mukherji, for the respondent. B.   Sen  and  P.  k. Bose, for Intervener  (State  of  West Bengal). 1956.  October 11.  The Judgment of the Court was  delivered by GOVINDA MENON J.-This appeal is by special leave against the decision   of  the  Labour  Appellate  Tribunal  of   India, Calcutta, which modified the award, passed by the Industrial Tribunal,  Calcutta, in the matter of a dispute referred  to it  by the Government of West Bengal, for adjudication  with regard  to  the rates of dearness allowance for  clerks  and Depot  cashiers,  employed by the  Calcutta  Tramway’s  Coy. Ltd., numbering about 600, out of a total of 10,000 workmen. Disputes  having arisen between the workmen of the  Calcutta Tramways  Coy,  Ltd.  (which may hereafter  be  called  ’The Company’)  on the one hand, and the employers on the  other, relating  to the dearness allowance payable to the  workmen, there  were two previous awards, one dated May 16, 1947,  by Sri S. N. Guha Roy, and the other dated October 27, 1948, by Sri  P. K. Sircar.  Both of these awards related to all  the employees  of  the Company and not to the clerks  and  Depot cashiers  alone.  Subsequently a reference was made  by  the West  Bengal  Government  on June  13,  1951,  concerning  a dispute relating to the dearness allowance of the workmen of the Company, excluding clerks and Depot cashiers.  There was an  award and an appeal, and in that appeal the Appel.  late Tribunal  increased the dearness allowance by Rs. 7/8/-  for workmen  in  the pay ranges below Rs. 50 and up to  the  pay range of Rs. 250 and by a flat rate 774 of Rs. 5 in the higher pay ranges taking the cost of  living index of the workmen class at 370 points. In  the present award, which relates to the clerks  and  the Depot  cashiers  alone,  the Industrial  Tribunal  gave  Rs. 47/8/-  as dearness allowance for a pay range of Rs.  51  to Rs. 100 and provided for a progressive increase of Rs. 5 for each    slab    of    Rs.   50    in    the    pay    range. The Appellate Tribunalincreasedthe amounts so awarded by Rs. 2/8/- more than what was granted to the other workmen of the Company.   The  cost of living index for  the  middle  class families  had  been fixed by an investigating  body  of  the Bengal  Chamber of Commerce during the relevant year at  382 points,  whereas the index in the case of working class  was fixed  at 370 points.  The increased amount awarded for  the various  pay ranges and shown in the decision of the  Labour Appellate  Tribunal  which need not be repeated  again,  was founded  on these cost of living indices though  the  amount was  not  the same as recommended by the Bengal  Chamber  of Commerce. Before  the  -Labour  Appellate Tribunal,  as  well  as  the Industrial Tribunal, the claim put forward on behalf of  the clerks  and Depot cashiers was that the  dearness  allowance

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should  be on the same rates as decided upon by  the  Bengal Chamber of Commerce of which the company is a member and  no difference should have been made between the dearness allow- ance recommended by the Bengal Chamber of Commerce and  that to be awarded by the Industrial Tribunal.  In fact, what was urged  was that the recommendation of the Bengal Chamber  of Commerce ought to have been accepted in its entirety for the reason not only that the Company is a first class member  of the  Chamber but also that the class of persons, namely  the middle  classes  for whom the recommendation  was  intended, includes  clerks and Depot cashiers of the Company as  well, and  the  same  having  been  accepted  ,by  the  Mercantile Tribunal which dealt with the dearness allowance payable  to the  employees  of  the mercantile firms  in  Calcutta,  the Industrial  Tribunal,  as  well as  the,   Labour  Appellate Tribunal, should have 775 followed  the  same.  The learned Judges  of  the  Appellate Tribunal  held that those recommendations were made  to  the mercantile  firms where the workmen consist  practically  of the  clerical and subordinate staff as -opposed to  Tramways Company  where  the large percentage of  workmen  belong  to other categories, the clerks and Depot cashiers being only a small  minority, though they found that the cost  of  living index  found  by the Bengal Chamber of  Commerce  should  be accepted  as  the  criterion  for  awarding  the   increased dearness  allowance  in  the case of the  employees  of  the Company as well. On  behalf  of the appellants it is urged before us  that  a different mode of treatment than the one recommended by  the Bengal Chamber of Commerce should not have been resorted  to in  the  case of the appellants, for the reason  that  those recommendations  are intrinsically  reasonable,  considering the  uniformity  of life and modes of habit  of  the  middle classes to which the clerks and Depot cashiers belong.  The, respondent  Company being a member of the Bengal Chamber  of Commerce should, instead of ignoring the recommendation have acted  upon it as a mandate, so that its action as a  member should  not  be inconsistent with that  followed  by  others especially  since there have been no valid  reasons  alleged for the non-acceptance of the recommendation.  It-is further urged  that there is no acceptable defence put forward  that the   abovementioned  recommendation  will  not   apply   to institutions  having  a  mixed  staff  as  the  Company   in question.  On the other hand, what is stated in the  written statement  of the Company is that according to the  previous award it had been paying a uniform sliding scale of dearness allowance  for  all  categories of workmen  as  detailed  in Paragraph  6(b).  It is, therefore, contended that what  the Industrial  as  well as the Appellate Tribunal  should  have done  was  to have evolved a principle to fix  the  dearness allowance in relation to the’ basic salaries and the cost of living  index,  as  that  alone  would  satisfy  the  recom- mendations of the Bengal Chamber of Commerce. 776 ,We have, therefore, to see whether in following the  course now  adopted  by the Tribunals below they have  ignored  any legal principle or acted in violation of any statute.  There can  be no doubt whatever that if the scheme  adumbrated  by the  Bengal  Chamber of Commerce is adopted in the  case  of clerks  and  Depot cashiers, they would get amounts  far  in excess and out of all proportion to what were awarded to the other  workmen whose appeal had already been disposed of  by the  Appellate Tribunal though it has to be recognized  that the  cost of living index in the case of the appellants  has

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to be considered to be more than the index of workmen  whose avocations are the result of physical labour rather than  of mental  faculties.  In short, the clerks and Depot  cashiers should be considered as the white collared fraternity. In  these  circumstances, we have to find  out  whether  the procedure followed by the Labour Appellate Tribunal,  namely leaving out 20 points un-neutralised and allowing Rs. 5  per 20  points  rise in the living cost index  but  taking  into consideration a higher living cost index of 382 in the  case of the appellants as compared with the average index of  the workmen of 370, is a justifiable method to be adopted. It  is  difficult to hold that the middle  classes  in  this country  can be said to form a separate stratum  of  society even  in a city like Calcutta having the same mode of  life, the  same  necessities, uniform requirements  and  comforts. There are different grades even among the middle classes and it  is unwise to predicate the same degrees of comforts  and necessities for everyone who is said to belong to the middle classes.  Such being the case, to say that the clerks in the mercantile firms can be considered equal in all respects  to the  600  clerks and Depot cashiers of the  Company,  is  an argument  which  cannot be accepted as  sound.   The  Labour Appellate   Tribunal   has  not   completely   ignored   the recommendations of the Bengal Chamber of Commerce, for it is seen that in raising the amount awarded by the Industrial 777 Tribunal the Appellate Tribunal has based its conclusion  on the higher cost of living index in the case of middle  class employees. Such being the case, the point for consideration is  whether any  question of principle is involved, so that  this  court might  interfere  with  the conclusions arrived  at  by  the Labour  Appellate  Tribunal.   Wide  and  undefinable   with exactitude  as the powers of the Court are  (see  Dhakeswari Cotton  Mills  Ltd.  v. Commissioner  of  Income  Tax,  West Bengal(1)),  it  is  now well  settled  that  generally  the necessary  pre-requisites for this court’s  interference  to set   right   decisions  arrived  at  by   Tribunals   whose conclusions on questions of fact are final can be classified under  the  following  categories, namely,  (1)  where’  the Tribunal  acts in excess of the jurisdiction conferred  upon it  under the statute or regulation creating it or where  it ostensibly  fails  to exercise a patent  jurisdiction;  (ii) where there is an apparent error on the face of the decision and  (iii) where the Tribunal has erroneously applied  well- accepted  principles  of  jurisprudence.  It  is  only  when errors  of  this nature exist, that interference  is  called for.  In the present case the appellants have not been  able to  show that there is any deviation from those  principles. If  the  Tribunal  below had failed  to-resort  to  a  basic principle, then something might have been said but what  has been  done is, that in computing the dearness  allowance  it has  considered  various methods and adopted  one  of  them. That  being the case, it is’ difficult to say that there  is any question of principle at all. The  report  of the Central Pay Commission at  page  46,  in Paragraph 71, made the following recommendation: "Without adopting such a complicated procedure, we think  it sufficient  to  provide by slabs for  persons  on  different levels of pay, as shown in the accompanying table which also provides for diminishing rates of dearness allowance as  the cost  of living index falls, taking the stages by 20  points at a time". (1)  [1955] 1 S.C.R. 941, 949. 778

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It  refrained  from recommending the neutralisation  of  the entire higher cost of living by means of dearness allowance. The  report of the Committee on Fair Wages appointed by  the Government  of  India  in  Chapter  IV,  dealing  with  Wage Adjustments considered in paragraph 43 the various modes and methods  of granting relief to meet the burden of  increased cost  Of living and came to the conclusion that there is  no practice  of uniformity in the extent of compensation  given to  employees  to  meet the increased cost  of  living.   It observed as follows:- "The  Pay  Commission has accepted, the principle  that  the lowest paid employee should be reimbursed to the full extent of  the  rise  in  the  cost  of  living  and  that,  higher categories  of  employees should receive a  diminishing  but graduated  scale of dearness allowance.  The Pay  Commission has rejected the principal of a flat rate for all categories of employees, irrespective of their basic salaries". Finally  it  came  to the conclusion "that  for  the  lowest categories  of  employees  the target  should  obviously  be compensation to the extent of 100 per cent. of the  increase in  the cost of living.  For categories above the lowest  we agree  that the same consideration will not apply.   A  flat rate equal to the rate allowed to the leastskilled worker is not likely to satisfy higher categories". In  the analysis regarding the Industrial Awards, issued  by the Government of India, Ministry of Labour, the question of dearness  allowance is considered somewhat elaborately.   At page  33  there  is a discussion regarding  the  linking  of dearness  allowance to the cost of index numbers and  as  to whether  a flat rate of dearness allowance  irrespective  of the  income  group should be allowed or not.   They  further considered the linking of dearness allowance to the cost  of living  index numbers on the scale of income groups, but  at rates  diminishing with the income received.  A  perusal  of the fairly elaborate discussion in Chapter 779 III  shows  that  there  cannot be  a  hard  and  fast  rule applicable to all kinds of employees.  Very much will depend upon  the conditions of labour, the nature of  the  locality and the mode of living. In  Buckingham and Carnatic Company Ltd., Madras v.  Workers of  the Company(1) the Tribunal considered the  question  of neutralisation  of  the rise of the cost of  living  by  the grant of dearness allowance and was of the opinion that cent per cent neutralisation cannot be allowed, as it would  lead to a vicious circle and add fillip to the inflatory  spiral. It further held that there was no reason why the  Industrial worker  should not make sacrifices line all other  citizens. We  can now take it as settled that in matters of the  grant of  dearness  allowance except tothe very  lowest  class  of manual  labourers whose income is just’ sufficient  to  keep body  and  soul  together, it is  impolitic  and  unwise  to neutralise the entire rise in the cost of living by dearness allowance.  More so in the case of the middle classes. The  criterion  to be adopted in the  fixation  of  dearness allowance is also considered in Mahomad Rai Akbarali Khan v. The  Associated  Cement Companies Limited(2)  where  similar principles are discussed. On  behalf  of the appellants our attention was  invited  to certain   observations   contained   in   The    Millowners’ Association, Bombay v. The Rashtriya Mill Mazdoor  Sangh(3), but  we  do  not  think  that  any  different  principle  is enunciated  there at all.  Mr. Isaacs, the  learned  counsel for  the  appellants, laid great stress on the  decision  in Workmen  of the Firestone Tyre and Rubber Company  of  India

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Ltd.,  Bombay v. Firestone Tyre and Rubber Company of  India Ltd., Bomba(4) where the Tribunal expressed the opinion that dearness  allowance  is intended to neutralise rise  in  the cost of living and as there is a well recognised  difference between  the clerical staff and other workmen in their  cost of living, the latter are not entitled. (1) [1952] L.A.C. 490, 519, 520.  (2) [1953] L A.C. 677. (3) [1955] L.A.C. 371.           (4) [1953] L.A.C. 509. 101 780 to  claim  the allowance on-the same basis.  From  this  the learned  counsel  contends that the recommendations  of  the Bengal  Chamber of Commerce should be accepted in toto.   In our  opinion, the decision does not help the point  of  view put  forward  on behalf of’ the appellants.   In  fact,  the Labour Appellate Tribunal has made a distinction between the physical  labourers  and the clerks and  Depot  cashiers  in whose  work  it is not alone the physical exertion  that  is essential but some kind of mental and brain work as well and accordingly  the  higher  cost of living  index  taken  into account. In  such  circumstances,  it seems to  us  that  the  Labour Appellate Tribunal has, after considering the various points of  view,  come to the correct conclusion  in  awarding  the dearness allowance it did.  There is no question of -law  or principle  involved and the appeal has to be dismissed  with costs of the Calcutta Tramways Coy.  Ltd. The  State of West Bengal, which has intervened  during  the appeal, will bear its own costs. 781