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PETITIONER: H.M.T. LIMITEDWORMEN OF INDIAN TELEPHONE INDUSTRIES LTD. AND

       Vs.

RESPONDENT: H.M.T. HEAD OFFICE EMPLOYEES’ ASSO. AND ORS.THE MANAGEMENT O

DATE OF JUDGMENT:       29/10/1996

BENCH: J.S. VERMA, B.N. KIRPAL

ACT:

HEADNOTE:

JUDGMENT:          [With C.A. Nos. 1723, 1724, 1725, 1726/90] &                CIVIL APPEAL NO. 13380 OF 1996         [Arising Out of S.L.P.(C) No. 5345 of 1990]                       J U D G M E N T KIRPAL, J.      Leave granted.      The award  of the  National Industrial Tribunal, Bombay (hereinafter referred  to as’ the Tribunal’) adjudicating on the demands  of the  unions of  five Bangalore  based public sector undertakings  for parity  in minimum  wage  with  the minimum wage  payable to  the employees  of  another  public sector undertaking  namely; Bharat Heavy Electricals Limited (hereinafter referred  to as  ’BHEL’) is  challenged by  the managements as well as the workmen in these appeals.      The minimum  wage of  the lowest cagetory of workmen of five Bangalore  based  public  sector  undertakings  namely; Bharat  Electronics  Limited  (hereinafter  referred  to  as ’B.E.L.’), Bharat Earth Movers Limited (hereinafter referred to as  ’B.E.M.L.’), Indian    Telephone  Industries  Limited (hereinafter  referred   to   as   ’I.T.I.   ’),   Hindustan Aeronautics Limited  (hereinafter referred  to as  ’H.A.L.’) and Hindustan  Machine Tools   Limited (hereinafter referred to as  ’H.M.T.’) was  the same  in all  these public  sector undertakings. By  settlements entered  into on various dates in 1974  between the  managements and  the workmen  of these five undertakings  except I.T.I.,  the minimum  wage of  the lowest category of workmen was fixed at Rs. 300/- consisting of basic  pay of Rs. 200/- + Dearness Allowance of Rs. 100/- which was  linked  with  Local  Consumer  Price  Index.  The minimum wage  in I.T.I.  was also  fixed at  Rs.  300/-.  As dearness allowance  was linked with All India Consumer Price Index, on the basis of the Index prevailing as on 1,12.1973, the Dearness  Allowance payable  on the  basic wage  of  Rs. 200/- came  to  Rs.  91/-  and,  hence  in  order  to  bring uniformity in  the minimum wage, the employees of the I.T.I. were paid  City Compensatory Allowance (hereinafter referred to as  ’C.C.A.’) of Rs. 9/- at 4 1/2 % of the basic pay. The settlements in  these five  undertakings were to be in force till 31.12.1976.

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    In BHEL,  with whom  parity was  being claimed  by  the workmen  of   these  five  industries,  an  agreement  dated 17/18.9.73 had  been entered  into whereby  the minimum wage was fixed  at Rs.  258.70/- comprising  of basic  pay of Rs, 200/- and  Dearness Allowance  of Rs.  58/- at the All India Consumer Price  Index of  200 points  for industrial workers with 1960  base. A  revision was effected by agreement dated 17/18.1.1974 and the minimum wage of the workers of BHEL was fixed  at  Rs.  300/-.  This  minimum  wage,  and  the  wage structure constructed  on this  basis, came  into force with effect from  1.9.1973 and was to be in force for a period of four years. This agreement expired at the end of August 1977 and negotiations  for the  review and  revision of  the same w.e.f. 1.9.1977  were commenced  between the  management and the workers  in March,  1978. A  final agreement between the management and  the workers  was reached  on 8/9-1-1980.  By this agreement,  the wages  as on  1.1-1978 for an unskilled employee in  BHEL at  the lowest level as fixed at Rs. 500/- per month  at All  India Consumer Price Index of 327 points. This agreement  was to  be effective  from 1.1.1978  and was implemented in April, 1980 .      The 1974 settlements between the managements of B.E.L., I.T.I., H.A.L., and B.E.M.L. expired on 31.12.1976 and hence the workmen  unions submitted  charters of  demands in early part of 1977. Conciliation proceedings were held between the managements of  five public  sector undertakings  and  their workmen and amicable settlements were arrived at between the parties on 25.5.1978. Term number 1 of these settlements was uniform and is as follows:      "The Union  agrees  to  accept  the      offer of the management with regard      to pay  scales, quantum of Dearness      Allowance and  Fitment benefits and      method of  fixation of  pay in  the      revised pay  scales as  detailed in      Annexure-1.   This,    however   is      without prejudice  to  the  Union’s      right to  take  up  the  issues  of      revision of  minimum wages  and the      enhancement   of    the   rate   of      neutralisation     of      Dearness      Allowance beyond Rs. 1.30 per point      with the Government of India and if      the Government  of India  agrees to      the  improvement   in  the  minimum      wages  or  the  Dearness  Allowance      neutralisation rate  the management      agrees    to     make     necessary      modification to  the minimum  wages      and       Dearness        Allowance      neutralisation       rata       and      consequential  adjustment   in  the      wage structure in consultation with      the Unions."      The said settlements dated 25.5.1978 did not settle all the  demands   of  the   workmen.  Conciliation  proceedings continued which, therefore, resulted in different memorandum of settlements  which were entered into in case of H.A.L. on 30.8.1978, in  B.E.M.L. on 31.8.1978, in I.T.I. on 1.9.1978, in H.M.T. on 2.9.1978 and in B.E.L. on 3.9.1978.      These settlements  contained different, though somewhat similar, terms  with regard  to revision  of wages.   In the settlement of  B.E.L.,  term  Nos.  1.0  and  1.1.  were  as follows:      "1.0 This  agreement   is   without

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    prejudice to  the Union’s  right to      take up  the issues  of revision of      minimum wages  and the  enhancement      of the  rate of  neutralisation  of      Dearness Allowance  at Rs. 1.30 per      point rise/fall  in the  local CPI,      with  the  Government  and  if  the      Government  of   India  agrees   to      improve the  minimum  wage  or  the      neutralisation rate beyond Rs. 1.30      per point, the Management agrees to      make necessary modifications to the      minimum wage,  D.A.  neutralisation      rate and  consequential adjustments      in   the    wage    structure    in      consultation with the Unions.      1.1  If    the    minimum    wages,      comprising  of   pay  and  Dearness      Allowance,  or   if  the   rate  of      neutralisation     of      Dearness      Allowance is  altered to  a  higher      rate  than   agreed  to   in   this      settlement in any other Engineering      Central Public  Sector  Undertaking      such  as  BHEL,  H.M.T.  etc.,  the      Management agrees to make necessary      modifications   in   the   relevant      clauses      and      consequential      adjustments, in  consultation  with      the Unions."      Similar terms  were incorporated  in the settlements in the cases of B.E.M.L. and H.A.L.. In the cases of I.T.I. and H.M.T., however,  there was no term similar to 1.0 or 1.1 of the B.E.L. settlement but the above- mentioned term 1 of the settlement dated  25.5.78 was  reiterated in the preamble of their settlements.  At the  time when these settlements took place in  1978, negotiations  were taking  place between the managements and  the workers  of BHEL which had not resulted in a  final settlement.  It is  for this  reason that in the aforesaid clause  1.1 reference  was made  to the settlement which might  take  place  between  the  management  and  the workers  of   BHEL  and   which  could   result  in  certain modifications being  made in  the relevant  clauses  of  the settlement.      After  the   settlement  was  arrived  at  between  the management and  the workers  of BHEL  on 8/9.1.80  which had resulted in  the revision  of wage at the lowest level of an unskilled employee  to Rs.  500/- P.M.  w.e.f.  1.9.78,  the unions representing  the workmen in the five Bangalore based public sector undertakins raised the question of revision of minimum wage  in these industries as per the minimum wage as settled in  BHEL. A joint action forum (hereinafter referred to  as   ’JAF’)  of   the  unions   of  five  public  sector undertakings at Bangalore and Kolar Gold Fields (which was a unit of  BHEL) was formed. On 12.9.1980, this JAF formulated a common proposal for submission to the management and accordingly, the negotiating unions submitted common demands to the  respective undertakings in the matter of revision of wages. These  demands primarily  related to  the  claim  for addition of Rs. 30 to the existing scales of pay.      The aforesaid  demands received  no response  whereupon the  negotiating  unions  gave  notices  to  the  respective managements of their decision to go on indefinite strike any day after  10.12.1980. Conciliation  proceedings between the managements and the unions then commenced and the strike was

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postponed to 26.12.1980 on which date the workmen of all the five undertakings  struck work  after they rejected an offer which had  been made  by the  managements  just  before  the commencement  of  the  strike.  After  the  commencement  of strike,   conciliation    proceedings   again   started   on 27.12.1980. On  5.2.1981, when no agreement could be arrived at, the conciliation officer submitted his failure report.      The strike  in the  H.M.T. watch factory was called off on  6.3.1981  and  thereafter  the  J.A.F.  took  a  general decision on  12.3.1981 to  withdraw the  strike. The  strike was,  accordingly,  withdrawn  on  14/15/16.3.1981  and  the workers resumed  work on  subsequent dates.  No negotiations for settlement  of the  demands commenced  and thereupon,  a decision was  taken by J.A.F. to laun h an indefinite hunger strike which  commenced  on  29.4.1981  and  continued  till 10.5.1981. The  managements of  B.E.L., B.E.M.L., I.T.I. and H.A.L. declared a lock out in all their units located at Bangalore w.e.f. 6.5.1981 on the ground that the strike had  in  fact  not  been  withdrawn  and  that  the  workers Continued the  strike and  they  also  carried  out  violent activities inside the factory. Lock out was also declared at Kolar Gold  Fields for  the  same  reason  W.e.f.  8.5.1981. Thereafter, fresh  conciliation proceedings  were  commenced and the  lock out was lifted w.e.f 2/3.6.81 and a settlement dated 9.6.1981  was arrived  at between  the managements and the unions.  The terms of settlement in the cases of all the five  Bangalore   based  public   sector  undertakings  were identically worded  and these  terms of  settlement were  as under:      (i)  The wage settlements dated 3rd      and 4th  September, 1978  which are      to expire of 30.6.1981 are extended      upto 31.12.1982.      (ii) The workmen  on the  rolls  of      the company  as on the date of this      settlement will  be paid a lump sum      of Rs.  700/- (Rupees Seven Hundred      only).      (iii) With  effect  from  1.1.1981,      for the period they are entitled to      wages, they  would also  be paid an      ad-hoc allowance  of Rs.  25/-  per      month. This  amount will  count  as      pay for all purposes except for pay      fixation.      (iv  All other terms and conditions      relating  to  pay,  allowances  and      other monetary benefits in terms of      the settlements dated 3rd September      and  4th   September,   1978   will      continue for the extended period of      the settlement.      (v)  The    Union    assures    the      Management that they will assist in      the  maintenance   of   discipline,      improving productivity and ensuring      smooth production in the factory."      Even after the aforesaid settlement dated 9.6.1981, the workmen continued  to press  for wage  parity of the minimum wage with  BHEL w.e.f.  1.1.1978  on  the  ground  that  the settlement of  9.6.1981 did  not settle  the demands made by the unions  on 12.9.1980.  On writ  Petitions being filed by the unions  against B.E.L.,  I.T.I., B.A.L and B.E.M.L., the Karnataka  High  Court  vide  its  decision  dated  9.8.1982 directed the  Government of Karnataka to make a reference of

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the industrial  dispute to  the appropriate  tribunal  under Section 10 of the Industrial Disputes Act, 1947 (hereinafter referred to  as ’the  Act’). This reference was accordingly, made  to  the  State  Industrial  Tribunal  by  order  dated 23.4.1983. Two questions were referred to the said Tribunal; one was  in respect of parity with employees of the BHEL and the second  was about  the illegality of strike and the lock out. It  appears that  the Governments  or West  Bengal  and Maharashtra  had   also  made   similar  references  to  the respective State Tribunals. Faced with this situation, where references had been made to the tribunals in three different states, the  managements approached  the Central  Government and thereupon  reference was made to the National Industrial Tribunal by  the Central Government on 10/30.5.1984. To this reference the  unions of  five Bangalore based public sector undertakings, which  were situated  outside Bangalore.  were not made  parties and  a writ  petition  was  filed  in  the Karnataka  High  Court,  which  by  order  dated  20.2.1985, directed the  Central Government to consider the question of including  the   State  unions   in  the   said   reference. Accordingly, by order dated 3.5.1985 reference in respect of all the  units, all  regional  and  sales  offices  of  five undertakings was  mads. The  terms of  the reference were as follows:      "Are  the   workmen  justified   in      demanding   revision    of    wages      bringing their  wages on  par  with      BHEL  in   view  of   the  relevant      clauses in the 1973 settlement?      2.   If  so,  what  should  be  the      quantum and  the period  for  which      such quantum  is to be paid in view      of the  BHEL settlement  subsisting      till the end of August, 1982?      3.   Are the  workmen of  Hindustan      Machine Tools Ltd., Bangalore, (ii)      Bharat Earth Movers Ltd., Bangalore      and Kolar Gold Fields,      (iii) Indian  Telephone Industries,      Bangalore      (iv) Bharat    Electronics    Ltd.,      Bangalore and      (v)  Hindustan  Aeronautics   Ltd.,      Bangalore  justified  in  going  on      strike w.e.f. 26.12 1980? If so, to      what   relief   are   the   workmen      entitled?      4.   Are  the  managements  of  (i)      Hindustan   Machine   Tools   Ltd.,      Bangalore; (ii) Bharat Earth Movers      Ltd.,  Bangalore   and  Kolar  Gold      Fields,  (iii)   Indian   Telephone      Industries Bangalore,  (iv)  Bharat      Electronics Ltd., Bangalore and (v)      Hindustan     Aeronautics     Ltd.,      Bangalore  justified  in  declaring      lock outs  of their  establishments      with  effect   from   8/9.5.81   to      4.6.1981 at  Kolar Gold  Fields and      7.5.1981    to     2/3.6.1981    at      Bangalore? If  not, are the workmen      entitled to  wages for the lock out      period or to any other relief?"      In the  common statement  of claim filed by the unions, it  was   contended  that  the  workmen  were  justified  in

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demanding that  wages and wage structure be revised so as to bring the  minimum wages on par with that obtaining in BHEL. It was  a contention  of the unions that the relevant clause in 1978  settlement gave liberty to the workmen to raise the question of  wage revision  as and  when there  was a  final settlement in  BHEL or  as and  when the Government of India communicated a  change of  attitute in  the matter  of  wage fixation.  The   unions  contended   that  in  view  of  the settlement dated 8/9.1.1980 in BHEL, the relative difference in the minimum wage of the unskilled workmen in BHEL and the workmen in  the units  of H.A.L.,  B.E.L., B.E.M.L.,  and at Kolar Gold Fields was as follows:                       BHEL            BEL   BEML  HAL Basic wage            Rs. 335.00          Rs. 305.00 Dearness Allowance    Rs. 165.00          Rs. 125.00 House Rent Allowance  Rs. 39.00           Rs. 35.00 City Compensa-        Rs. 15.60           Rs.   - tory Allowance                     ----------------------------------                      Rs. 554.60           Rs. 465.00                     ----------------------------------      In  addition   in  BHEL  settlement      there was  provision for giving one      more increment  in revised scale to      311 workmen  on  the  roll  of  the      company  on   the   date   of   the      settlement.      With regard  to  quantum  of  increase  of  wages,  the unions’ claim was as follows:      "1.  The  existing   scale  of  pay      should be  restructured  by  adding      Rs. 30.00 at the minimum and at all      stages in each scales.      2.(a) The irreduciable minimum D.A.      for KGF  as on  1.9.1978 should  be      revised to  Rs. 133  as against Rs.      128/-.      (b)  For the purpose of computation      of variable D.A. All India Consumer      Price  Index   figures  should   be      adopted instead  of local  consumer      price index.      3.   For  the  existing  employees,      basic pay  should be  fixed in  the      following manne:      (a)  Add Rs. 30.00      (b)  Add one increament.      (c)  Add  one  more  increament  in      lieu of  ’next  higher  state’  (to      avoid anomalies’.  and  to  provide      for    consequential    adjustments      benefits.      4.   City  Compensatory   Allowance      should be paid at the rate of 6% of      the basic wages.      5.   The fitment  benefit which  is      not  extented   to  the   employees      joining after the date of agreement      should be extended to them"      The  managements   in  their  reply  refuted  the  said demands. The  main contention, in this regard, was that when the demand  had been  raised for  revision of  pay after the settlement in  BHEL had  been arrived  at, then the disputes had been  settled with  the payment  of ad-hoc amount of Rs. 700/- and an additional ad-hoc payment of Rs. 25/- p.m. from

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1.1.1981 and,  therefore, the  question of  wage parity with BHEL did  not survive any longer. It was also contended that the strike  of the  workmen was unjustified and illegal and, therefore, the workmen were not entitled to any wages during the strike  period. The  further contention on behalf of the managements was  that even  after the strike had been called off,  the   workers  had   resorted  to   various  acts   of intimidations go-slow, beating up of the willing workers who had attended  factory  during  the  strike  period  and  the workmen  also   resorted  to  other  forms  of  indiscipline including destroying  of company  property thereby making it impossible to  run the  factory under  normal conditions. In substance the  strike conditions  were continued from inside the  factory   which  culminated  in  very  serious  violent activities which  led to  the declaration  of lock-out.  The said lock-out,  it was  submitted, was  justified and  legal and, therefore,  the workers  were not entitled to wages for the period during which the lock-out subsisted.      The Tribunal gave its award on 10.11.1989. While it did not separately  deal with  the issues which had been framed, it considered  the contentions  of  the  rival  parties.  In brief, the  conclusions arrived  at by  the Tribunal were as follows:      (a)  The  scope   of  reference  in      respect of  parity  with  BHEL  was      only with  regard to  minimum  wage      payable to the unskilled workmen of      the lowest  category and, there was      no reference  for revising the pay-      scales during  the operation of the      earlier settlements.      (b)  The  relevant  clause  of  the      settlement  of  1978  had  given  a      right to  the employees  to ask for      parity  with  BHEL  in  respect  of      minimum   wage   for   the   lowest      category and,  therefore, there was      no reason  why there  should not be      any  parity   during   the   period      covered by the settlement of 1978.      (c)  The workmen  were entitled  to      the minimum  wage of Rs. 500/- p.m.      w.e.f. 1.9.1978.      (d)  The settlement dated 15.6.1981      did  not  operate  at  par  to  the      present reference  on the  question      of parity  with  BHEL  because  the      settlement     dated     15.6.1981,      although signed  in the  course  of      conciliation   proceedings    under      Section  12(3)  of  the  Industrial      Disputes  Act,  1947,  was  without      prejudice to the contentions of the      employees to give parity in respect      of  minimum  wage  for  the  lowest      category of BHEL. By the settlement      of  15.6.1981,   only  an   interim      arrangement had been arrived at and      the   payments    were   thereunder      described by the Tribunal as ad-hoc      payments,  could  not  be  adjusted      towards the  minimum  wage  of  Rs.      500/- p.m.      (e)  Although, the strike commenced      by the  employees in  all the  five

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    Bangalore   Based   public   sector      undertakings were  illegal but  the      Tribunal held  that this strike was      justified as the Union of India did      not agree  to  the  demand  of  the      employees with parity in respect of      minimum  wage  of  lowest  category      with BHEL.      (f)  The lock  out declared  by the      managements   of   the   companies,      except in  the case of HMT where no      lock was declared, was justified.      (g)  The employees of the companies      at Bangalore  should be paid 35% of      the wages  for the strike and lock-      out periods.      The aforesaid Award of the Tribunal has been challenged by the  managements of the five undertakings and the unions. The undertakings  filed special  leave  petitions  impugning that part  of the decision of the Tribunal which had awarded a minimum  wage of  Rs. 500/-  p.m. and had also not allowed the adjustment of Rs. 25/- p.m. even though the minimum wage was fixed  at Rs. 530/- p.m. Further more, the challenge was also to  the award of 35% of the wages to the workmen during the strike and lock out periods.      Special Leave  was granted  by this  Court on  2.4.1990 limited to the three questions which were;      1)   Payment of  35% wages  for the      period of strike;      2)   Payment for the period of lock      out; and      3)   set-off  of   Rs.  25/-   p.m.      claimed by  the  management,  which      was disallowed by the Tribunal.      The grievance  of the  workmen, which led to the filing of these appeals by special leave, was on three counts:      i)   That there  had been  inadequate increase of wages      at higher grades;      ii)  The Tribunal  had ordered  discontinuance of C.C.A      with  regard  to  the  employees  of  Indian  Telephone      Industry;      iii) 100%  wages for  strike and lock-cut period should      have been awarded.      It was  contended by  Mr. Narayan  B.  Shetye,  learned counsel on  behalf of  the managements,  that  the  Tribunal having come  to the  conclusion that the strike was illegal, could not  have awarded  any wages  in respect of the strike period. Similarly,  as the  Tribunal had  held that the lock out was justified, it then could not have awarded 35% of the wages for  this period  to the workmen. Mr. Jitendra Sharma, learned counsel  for respondents, however contended that the strike was  not illegal and in any event, as the said strike had been  called off,  no lock out could have been declared. In the  alternative, it was submitted that for the period of lock out, which should have been declared to be illegal, the workmen were entitled to full wages.      On the  basis of  the evidence which was led before the Tribunal it  held, as  already noted,  that the lock-out was justified because  the demand of the workmen, which had been raised in  terms of  the settlement  of 1978.  had not  been agreed to  by the  Government. The strike was, however, held to  be  illegal  because  I.T.I.,  H.A.L.  and  H.M.T.  were declared to  be public  utility services  and no  notice  as contemplated by  Section 22(a)  of the  Act had  been given. After taking  note of the fact that conciliation proceedings

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between the  managments and  the workmen  were going on when the strike commenced, the Tribunal concluded as follows;      "The strike  in the  public utility      services and  in other undertakings      was   illegal    because   it   was      commenced during  the  pendency  of      the conciliation proceedings before      the   Conciliation    Officer.   As      mentioned above,  at about the same      time when  the strike  notices were      given conciliation  proceedings  in      respect  of   the  demands  of  the      workmen were  commenced and had not      come to  an end when the strike was      actually commenced  on  26.12.1980.      Admittedly,  by   that   time   the      conciliation officer  had not  made      any failure  report. The  strike in      the public  utility  services  viz.      ITI, HAL and HMT Hyderabad was thus      in contravention  of clause  (d) of      sub-section  (1)   of  Section  22,      while  the   strike  in  the  other      undertakings    contravened    sub-      section (a)  of Section  23 of  the      Industrial  Disputes   Act,   1947.      There  is  also  substance  in  the      contention urged  on behalf  of the      managements  that  the  strike  was      illegal  also  because  it  was  in      contravenetion of  sub-section  (c)      of Section  23. The  strike was not      only   for    breach    and    non-      implementation  of   some  of   the      clauses in the 1978 settlements but      it  was   in  respect  of  all  the      demands made  by the workmen by the      notice hated  12.3.1980 and some of      these demands  were in  respect  of      matters   covered   by   the   1978      settlements which were in force".      Mr. Jitendra  Sharma, learned  counsel for the workmen, has not  been able to persuade us to hold that the aforesaid conclusion  arrived  at  by  the  Tribuanl  with  regard  to illegality of  the strike  is in  any way  incorrect. It  is quite obvious  from the facts on record that the workmen had resorted to  illegal strike. Without going into the question as to  whether the  strike was  justified or  not, and  even assuming that  the Tribunal  was  right  in  coming  to  the conclusion that  the workmen  were  justified  in  going  on strike, the  question as  to whether  the workmen  would  be entitled to  get any  wages during  the  period  of  illegal strike is no longer res integra.      A Constitution  Bench of  this Court  in Syndicate Bank Vs. K.  Umesh Nayak,  (1994) 5  SCC 572  has held  that  the workmen would  be entitled to wages for the strike period if the strike  was both legal and justified. In other words, if the strike was only legal and not justified or if the strike was illegal  and justified, the workers were not entitled to wages for  the strike  period. It was observed that "Whether the  strike   was  legal   or  illegal   and  justified   or unjustified, were  issues which fell for decision within the exclusive domain of the industrial adjudicator under the Act and it  was not  primarily for  the High  Court to  give its findings on  the said  issues. The  said issues  had  to  be

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decided by taking the necessary evidence on the subject".      In view  of the  aforesaid decision and inasmuch as the strike in  the present  case in all the five undertakings at Bangalore has  been held  to be illegal, therefore, no wages for the  strike period  could have been awarded in favour of the workers.      As regards lock out is concerned, even if it is assumed that here  was non-compliance with the provisions of Section 22 of  the Act  at the  time when the lock out was declared, the conclusion  of the  Tribunal that  the lock  out, in the instant case,  was legal  is not  incorrect. From  the facts which have  been stated  hereinabove, and  as found  by  the Tribunal, it  is clear  that the provisions of Section 24(3) of the  Act are  attracted to  the present case. The workmen had gone  on illegal  strike and  even when  the strike  was officially   called  off,  they  continued  to  disrupt  the working of  the factories  while being  within  the  factory premises. The Tribunal held that:      "The  managements  have  placed  on      record   sufficient   evidence   to      substantiate their contentions that      even though the strike was formally      withdrawn and  the workmen reported      for  duty,  the  workmen  continued      their  agitational  disruptive  and      violent activities  from within and      thus  in   fact   continued   their      illegal strike".      In view  of this,  the Tribunal  rightly held  that the declaration of  lock out  must, therefore,  be  regarded  as being in  consequence of  illegal strike and, therefore, the lock out  would not  be deemed  to be  illegal even  if  the provisions of  Section 22  of the Act were not complied with by the  managements. This being so and applying the ratio of the Constitution  Bench decision  in SYNDICATE BANK (Supra), the workmen would not be entitled to any wages in respect of the period  of lock  out. The  award of the Tribuanl to this extent is, therefore, liable to be set-aside.      It was submitted by Mr. Shetye that the Tribunal having increased the minimum wage to Rs. 500/- it ought not to have directed that  the payment  of Rs. 25/- p.m. may not be set- off. It  was contended  that by  increasing the wages to Rs. 500/- p.m.  and also allowing the workmen to retain Rs. 25/- p.m. w.e.f.  1.9.1978, the effect would be that the wages of these workmen  would be  note than  the wages  of the lowest rank of  workmen in  BHEL. As this contention relates to the construction and effect of the settlement dated 9.6.1981, it would be  appropriate, at  this stage,  to also consider the contention of  Mr. Sharma  on behalf  of the  workmen to the effect that  the Tribunal  ought to  have revised the lowest scale and  bring it  at par  with BHEL’s  scale of  pay  and thereafter, it  should have  revised the  higher  scales  as well. This  submission was  based on  the premise  that  the settlement of  1978 allowed  the workmen to ask for revision of pay  scale consequent on a settlement taking place in the case of  any other  public sector  undertaking such as BHEL. When the  settlement in  BHEL had  taken place  in  January, 1980, the  workmen of  these five public sector undertakings were entitled to contend and demand that their pay-structure should be  revised so  as to  bring them  at  par  with  the revised scales  of pay  which were  in existence in BHEL and that the  settlement dated 9.6.1981 was without prejudice to this right and could not preclude the workers from demanding the said parity.      In the  case of  HMT and  ITI, the  clause relating  to

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revision of  pay was  the one  which was incorporated in the settlement dated  25.5.1978. Term  No. 1  in  the  agreement dated 25.5.1978 does not postulate revision of pay scales in the event  of higher  wages being  paid to  the employees of BHEL or  employees of  any other  public sector undertaking. This clause gives to union only a right to take up the issue regarding the  minimum wages  and  enhancement  of  rate  of neutralisation of  dearness allowance with the Government of India if  the Government  agreed to  the improvement  in the minimum wages or the dearness allowance neutralisation rate. At best  this clause only gives a right to the union to make a reference  to the  Government of  India  for  revision  of minimum  wages  but  does  not  give  any  vested  right  of enhancement of  wages or  pay scales  in the  event of their being a  revision in any other public sector undertaking. In the case  of three  other public sector undertakings namely; BEL BEML  and HAL an additional clause in the settlement was inserted .  In BAL  the clause  was 1.1. In BEML, the clause was as follows:      "If  any   comparable   engineering      industry  in   the  Central  Public      Sector such  as BHEL  etc., revises      the minimum pay and D.A. as well as      the D.A. neutralisation rate beyond      what   is   agreed   to   in   this      settlement,  the   issues  will  be      negotiated     bilaterally      and      consequential  adjustment  made  in      the wage  structure".      In the  case of HAL, the clause was      as follows:      "If a higher minimum wage or higher      rate of  neutralisation of  CPI  is      agreed   to   in   any   comparable      engineering industry  such as  BHEL      in the  Central Public  Sector, the      management  agrees  to  review  the      corresponding  provisions  in  this      settlement  and   make   consequent      adjustment in the wage structure in      consultation with the Union".      The cause  in BEML  contemplated bilateral negotiations in case of revision taking place in the minimum pay of BHEL. In  clause  1.1  of  BEL,  the  management  agreed  to  make necessary modifications  in consultation  with the union and in the  case of  HAL the  management agreed  to  review  the provisions of  the settlement  consequent on  a higher  rate being paid  in BHEL.  The latter  three settlements no doubt make a  reference to  a revision  of pay  scales in  case of revision of  pay in  BHEL but no such reference is contained in the  settlements of HMT and ITI. The unions of these five public sector  undertakings were taking a joint action. They raised the  demand for  the  revision  of  wages  after  the settlement of BHEL had arrived at in June, 1980. The demands were raised  by the  joint action front on 12.9.1980 and the same were in the following terms:      "1.  The  existing  scales  of  pay      should be  restructured  by  adding      Rs. 30/-  at the minimum and at all      stages in each case.      2.   The irreducible  minimum  D.A.      for Bangalore as on 1.9.1978 should      be revised  to Rs. 130/- as against      Rs. 125/-.      3.   For  the  existing  employees,

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    basic pay  should be refixed in the      following manner:      (a)  Add Rs. 30/-      (b)  Add one increment.      (c)  Add one more increment in lieu      of  next  higher  stage  (to  avoid      anomalies)  and   to  provide   for      consequential adjustment benefits.      4.   City  Compensatory   Allowance      should be  paid at  the rate  of 6%      (in all places).      5.   The Fitment  Benefit which  is      not  extended   to  the   employees      joining after the date of agreement      should be extended to them.      6.   The arrears  on account of the      above should  be  worked  and  paid      with effect from 1.1.1979".      The settlement  of 9.6.1981 specifically dealt with the claim of  the revision of scale demanded by the workers. The demand was  for a  revision at  the rate  of Rs.  30/-  p.m. w.e.f. 1.9.1978.  In view  of this,  in the settlement dated 9.6.1981  it   was  agreed   between  the  workmen  and  the managements that  all the  workers on  the pay  rolls of the companies as  on 9.6.1781  would be  paid a  lump sum of Rs. 700/-. This  clause contained  a benefit which was more than what the  unions were  asking for.  The demand of the unions was for  payment at  the rate  of Rs.  30/- w.e.f.  1.1.1979 which would have meant that the employees who had worked for a longer  period would  have got  more than  those  who  had joined the  service later.  Clause (ii)  of  the  settlement dated 9.6.1981  gave a  lump sum payment of Rs. 700/- to all the employees  irrespective of the length of the service who were  on   the  rolls  of  the  Companies  as  on  9.6.1981. Calculated at  the rate  of Rs.  25/- p.m.,  this sum of Rs. 700/- would  amount to  payment in respect of 28 months i.e. w.e.f. 1.9.1978  to 31.12.1980.  From 1.1.1981,  the workmen were given  an ad-hoc  allowance of Rs. 25/- p.m. It is thus evident that  the claim  which was  raised by  the unions in their letter  of demand dated 12.9.1980 relating to revision of pay  scale stood concluded by the settlement of 9.6.1981. The demand  of the  union was more or less conceded inasmuch as Rs.  25/- p.m.  were agreed  to be  paid w.e.f.  1.1.1981 instead of an addtional Rs. 30/- p.m..      It was  submitted by  Shri Sharma that the terms of the settlement dated  9.6.1981 specifically  mentioned that this was "without  prejudice to  the contentions of either party" an expression  which is  used in  the preamble  of the  said settlement. This  settlement dated  9.6.1981 in  our opinion has to  be read  as a  whole. It  has  to  be  read  in  the background of  the demand  which was raised by the unions in their letter  dated 12.9.1980.  The main claim of additional amount of  Rs. 30  P.M. at  the minimum and at all stages in each case,  as demanded by the workmen clearly stood settled with a lump sum payment of Rs. 700/- and ad-hoc allowance of Rs. 25/  w.e.f. 1.1.1981  as agreed  to in the settlement of 9.6.1981.  The  use  of  words  "without  prejudice  to  the contentions of  either party"  can refer  to only such other points or aspects which were not specifically covered by the terms of settlement which were arrived at on 9.6.1981.      The settlement  of 1978  was with regard to pay scales, allowance and  other monetary  benefits. The  settlement  of 9.6.1981 brought  about a  change whereby  a sum of Rs. 95/- was given w.e.f. 1.1.1981 in addition to lump sum payment of Rs. 700/-.  Clause (iv)  of the  settlement  dated  9.6.1981

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stated in  no uncertain  terms  that  all  other  conditions relating to  pay allowances and other monetary benefits were to "continue for the extended period of the settlement" i.e. up to  31.12.1982. This would clearly show that the original settlement of  1973 with  regard to  pay-scales as  well  as allowances and other monetary benefits were to continue upto 31.12.1982 subject  to the  increase of  Rs. 25/-  p.m. plus lump sum  payment of  Rs. 700/-. This settlement of 9.6.1981 was arrived  at during  the  conciliation  proceedings  and, therefore, was  binding on  the parties  under Section 18(3) read with  Section 19(2)  of the Act. The term of settlement dated 9.6.1981  did not  contemplate that the payment of Rs. 25/- p.m.  w.e.f. 1.1.198  as liable  to be  adjusted in any manner. It  is no  doubt  true  that  the  Tribunal  by  the impugned award  has increased  the minimum,  wage to  Rs. 50 p.m. because  the Tribunal  came to  the conclusion that the settlement dated  9.6.1981 did not preclude the workmen from asking for  a revision in the minimum wage consequent on the minimum  wage  consequent  on  the  settlement  having  been arrived at  in the  case of  BHEL. This  conclusion  of  the Tribunal, in our opinion, was incorrect but as leave had not been granted  to the  management on this point, the decision of the  Tribunal reviewing  the minimum  wage at  the lowest rank of  Rs.500/- p.m. as contemplated by the settlement, is payable to  all the  workers in  different scales of pay and the settlement  does not  contemplate the  said amount being adjusted in  any manner. This being so the contention of Mr. Shetye for adjustment of this amount cannot be accepted.      The last  question which  remains for  consideration is with regard to city compensatory allowance to the workmen of I.T.I.. It  is not  in dispute  that prior  to the  impugned award, C.C.A.  @4% was  being paid to the workmen of I.T.I.. By the  impugned award  the Tribunal  increased the  minimum wage to  Rs. 500/-  p.m, in  respect of BEL, BEML, H.A.L and H.M.T.. The  break up  of this  amount was  basic pay of Rs. 335/- +  irreducible D.A.  of Rs-  129.90 + variable D.A. of Rs. 35.10,  It was  stated in  the Award  that in respect of these four  companies, the  variable D.A.  shall be  at  the local consumer  price index  prevailing as  on 1.19.1978  at different units,  with quarterly  adjustments at the rate or 1.39 per  point or  rise or fall in the local indices. It is not disputed  that in  the  existing  wage  structure,  city compensatory allowance  was not being paid to the workmen of above-mentioned four  companies because  the local  consumer price index  used to  be higher  than the All India Consumer Price Index.  In  view  of  this  difference  in  the  price indices, C.C.A.  was being  paid to  the employees of I.T.I. whose rise  and fall in dearness allowance was controlled by the All  India Consumer  Price  Index.  The  Tribunal  while directing that  city compensatory allowance will not be paid to the  I.T.I. employees  because it  is  not  paid  to  the employees of  other public sector undertakings at Bangalore, overlooked the  fact that the local consumer price index was admittedly always  higher  than  All  India  Consumer  Price Index. It  is for  this reason  that the  city  compensatory allowance was  being paid  to the  employees of  I.T.I.  Mr. Shetye frankly  conceded that if city compensatory allowance is not paid to the employees of I.T.I. then over a period of time, the  salary of workmen of I.T.I. would be less than be salary  of  the  workmen  of  other  companies  because  the variable dearness  allowance of  employees of B.E.L, B.E.M.L and H.M.T.  will increase at a higher rate than the variable dearness allowance  of I.T.I. employees which is linked with the rise  or fall  in All India Consumer Price Index. In our opinion, therefore, the direction of the Tribunal dispensing

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with the  payment of  city compensatory  allowance to I.T.I. employees was uncalled for.      From the  aforesaid discussion,  we conclude  that  the workmen would  not be  entitled to  receive any wages during the period  of illegal  strike and  lock out; the payment of Rs. 25/-  as a  result of  settlement dated  9.6.1981 is not adjustable and  the direction  of the  Tribunal not to allow demand of  city compensatory  allowance to  the  workmen  of I.T.I. was  not correct. The Award of the Tribunal directing payment of  35% of  the wages  during the  period of illegal strike and  lock out  and the  decision with  regard to non- payment  of   city  compensatory   allowance  to  I.T.I.  is accordingly,  modified  to  that  extent.  The  appeals  are disposed of  in the  aforesaid terms.  Parties to bear their own costs.