http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 9  

PETITIONER: HYDRO (ENGINEERS) PVT.  LTD.

       Vs.

RESPONDENT: THE WORKMEN

DATE OF JUDGMENT: 30/04/1968

BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. SIKRI, S.M. BHARGAVA, VISHISHTHA

CITATION:  1969 AIR  182            1969 SCR  (1) 156  CITATOR INFO :  RF         1969 SC 360  (34)  R          1969 SC 976  (8)  E          1970 SC 919  (36)  R          1972 SC2215  (2)  RF         1974 SC 526  (13)  E&R        1977 SC 941  (19)  RF         1981 SC1685  (2)

ACT: Industrial  Dispute-Minimum Wage-Principle for fixation  of- Revision  of scale of wages fixed by the previous  award  by linking up with cost of living index-If double advantage  to workmen-Retrospective operation of award-Whether  valid-What is reasonable qualifying period for gratuity.

HEADNOTE: There  were industrial disputes between the.  appellant  and its workmen, the respondents, which were the  subject-matter of  awards.   The  last of such awards  fixed  revised  wage scales  taking into consideration the cost of  living  index then prevailing.  It also provided for annual increments but rejected  the workmen’s demand to link up -the  wage  scales with the index of cost of living.  After the respondents had received two annual increments under that award, they served a notice on the appellant calling ,for revision of the scale of  wages  and  of the gratuity  scheme.   The  dispute  was referred to the Industrial Tribunal and the Tribunal  passed an  award.   The  award retained the scales  fixed  in,  the previous  award and treating them as- based on the  cost  of living index prevailing on the date ,of that award, directed that  the wages should be linked up with the cost of  living index.  The award also directed that effect should be  given to it retrospectively from approximately the date of  demand by  the  respondents.   As regards  gratuity,  the  Tribunal reduced  the  existing qualifying period ,of 10 years  to  8 years  in cases where a workman died, resigned  or  retired; and  deleted completely the existing qualifying period of  4 years  in  case  \where the services  of  the  workman  were terminated by the appellant. In  appeal  to this Court, it was contended that :  (1)  The award  ’as regards wages should be set aside,  because,  (a)

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 9  

the  Tribunal took a wrong view as to what would  constitute minimum wages, (b) it ignored the financial capacity of  the appellant,  (c) the linking up of the wage scales  with  the cost  of living index was wrong, (d) the Tribunal failed  to take   into  consideration  the  principle  of   region-cum- Industry,  (e)  the respondents would get  double  advantage during  the same period, namely, increments and a  raise  in the wage scales, and (f) retrospective operation should  not have  been given to the award; and (2) The changes  made  in the gratuity scheme were illegal. HELD  : (1) There was no reason to interfere with  the  mini wage rate fixed by the Tribunal. [163 A-B] (a)  The  policy  of  the Minimum Wages Act,  1948,  was  to prevent employment of sweated labour in the general interest and so the minimum wages must ensure not merely the physical needs  of  the worker but must ensure, in  addition  to  his sustenance  and that of his family, the preservation of  his efficiency  as ’a workman by providing for some  measure  of education,  medical  requirements  and  amenities.   In  the present case, (i) the Tribunal retained the scales fixed  by the  previous award and only provided for automatic rise  or fall  therein with the corresponding change in the index  of cost  of  living  and (ii) the Tribunal  observed  that  the appellant  had to pay the minimum wages irrespective of  its ability to 157 bear  the additional burden . Therefore, what  the  Tribunal fixed  was  consolidated minimum wages and not  fair  wages. [161 G-H; 162 B-F] (b) In prescribing such a minimum wage rate the capacity  of the  employer need not be considered as the,  State  assumes that  every  employer must pay the minimum wages  before  he employs labour. [162 D-E] Bijay  Cotton Mills Ltd. v. State of Ajmer, [1955] 1  S.C.R. 752, Express Newspapers (Pvt.) Ltd. v. Union of India [1959] S.C.R.  12 and Unichovi v. State of Kerala, [1962] 1  S.C.R. 946, followed. (c)  The  idea of fixing minimum wages in the light  of  the cost  of  living  at a particular juncture of  time  and  of neutralising   the  prevailing  high  prices  of   essential commodities  by linking up scales of minimum wages with  the cost of living index is not alien to the concept of  minimum wages.  It could not be contended that the Tribunal erred in linking  up the wage scales with the living  cost,  because, had  it  not been done, the wage scales  would  have  become unrealistic, as the cost of living index had gone very  much higher  up  since the Tribunal give its last award  and  was threatening to go up further. [161 D-F; 162 H; 163 A-B] (d)  The  capacity  of  the employer  and  the  wage  scales prevailing  in  comparable  industries in  the  region,  are relevant  factors  while, fixing fair wages,  but  not  when fixing minimum wages. [162 F-H] Novex  Dry  Cleaners  v. Workmen, [1962] 1  L.L.J.  271  and Airlines Hotel v. Workmen, [1964] 1 L.L.J. 415, explained. (e)  What  the present award directs is to pay  the  workmen from  approximately  the  date of demand,  the  wage  scales calculated  in  accordance  with the rise in  the  index  of living cost which had taken place since the last award.  The increments  earned were on the footing of the  index  figure taken  into consideration while passing the previous  award. Therefore,  there is no question of the workmen getting  any double advantage. [163 C-D] (f) It was within the Tribunal’s discretion to decide,  from which date its award should come into operation.  Therefore, when no ground was made out to show that the discretion  was

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 9  

unreasonably   exercised,   the  mere  fact  that   it   has retrospectively  enforced its award from about the ,date  of demand by the workmen, is not a ground for interference with the award.. [163 E-F, H] Hindustan  Times  v.  Their Workmen, [1964]  1  S.C.R.  234, Jhagrakhand  Collieries  (Pvt)  Ltd.  v.  C.G.I.T.  Dhanbad, [1960] 2 L.L.J. 71 and United Collieries v. Workmen,  [1961] 2 L.L.J. 75 referred to. (2)  (a) Since the justification for gratuity is a long  and meritorious  .service,  -schemes of gratuity framed  by  the Tribunal  and approved by .this Court have  always  provided some  qualifying period.  Though there is no hard  and  fast rule,  the  general  trend as seen from  a  long  series  of decisions  is in favour of 10 years of  qualifying  service. The Tribunal was therefore, not right in reducing the period from  10  years to 8 years without and  substantial  reason. [164 C-D, F-G] Indian  Oxygen  and Acetylene Co. Ltd.  Employees  Union  v. Indian Oxygen and Acetylene Co. [1956] 1 L.L.J. 435, Express Newspapers  (P)  Ltd. v. Union of India, [1959]  S.C.R.  12. Garment Cleaning Works v.  Its Workmen, [1961] 1 L.L.J. 513, British Paints v. Workmen, [1966] 2 S.C.R. 523 and  Calcutta Insurance Co. v. Their Workmen, [1967] 2 L.L.J. 1,  referred to. 158 (b)  Also,  as regards the deletion of the 4  years  minimum qualifying period when the appellant terminates a  workman’s service,  the Tribunal had no legitimate grounds for  making the alteration in the existing scheme. [164 H]

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1934  of 1967. Appeal  by special leave from the Award dated September  15, 1967  of  the Industrial Tribunal,  Maharashtra,  Bombay  in reference (IT) No. 54 of 1967. I. N. Shroff, for the appellant. Narayan  B. Shetya and K. Rajendra Chaudhury, for  the  res- pondents. The Judgment of the Court was delivered by Shelat,  J.-The appellant company is a private limited  com- pany  of which the authorised capital is Rs. 1 lac  and  the subs,  cribed  capital  Rs.  50,000.   Its  business  is  to manufacture milk cans.  According to the Company, it has not been  able to maintain, much less, increase, its  production owing  to the control orders restricting the import  of  raw materials  required  for  its  manufacturing  process.   The Company was started in 1942 but except for a few years  when it made some profits, it has had to suffer losses during the rest  of  the years, the total loss suffered up  to  1964-65 being  Rs. 1,66,912.  The Company is a small unit having  on its roll 53 workmen. In  1958,  a  reference was made under s.  10(1)(d)  of  the Industrial Disputes Act, 1947 in respect of the demands made by  its  employees  for increase in the  wage  scales.   The reference   ended  in  a  settlement  dated  May  27,   1959 whereunder  a slight increase in the wage scales  was  made. It  also  provided for an ad hoc increase in  the  wages  of those  getting Rs. 2.44 or more per day.  The revised  wages were  to  come into force retrospectively  from  October  1, 1958.   In  1961,  another reference  was  made  which  also resulted in a settlement dated September 11, Under that settlement, the workmen were classified into four

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 9  

categories  and  consolidated wage scales for  each  of  the categories with a provision for increments were agreed upon. Since  these were consolidated wage scales, the  demand  for dearness  allowance was not pressed.  An award was  made  in terms of the said settlement with retrospective effect  from April  1,  1961.   In 1964, the Union  once  again  demanded revision  of wage scales.  The dispute was referred  to  the Industrial Tribunal which made what has been referred to  as the   Bilgrami  award.   The  Tribunal  retained  the   same categories and the only modification it made was to increase the wage scales previously fixed, taking into  consideration the rise in the index of cost of living in the meantime 159 from  450 to 538.  The said award fixed the wage  scales  as follows      Unskilled         -Rs. 4.15-0.10-Rs.5.15.      Semi Skilled      -Rs. 4.75-0.15-Rs.6.25.      Skilled II        -Rs. 5.50-0.25-Rs.8.00.      Skilled I         -Rs. 6.50-0.30-Rs.9.50.      Apprentices       -Rs. 3.25-3.75-Rs.4.25. The award provided that the increments in the revised scales were to be annual and were to start from April 1, 1965.  The award was made effective from November 9, 1964 which was the date  of  the reference.  It however, rejected  the  Union’s demand  to  up  the wage scales with the index  of  cost  of living.   By  April  1, 1967,  therefore,  the  workmen  had received  two annual increments and consequently  the  wages paid to the first four categories were Rs. 4.35, 5.05,  6.00 and  7.10 per day respectively.  It is thus clear  that  the Bilgrami award took the scales previously fixed as its basis when  the  cost of living index stood at 450  and  increased them taking into consideration the fact that the said figure had  gone up by about 94, that is, by raising it by  1  n.p. for every point. On June 17, 1967, the Union served a notice of demand  which called for (a) revised scale of wages with effect from  July 1, 1966; (b) for certain adjustments; (c) for linking up the scales  with the cost of living index; (d) revision  in  the existing  gratuity  scheme; and (e) for bonus for  the  year 1964-65.  We are not concerned in this appeal with the  last demand as the impugned award does not deal with that demand. The demand for revision of wage scales was based on the fact that  the  Bilgrami award had fixed the wage scales  on  the footing  of  the cost of living index being then  538  while that  figure had shot up since then to 675 and that  if  the rise  were to be neutralised as it was done by the  Bilgrami award, the scale of unskilled workmen would come to Rs. 5.30 per  day.  So far as the gratuity scheme was concerned,  the demand  required that the qualifying period for the  retrial gratuity  should be reduced from ten to eight years and  the qualifying  period in case of termination of service by  the employer should be done away with.  The Company resisted the demand  and the conciliation proceeding having  failed,  the State Government referred the dispute to the Tribunal. The  Tribunal  took note while considering  the  demand  for revision  of scales and their linking up with the  index  of cost  of  living  of the fact (a) that  the  Bilgrami  award itself had sought to neutralise the rise in the living  cost by raising the scales in proportion to the rise in the  cost of  living by then; and (b) that though that award was  made in 1964, the wage scales thereunder 160 fixed had already become unreal in the sense that the  index had gone up to 675 by the time the Union filed its statement of claim, that is, March 25, 1967 and had reached the figure

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 9  

of  710  in  July 1967 when the award was  made.   In  these circumstances, the Tribunal thought that the- Union had made out  a case for revision, that it was necessary to make  the wage  scales  realistic and therefore to link them  up  with cost of living index though the Bilgrami award had  declined to  do so.  What the Tribunal did, therefore, was to  retain the  scales fixed by Mr. Bilgrami and treating them  on  the basis of 538 index of living cost, directed that they should be  linked  up  with  the index so  that  the  scales  would automatically  go up as the index rose or fell.   The  award also directed that effect should be given to it as from July 1, 1966, the notice of demand having been served on June 17, 1966.  The gratuity scheme framed in 1961 provided that  ten days’  wages  for every year of service should  be  paid  as gratuity  in  case  of  death,  retirement  or  resignation, provided  the workmen had put in the minimum period  of  ten years  of service.  For the workmen whose services would  be terminated  by the employer the qualifying period  was  four years  of service.  The Tribunal revised the scheme  in  two particulars;  (a)  it reduced the period from ten  to  eight years  in  case where the workmen has’ died or  resigned  or retired;  and (b) it deleted the qualifying period  of  four years  altogether where his service has been  terminated  by the   employer.   The  Tribunal  considered  the   financial position  of  the Company and came to  the  conclusion  that though  it had been making losses, it was of a  fairly  long standing, that the losses incurred in the past years were  a temporary  phase,  that the Company’s future was  not  bleak and,  though  not  prosperous,  it  was  in  a  satisfactory financial  position.  This appeal by special leave  disputes the correctness of the award made by the Tribunal. Counsel  for the Company objected to the aforesaid  observa- tion regarding the Company’s financial position and  pointed out  that  its  position  cannot  at  all  be  said  to   be satisfactory  in view of the fact that, barring only  a  few years,  it  had  made  substantial  losses  all  throughout. Taking  a  cue  from this fact, he contended  that  (1)  the reason  which  impelled the Bilgrami Tribunal to  refuse  to link up the wage scales with the cost of living index  still held  good;  (2) the Tribunal took a wrong view as  to  what would  constitute  a  minimum  wage;  (3)  it  ignored   the financial  capacity  of the Company; (4) it failed  to  take into consideration the principle of region-cum-industry; and (5)  there was no justification in reducing  the  qualifying period for the retiral benefit of gratuity from ten to eight years and for deleting the qualifying period in the case  of termination of service by the employer.  We propose to  deal with  contentions 1 to 4 first and consider  separately  the changes  made  by  the Tribunal  in  the  existing  gratuity scheme. 161 The  Minimum Wages Act, XI of 1948 does not define  ’minimum wages’  presumably because it would not be possible  to  lay down  a uniform minimum wage for all  industries  throughout the  country on account of different and varying  conditions prevailing  from industry to industry and from one  part  of the  country to another.  The legislature also  throught  it inexpedient  to  apply the Act to all industries at  a  time and,  therefore, it applied the Act to  certain  employments only  specified  in the Schedule thereto leaving it  to  the appropriate government to add by notification to that effect industries  in  the said Schedule at suitable times  and  in appropriate  conditions.  But s. 4 of the Act provides  that *.he  minimum rates of wages may consist of a basic rate  of wages and a special allowance at a rate to be adjusted or  a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 9  

basic  rate  of  wages with or without the  cost  of  living allowance  and  cash  value of  concessions  in  respect  of supplies of essential commodities at concession rates  where so  authorised  or an all inclusive rate  allowing  for  the basic rate, the cost of living allowance and the cash  value of the concessions if any.  Sub-section (2) of s. 4 provides that  the  cost  of living allowance and the  value  of  the concessions in respect of supplies of essential  commodities at  concession  rates  shall be computed  by  the  competent authority  at  such intervals and in  accordance  with  such directions as may be specified or given by, the  appropriate government.   It is thus clear that the concept  of  minimum wage  does  take  in the factor of the  prevailing  cost  of essential  commodities whenever such minimum wage is  to  be fixed.  The idea of fixing such wage in the light of cost of living at a particular juncture of time and of  neutralising the  rising  prices of essential commodities by  linking  up scales  of  minimum  wages with the  cost  of  living  index cannot,  therefore, be said to be alien to the concept of  a minimum  wage.  Furthermore, in the light of  spiralling  of prices  in  recent  years, if the wage  scales  are  to  be, realistic,  it  may become necessary to fix them  so  as  to neutralise  at  least  partly the price  rise  in  essential commodities.   Indeed, when the Bilgrami award  revised  the wage scales, it took, as aforesaid, into account the rise in the  cost  of  living index and  neutralised  that  rise  by approximately raising them by 1 n.p. for every point in  the rise  though  it declined to .join up the  scales  with  the index of cost of living. What  the  present  award does is to fix  the  minimum  wage scales  and not to fix fair wages.  That is clear  from  the fact  that it retains the scales fixed by the earlier  award and  taking them on the basis of the index figure at 538  it provides  for  automatic  rise  or  fall  therein  with  the corresponding   change   in  the  index  of   living   cost. Presumably  the  Tribunal  thought it  necessary  to  do  so because  by  the time it came to make the award,  the  index figure had already gone up to 710.  If the Tribunal were  to refuse  to  link  up the scales with the index  of  cost  of living.  the neutralisation it sought to do would  again  go out of gear making 162 Once again the scales unreal and reduce them even below  the floor-level.   That  the  Tribunal  fixed  the  consolidated minimum wages and not fair wages is clear from the facts (1) that  it  retained the scales fixed by  the  previous  award which  had  increased  them  from Rs 3.20  per  day  for  an unskilled  workman to Rs. 4.15 per day as by that  time  the index  had  gone  up  from  450  to  538;  and  (2)  by  its observation  that the Company has to pay the  minimum  wages irrespective of its ability to bear the additional burden. The  fact that an employer might find it difficult to  carry on  his  business  on  the basis  of  minimum  wages  is  an irrelevant  consideration is now a  well-settled  principle: (cf.  Bijay Cotton Mills Ltd. v. State of Ajmer(1), Unichovi v. State of Kerala(2) and Express Newspapers (Pvt.) Ltd.  v. Union  of  India(3).   While  considering  the   distinction between  minimum  and fair wages this Court in the  case  of Unichovi  v. State of Kerala(2) Observed at P.967  that  the Policy  of  the  Minimum  Wages Act,  1948  was  to  Prevent employment of sweated labour in the general interest and  so in prescribing the minimum wage rates, the capacity the  em- ployer  need  not be considered as the  State  assumes  that every  employer must pay the minimum wage before he  employs labour.   It  also observed that the Act  contemplates  that

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 9  

minimum wage rates must ensure not merely the mere  physical need  of  the  worker  which  would  keep  him  just   above starvation but must ensure for him not only his  subsistence and that of his family but also preserve his efficiency as a workman.   It should, therefore, provide as the  Fair  Wages Committee  appointed  by  the  Government  recommended,  not merely  for  the bare subsistence of his life  but  for  the preservation  of  the worker and so must  provide  for  some measure  of education, medical requirements  and  amenities. This   concept  of  the  Committee  has  been  accepted   by industrial  adjudication  in the country and  was  expressly approved of in Express Newspaper (Pvt.) Limited(3).  Counsel for  the Company however, cited before us the  decisions  in Airlines  Hotel  v. Workmen(4)  and Novex  Dry  Cleaners  v. Workmen(5)  where  the  question of capacity  and  the  wage scales  prevailing in comparable in dustries in  the  region were considered relevant factors.  But those were not  cases where  minimum wage rates were fixed but were Cases of  fair wages where those two factors had to be taken into  account. The  Company’s contention that the Tribunal failed  to  take into  consideration the financial capacity, the fact of  the Company  having  made  losses during  the  past  years,  its difficulties in importing raw materials and had also  failed to apply the region-cum-industry principle and therefore the award  was vitiated, has -no merit.  We cannot  also  accept the contention that the Tribu- (1)  [1955] 1 S.C.R. 752 (3)  [1959] S.C.R. 12. (5)  [1962] 1 L.L.J. 271. (2)  [1962] 1 S.C.R. 946. (4)  [1964] 1 L.L.J. 415. 163 nal erred in linking up the wage scales with the living cost be  cause had it not been done, the wage scales  would  have again  gone  unreal once the index had gone up  as  it  then threatened to do. We find, therefore, no reason to interfere with the minimum. wage rates fixed by the Tribunal. A subsidiary contention raised by the Company that by reason of  the  Bilgrami  award  having  provided  for  incremental scales, the workmen under the present award will get  double advantage,  namely,  increment  and the raise  in  the  wage scales  during the same period, has also no substance.   The incremental  scale was fixed in that award on the  basis  of the  index  figure  being,  538.   Those  scales  have  been retained.   The two increments that the workmen have  earned in 1965 and 1966 were on the footing of those scales  which, as aforesaid, were fixed on the basis of the index figure of 538.   What the present award directs is to pay the  workmen as  from  July  1,  1967  the  wage  scales  calculated   in accordance  with the rise in the index of living cost  which had taken place since the last award.  The increments earned having been on the footing of the index figure of 538, there is no question of the workmen getting a double advantage. The next objection to the award was that the Tribunal  erred in  giving effect to the award retrospectively as from  July 1, 1966, that is, approximately from the date of the  demand and  that  if at all it wanted to  give  such  retrospective effect,  the utmost that it could do was to enforce it  from the  date  of the reference.  In  some  cases  retrospective effect,  no  doubt,  has been given from  the  date  of  the reference.   But  it  is  a matter  of  discretion  for  the Tribunal to decide from the circumstances of each case  from which date its award should come into operation.  No general rule  can be laid down as to the date from which a  Tribunal should  bring its award in force : (see Hindusthan Times  v.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 9  

Their  Workmen(3).  Presumably, the Tribunal gave effect  to its award from July 1966 as by that time the cost of  living index had already gone up considerably and not to have  done so  would  have been to deprive the workmen of  the  minimum wages   ’commensurate  with  that  rise.    In   Jhagrakhand Collieries (Private) Ltd. v. C.G.I.T. Dhanbad(2) and  United Collieries v. Workmen(3) the awards were made operative from the  respective  dates of demands ’and this  Court  did  not interfere  with  those awards on the ground that  there  was thereby  any  breach of any recognised  principle.   If  the Tribunal  has  exercised its discretion and  no  substantial ground  is  made  out  to  show  that  it  was  unreasonably exercised,  the  mere  fact  that  it  was   retrospectively enforced  its award from the date of the demand is hardly  a ground for interference with the award. (1)  [1964] 1 S.C.R. 234.   (2) [1960] 2 L.L.J. 71. (3)  [1961] 2 L.L.J. 75. 164 We  now  turn  to the changes made by the  Tribunal  in  the existing  gratuity scheme framed by the  Savarkar  Tribunal. In our view, there is force in the Company’s contention that the,  changes,  namely, reduction of the  qualifying  period from  ten  to  eight years in the  case  of  termination  of service by death, retirement or resignation and deletion  of the  qualifying  period  of  four  years  in  the  case   of termination of service by the, employer, were not justified. The Tribunal in fact has not given any specific reason which necessitated the two changes. It  is now well settled that gratuity is a reward for  good, efficient  and  faithful  service  rendered  for  a   fairly substantial  period and that it is not paid to the  employee gratuitously or merely as a matter of boon but for long  and meritorious  service;  (cf.  Garment Cleaning Works  v.  Its Workmen(1)  and  Express Newspapers  (Private)  Limited.  v. Union of India(2).  Since the justification for gratuity  is a  long and meritorious service, schemes of gratuity  framed by  the tribunals and approved of by this Court have  always provided  some  qualifying  period.  In  Indian  Oxygen  and 3Acetylene  Company Ltd.  Employees Union v.  Indian  Oxygen and  Acetylene Company(3) and Express Newspapers  (Private)- Ltd.  v.  Union  of  India (2)  the  qualifying  period  for gratuity  on  termination  of  service  by  resignation   or retirement was fixed at 15 years.  In Garment Cleaning Works v. Its Workmen(1), though the Company objected to the period of  ten years and contended on the analogy of the  aforesaid two  decisions that it should be fifteen years,  this  Court gave  its  approval to the period of ten years  in  case  of retirement  or resignation.  On the other hand,  in  British Paints  v. Workmen (4) the period of five years provided  by the  award was changed into ten years on the ground  that  a fairly  long minimum period for qualifying for  gratuity  in the  case  of  resignation or retirement  was  necessary  to prevent the workmen leaving one concern after another  after putting  in  the short minimum service  for  qualifying  for gratuity.   Similarly, modification from five to  ten  years was  made  in a recent decision of this  Court  in  Calcutta Insurance Co. Ltd., v. Their Workmen(5).  Though no hard and fast rule can be laid down and each case must be decided  on its own circumstances, the general trend as seen from a long series of decisions is in favour of ten years of  qualifying service.   The  Tribunal in the absence of  any  substantial reason,  was, therefore,- not right in reducing  the  period from  ten to eight years.  As regards the deletion  of  four years minimum period in cases where the employer  terminates the  service also we do not find any legitimate  ground  for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 9  

the alteration of the scheme.  It was, however, said that if such  a period is provided for in a scheme, it was  possible that an em- (1)  [1961] 1 L.L.J. 513.       (2) [1959] S.C.R. 12. (3)  [1956] 1 L.L.J. 435.       (4) [1966] 2 S.C.R. 523. (5)  [1967] 2 L.L.J. 1. 165 ployer would terminate the services of a workmen even though the,  employee wants to render continuous service to  enable him  to  cam  the gratuity.  This does not appear  to  be  a legitimate  apprehension  for unless the employer  is  in  a position  to establish misconduct justifying termination  of service under a standing order, he cannot put an end- to the service  only  to deprive the workman of gratuity.   On  the other hand, there is the danger that whereas in the case  of retirement  or resignation the workman would have to put  in ten  years of service, if no minimum period is provided  for in  the  case  of termination by the employer  it  would  be possible  for  a workmen to commit some misconduct  and  cam gratuity within a shorter time than the one who after a long period  of  meritorious service retires or  resigns.   Since doing away with the qualifying period is likely to result in such  an  anomaly, it is necessary to have  some  qualifying minimum period.  As the period of four years provided in the scheme is not under challenge before us, there is no  reason to  interfere  with it.  We, therefore, set  aside  the  two changes  made by the Tribunal in the gratuity  scheme.   The scheme  for  gratuity  will, therefore remain  the  same  as framed by the Savarkar award. In the result, except for the aforesaid modifications in the award,  we find no reason to interfere with the award.   The appeal,  except  to  the  extent  aforesaid,  fails  and  is dismissed.  There will be no order as to costs. V.P.S.               Appeal partly allowed. 166