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CASE NO.: Appeal (civil)  5601 of 2001

PETITIONER: Mukand Ltd.                                                      

RESPONDENT: Mukand Staff & Officers Association                                 

DATE OF JUDGMENT: 10/03/2004

BENCH: Y. K. Sabharwal & Dr. AR. Lakshmanan  

JUDGMENT: J U D G M E N T WITH CIVIL APPEAL NOS. 7340-7341 OF 2001

Dr. AR. Lakshmanan, J.

       The present case raises an important issue of vital public importance, namely,  whether the Industrial Tribunal was justified in adjudicating upon the service conditions  of employees, who are not "workmen" under the Industrial Disputes Act, 1947 and are  hence clearly outside its jurisdiction.  

Civil Appeal No. 5601 of 2001 was filed by the appellant-Company against the  common final judgment and order of the Division Bench of the High Court of Judicature  at Bombay in Appeal No. 194 of 2000.  The said appeal was filed by the Company  against the judgment dated 01.12.1999 of the learned single Judge in Writ Petition  No.1705 of 1998 which was filed by the Company against the award of the Industrial  Tribunal in Reference being Reference (IT) No. 3 of 1993 which arose out of the  demands of the respondent-Union.

Civil Appeal Nos. 7340 and 7341 of 2001 were filed by the Union against the  judgment and order in Appeal No. 441 of 2000 which was filed by the Union impugning  the judgment dated 01.12.1999 of the learned single Judge in Writ Petition No. 1705 of  1998 by which the single Judge had reduced the extent of dearness allowance granted  under the award of the Industrial Tribunal.   

We shall take Civil Appeal No. 5601 of 2001 filed by the Company against the  judgment and order of the Division Bench for consideration and the decision taken on  this appeal will also govern the other two appeals filed by the Staff and Officers’  Association in Civil Appeal Nos. 7340 and 7341 of 2001.

The appellant-Company concluded a Settlement with the respondent- Association on 14.08.1974 whereby welfare scheme for the staff and officers, jointly  funded and managed by the Company and the Association did not create any condition  of service.  The Company concluded a settlement on 09.06.1982 covering service  conditions of all staff and officers including those in Grades 01 and 00.  According to the  Management, this was a unique settlement in that at the instance the Chairman and  Managing Director of the Company, the Association determined for itself and  recommended the quantum of increase in emoluments for the staff and officers which  the Company accepted and implemented through the said settlement.  On 24.02.1989,  the appellant-Company concluded a Settlement with the respondent-Association which  stated, inter alia, that "It is the Company’s contention that a substantial number of the  staff, not being ’workmen’ under Section 2(s) of the Industrial Disputes Act, 1947  (hereinafter referred to as ’the Act’) are not covered by the provisions of the Act.   Without prejudice to the rights and contentions of both the parties with regard to the  applicability of the provisions of the Act, the parties have reached a comprehensive  Settlement covering in addition to the demands made in the said ’Charter of Demands’,  the issue of annual bonus as well, under Section 12(3) and 18(3) of the Act read with  Rule 62 of the Industrial Disputes (Bombay) Rules, 1957 in conciliation proceedings on  the following terms".

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"This Settlement did not cover employees in Grade 01 and 00 who are  General Foremen or Senior Officers and Asstt. General Foremen or  Officers".

On 04.11.1991, the respondent-Association served a Charter of Demands on  the Company.  Failure report was submitted by Conciliation Officer on 31.10.1992.  The  Government of Maharashtra, by its Order dated 17.02.1993, referred the dispute for  adjudication to the Industrial Tribunal.  The text of the Order issued by the Government  of Maharashtra is reproduced below: "ORDER Industrial Disputes Act, 1947:-

No. ADM 3092/21867/CR 2001/Lab-3. - Whereas the Government  of Maharashtra has considered the report submitted by the conciliation  Officer under sub-section (4) of section 12 of the Industrial Disputes Act,  1947 (XIV of 1947), in respect of the dispute between M/s. Mukand Ltd.,  L.B.S. Marg, Kurla, Bombay 400 070 and the workmen employed under  them, over the demands mentioned in the schedule appended hereto.

And whereas the Government of Maharashtra after considering the  aforesaid report is satisfied that there is a case for reference to the dispute  to an Industrial Tribunal.

Now, therefore, in exercise of the powers conferred by clause (d) of  sub-section (1) of section 10 read with sub-section (5) of section 12 of the  Industrial Disputes Act, 1947, the Government of Maharashtra hereby refers  the said dispute for adjudication to an Industrial Tribunal, Bombay consisting  of Shri G.S. Baj, Member constituted under Government Notification,  Industries, Energy and Labour Department, No. IDA 0392/CR 69/Lab-3,  dated the 31st March, 1992."

The respondent-Association filed its Statement of Claims.  The appellant-  Company filed its written statement setting out in detail how the demands raised by the  respondent-Association, which according to them, were unreasonable and pointing out  that the financial position of the Company was not sound.  It was also pointed out that  barring a few categories of employees, the bulk of employees were not ’workmen’ as  defined under the Act and that the Industrial Tribunal had no jurisdiction to grant any  relief to the employees who are not ’workmen’ under the Act.

The Tribunal, by its Part-I Award, directed an ad hoc payment of Rs.500/- per  month to all employees in grades 12-00.  The appellant-Company on its own effected  an additional ad hoc payment in varying amounts grade-wise to employees in grades  00-09.  The Tribunal, by its interim Award Part-II, directed payment of employees on the  basis of basic pay slab ad hoc amount ranging from Rs. 375/- to Rs.1050/- per month to  employees who had not been granted additional ad hoc payment by the appellant-  Company.  The High Court, by its judgment and order dated 27.01.1996 in Writ Petition  No. 342 of 1996 filed by the company against the said Awards, directed the Company  to deposit the amounts payable under the interim Award Part-II in the Provident Fund  Accounts of the concerned employees instead of disbursing the same to them, and  directed the Tribunal to dispose of the Reference on or before 30.04.1996.

On 11.12.1995, the appellant-Company and the respondent-Association  concluded a Settlement on annual bonus for four years, without prejudice to their  respective rights and contentions as stated in Clause 1 of the said settlement which  stated as under: "It is the Company’s contention that a majority of the staff, on the one hand  and the officers on the other are not ’Workmen’ under Section 2(s) of the  Industrial Disputes Act, 1947 and are also not covered by the provisions of  The Payment of Bonus Act, 1965.  These contentions of the Company are  not, however, accepted by the Association.  In the circumstances, it is  agreed that this Settlement shall not be cited by either party as evidence of  waiver of the contentions of the other and that both the parties shall  continue to be at liberty to raise their respective contentions on these issues  on all fora."

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An affidavit by the Vice-President of the Company - Mr. Krishnan Nair was also  filed before the Tribunal affirming the designations and categories of employees of the  appellant-Company who are not "workmen" under the Act.  The Tribunal passed an  award on 26.03.1998 and held that the appellant was purportedly estopped from  contending that the employees were not workmen under the Act and granted all the  major demands, including revision in basic salaries, dearness allowance, etc. in toto  and rejected certain demands like computer allowance, shift allowance also in toto.   According to the appellant, the Award was far in excess of the appellant’s financial  capacity and the same ignored the well-settled industry-cum-region principle and the  status of the employees before him.

 Being aggrieved by the Award of the Industrial Tribunal, the appellant filed Writ  Petition No. 1705 of 1998 before the High Court at Bombay.  The High Court issued  rule and granted conditional stay subject to the condition, inter alia, that the petitioner-   Company pays to the employees 50% of the increased salary and allowances awarded  by the Tribunal, in addition to the existing salary and allowances with effect from the  date of publication of the Award, and that in case it is held ultimately that the said  employees were not entitled to the payments so made, the amount shall be adjusted by  the appellant in future wages.   

Learned single Judge passed another Order on the same date in the Company’s  Writ Petition No. 1704 of 1998 against another Award passed by another Tribunal in  Reference (IT) No. 70 of 1998 relating to the Company’s daily-rated workmen at its  factory at Kurla while admitting the said writ petition, directing the Company to pay to  the said daily-rated workmen 50% of the increase in the allowances granted by the said  Award except certain allowances specified therein.  The appellant filed an appeal  before the Division Bench against the said interim order dated 05.10.1998.  The appeal  was disposed of stating that the said order was a discretionary order and did not  warrant any interference at the interim stage.  The Association filed contempt petition in  the High Court on the ground that the Company was deducting from retrial benefits of  the employees the amount that were paid to them under the interim order dated  05.10.1998.  By its order dated 19.02.2000 in the said petition, the Company was  directed to deposit in the High Court a sum of Rs. 9,52,205/- recovered thus from the  employees.

The Vice President of the Company filed an affidavit before the learned single  Judge on 24.06.1999 whereby he placed on record the facts on the financial position of  the Company.  The affidavit affirmed, inter alia, the fact that CRISIL progressively  down-graded the Company’s financial standing and that by its letter dated 01.04.1999,  the said credit rating agency further down-graded the Company’s rating from "BBB_" to  "BB" and further that the said down-graded followed the down-grading done earlier as  under:- Year            Year            Year            Year            Year Rating          Rating          Rating          Rating          Rating 1995 AA 1996 AA-        1997 A+ 1998 BBB+       1999 BB The said letter from CRISIL showed that the rating "AA" indicated "high safety",  while "BB" indicated "Inadequate Safety".  The rating as above showed that the  Company had been down-graded by as many as 9 notches between 1995 and 1999.

On 01.12.1999, the learned single Judge passed judgment and order modifying  the impugned Award and held that there was community of interest between the  workmen and non-workmen as they worked and functioned in the same grades and that  the Company had concluded Settlements covering both categories of employees in the  past, and further that in the facts of the case, the workmen could espouse the cause of  the non-workmen.  The learned single Judge disallowed the granting of one component  of D.A. viz., basic linked variable D.A.  He confirmed all other increases in emoluments  granted by the Tribunal.  The Review Petition filed by the Association against the  judgment of the learned single Judge was also rejected by Order dated 15.02.2000.   Both the appellant and the respondent preferred separate appeals challenging the  judgment of the learned single Judge.  In the appeal, the Company filed its Annual  Report for the year 1999-2000 which reported a profit of Rs. 5.85 crores but showed  that when capital profits i.e. profits from sale of land and of shares owned by the  Company in other companies are excluded, there was, in fact, a loss amounting to Rs.  9.45 crores.  The Company also submitted statements relating to basic pay etc. to the

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Division Bench during the course of hearing.  According to the appellant-Company, they  suffered a loss of Rs. 40 crores during the financial year 2000-01 as per the audited  financial results and a chart showing the financial position of the Company from 1991- 92 to 2000-01 was also filed.   

The Division Bench passed its judgment partially modifying the learned single  Judge’s Order by reducing (i) one of the 3 components of Dearness Allowance granted  by the Tribunal viz. the D.A. fixed in terms of percentages of basic pay, grade-wise (ii)  the number of service increments; (iii) the gratuity from 21 days to 15 days; and (iv) by  changing the effective date for increase in emoluments from 17.02.1993 to 01.01.1996.   The Division Bench affirmed the decision of the learned single Judge on all other points.   The Order casts as retrospective burden of approximately Rs. 35 crores upto March,  2001 and prospective gross burden of Rs. 7 crores per annum.

As already stated, the special appeals were filed against the common judgment  by the respective parties.  According to counsel for the appellant, the High Court has  failed to correct the jurisdictional error in granting revision of the service conditions of   employees who are admittedly not ’workmen’ under the Act on the ground, inter alia, of  community of interest and also the error in granting revision of service conditions of  employees in breach of established principles of wage adjudication.  This Court granted  leave to appeal to both parties and directed the appellant-Company not to make any  recovery from the employees of the amounts paid on the basis of the interim Awards  passed by the Tribunal or by the High Court.  We have heard Mr. Ashok H. Desai, learned senior counsel appearing for the  appellant-Company and Mr. K.K. Singhvi, learned senior counsel appearing for the  respondent - Staff & Officers’ Association.  Both the learned counsel advanced lengthy  arguments.   In support of their contentions, they invited our attention to the various  documents and records filed before the Industrial Tribunal, before the High Court and  before this Court and also relied on many rulings of this Court.   In assailing the award and of the judgment of the High Court, Shri Ashok H.  Desai, learned senior counsel appearing for the Company, made the following  submissions:- (i)     The Reference is limited to the dispute between the appellant- Company and the ‘workmen’ employed by them. (ii)    The Tribunal, being a creature of the Reference, cannot adjudicate  matters not within the purview of the dispute actually referred to it by  the order of Reference.  (iii)   There are no pleadings by the respondent-Staff & Officers’ Association  regarding ‘community of interest’ or ‘estoppel’. (iv)    The High Court and this Court have the jurisdiction and the power to  interfere with the award of the Tribunal.   (v)     The phrase "any person" in Section 2(k) and Section 18 of the Act  does not include ‘non-workmen’. (vi)    The finding of the Court below that there is ‘community of interest’  between the ‘workmen’ and the ‘non-workmen’ is based on  misconstruing of evidence and disregarding of vital facts. (vii)   The ‘non-workmen’ cannot be given the status and protection  available to the ‘workmen’ under the Act. (viii)  Estimation/computation of the total wage packet, which is a vital task  in wage adjudication, has not been done by any of the Courts below. (ix)    Financial burden of the award passed by the Tribunal is wrongly  assessed by the Tribunal, as observed by the learned single Judge;  however, neither the learned single Judge nor the Division Bench  assessed the burden of their own judgment and order.  The omission  is fatal to the legality of the impugned order. (x)     The industry-cum-region principle has not been followed nor have the  comparisons be made in accordance with the well-settled law. (xi)    Assessment of the appellant-Company’s financial capacity by the  Courts below is riddled with serious errors. (xii)   The subsequent developments relating to the financial position of the  appellant-Company need to be kept in mind. (xiii)  The award, after its infirmities are cured, should be made applicable  only to the ‘workmen’ and not to the ‘non-workmen’. (xiv)   The appellant-Company, however, undertakes to ensure that the total

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wage packets of the ‘non-workmen’, to whom the award further  modified as above will not be applicable, are not lower than the total  wage packets available to the ‘workmen’ under the said award.

The above submissions were sought to be countered on behalf of the  respondent-Staff & Officers’ Association.  Mr. K.K. Singhvi, learned senior counsel  appearing for the Staff & Officers’ Association submitted that essentially there was no  revision  of basic wages from 1972 and only ad-hoc increases had been granted from  time to time of the special pay and allowances.  There was thus an urgent and pressing  need for wage revision.  He made the following submissions:- (i)     It is submitted by the respondent-Staff & Officers’ Association that the  decision of the Tribunal, on a question of fact, which it has jurisdiction to  determine, is not liable to be questioned in proceedings under Article 226  of the Constitution of India unless at the least it is shown to be fully  unsupported by the evidence.  He cited the judgments of this Court in the  following cases: (a)     Ebrahim Aboobakar & Anr. vs. Custodian General of Evacuee  Property, [1952] SCR 696 at 702  (Five Judges)    (b)     Dharangadhara Chemical Works Ltd. vs. State of Saurashtra                        [1957] SCR 152 (Four Judges)               (c)     Syed Yakoob vs. K.S. Radhakrishnan & Ors., [1964]  5 SCR 64   (Five  Judges)   (d)     Parry & Co. Ltd. vs. P.C. Pal & Ors. [1969] 2 SCR 976  (three Judges)  (e)     Ouseph Mathai & Ors. vs. M. Abdul Khadir, (2002) 1 SCC 319  (Two  Judges)     (ii)    This Court while exerecising its power under Article 136 of the  Constitution of India in an appeal from the judgment of the High Court  rendered in exercise of its power under Articles 226 and 227 of the  Constitution of India will exercise the same power which the High Court  could exercise and will not interfere with the finding of fact recorded by a  Tribunal.  The following decisions were cited  in the cases of Parry & Co.  Ltd. vs. P.C. Pal & Ors.  (supra) and   Fuel Injection Ltd. vs. Kamgar  Sabha & Anr., (1978) 1 SCC 156  for this proposition. (ii)    While exercising powers under Article 226 of the Constitution of India, for  issuance of a writ of certiorari or any other writ against an award of  Industrial Tribunal, the High Court will normally not take into  consideration facts arising subsequent to the date of the award.   (iii)   The Industrial Tribunal by its award raised the necessary issues in regard  to the financial soundness of the Company to bear the burden and  recorded the finding in favour of the Staff & Officers’ Association.   (iv)    The Industrial Tribunal also recorded the finding that the charts regarding  the financial position of various comparable companies, which were  prepared on the basis of the information submitted by the witnesses of  the Company, will have to be believed and considered.     (v)     The findings of the Industrial Tribunal were based on the evidence on  record and the High Court ought not to have interfered with those  findings.  It was submitted that the learned single Judge has erred in  interfering with the DA Scheme framed by the Industrial Tribunal and that  the learned single Judge did not compare the total wage packet of  Mukund with the comparable concerns.  The Division Bench had  exceeded its jurisdiction and take into account event subsequent to the  passing of the award and secondly, in confirming the reduction in DA  made by the learned single Judge.  The Industrial Tribunal having  exercised its discretion and having deprived the workmen of the benefit  of the award from 1.1.1992 to 17.2.1993, there was no reason  whatsoever for the High Court to interfere with the discretion of the  Tribunal.  Though the learned single Judge confirmed that finding, but the  Division Bench without any reason whatsoever interfered with the said  discretion and deprived the workmen the benefit of the revision in service  conditions for four years.  The Division Bench completely lost sight of the  fact and effect that the employees who had retired or had ceased to be in  service of the company between 1.1.1992 to 1.1.1996 would not only not  get any benefit under the award but such of them who had retired or had  ceased to be in service after 19.1.1994 will have to refund the benefit  they got under the interim awards granted on 19.1.1994 and 18.9.1995.

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(vi)    The Division Bench also erred in interfering with the Gratuity  Scheme granted by the Industrial Tribunal   and confirmed by the learned  single Judge of the High Court.  Arguing further, the learned senior  counsel would submit that the  Industrial Tribunal took into consideration  the fact that the daily-rated workers of the Company at the Kalwe Plant,  as per agreement dated 15.2.1994, were entitled to Gratuity of 21 days  and, therefore, had granted Gratuity of 21 days’ basic + DA to the staff  concerned in the reference.  The learned single Judge confirmed the said  finding.  However, the Division Bench interfered with the finding on the  ground that the Gratuity Scheme at Kalwe Plant was on the basis of  minimum attendance whereas the award gave a flat rate of Gratuity of 21  days to all the employees.   

(vii)   The Division Bench erred in interfering with the service increments  given by the Industrial Tribunal.  It interfered with the service increments  only on the ground that they thought it appropriate to restructure the  increments. (viii)  The Company should not be allowed to rely on documents which are not  part of the Record.  It is to be noted that the Company has filed an  application for bringing additional documents on record to show that the  financial condition of the Company had deteriorated after passing of the  award.  It was submitted by the learned counsel that subsequent events  are not at all relevant for the purpose of assailing the award, but may be  relevant if and when demands are made either by the workmen or the  Company and when demands are made either by the workmen or the  Company for subsequent period and a Reference in that regard is given  by appropriate Government.  It was, therefore, submitted that the  application for bringing on record the additional documents be rejected.    According to him, there are no operating losses, but the losses are  mainly on account of the interest on borrowing for huge investments  made in associate/subsidiary/group companies and for the expansion of  the steel making capacity by setting up a new project at Hospet.

Learned senior counsel appearing for the respondent-Staff & Officers’  Association made additional submissions on behalf of the workmen.  Regarding the  financial clause contained the Statute, he has made further submissions reiterating the  submissions made earlier. We shall now analyse the submissions made by the learned senior counsel  appearing on either side with reference to the pleadings, documents, records and also  with reference to the judgments cited.

The Reference is limited to the dispute between the Appellant-Company  and the ‘workmen’ employed by them.     We have already referred to the order of Reference dated 17.2.1993 in  paragraph supra.  The dispute referred to by the order of Reference is only in respect of  workmen employed by the appellant-Company.  It is, therefore, clear that the Tribunal,  being a creature of the Reference, cannot adjudicate matters not within the purview of  the dispute actually referred to it by the order of Reference.  In the facts and  circumstance of the present case, the Tribunal could not have adjudicated the issues of  the salaries of the employees who are not workmen under the Act nor could it have  covered such employees by its award.   Even assuming, without admitting, that the  Reference covered the non-workmen, the Tribunal, acting within its jurisdiction under  the Act, could not have adjudicated the dispute insofar as it related to the ‘non- workmen’.        

It was submitted by the learned counsel appearing for the respondent that under  the Act, the dispute can be raised only by the workmen with the employer and that the  workmen, however, can, in appropriate case, espouse the cause of non-workmen  because under the definition of ‘industrial disputes’ under clause (k) of Section 2 of the  said Act, the dispute may not only be related to workmen but to any person including  non-workmen, provided, however, that there is community of interest between the  ‘workmen’ and the ‘non-workmen’.  It was further submitted that apart from the fact that  admittedly there are workmen in all the grades and that the workmen from one grade  look forward to promotion in the next grade comprising workmen as well as non-

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workmen, the provisions of clause (d) of sub-section (3) of Section 18 of the Act make  the award not only binding on the workmen but also on the non-workmen who may be  in employment on the date of the dispute or may have subsequently become employed  in the establishment.    It was further submitted that clause (d) of sub-section (3) of  Section 18 purposely uses both the expressions, namely, ‘workmen’ and ‘persons’ and,  therefore, both the expressions will have to be given their proper meaning.  ‘Workmen’  has been defined under clause (s) of Section 2 of the Act.  The expression ‘person’ has  not been defined and, therefore, that expression will have to be given its normal  meaning.  In this regard, learned counsel invited our attention to clause (42) of Section  3 of the General Clauses Act, 1897 which states that ‘person’ shall include any  Company or Association or body of individuals whether incorporated or not.  This is an  inclusive definition giving extended meaning to the word ‘person’.  He also drew our  attention to the Black Law Dictionary, 4th Edition, on page No.1299, it is stated that the  word ‘person’ in its natural and usual signification includes woman as well as man.   Reliance was placed on the decision of this Court in the case of Workmen of  Dimakuchi Tea Estate vs. The Management of Dimakuchi Tea Estate, (1958) SCR  1156 (three Judges).  While dealing with the definition of  ‘industrial dispute’ contained  in Section 2(k) of the Act, this Court observed   as under:-  "Therefore, when Section 2(k) speaks of the employment or  non-employment or the terms of employment or the conditions of  labour of any person, it can only mean the employment or non- employment or the terms of employment or the conditions of labour of  only those persons in the employment or non-employment or the  terms of employment or with the conditions of labour of whom the  workmen themselves are directly and substantially  interested......................................................" ................................................................................. .......................................................................................... ..............................

" Section 18 of the Act supports the aforesaid observations, in  so far as it makes the award binding not merely on the parties to the  dispute, but where the party is an employer, on his heirs, successors  or assigns and where they party is composed  of workmen, on all  persons employed in the establishment and all persons who  subsequently become employed therein.  If, therefore, the dispute is a  collective dispute, the party raising the dispute must have either a  direct interest in the subject matter of dispute or a substantial interest  therein in the sense that the class to which the aggrieved party  belongs is substantially affected thereby.  It is the community of  interest of the class as a whole - class of employers or class of  workmen - which furnishes the real nexus between the dispute and  the party to the dispute.  We see no insuperable difficulty in the  practical application of this test.  In a case where the party to the  dispute is composed of aggrieved workmen themselves and the  subject matter of dispute relates to them or any of them, they clearly  have a direct interest in the dispute.  Where, however, the party to the  dispute also composed of workmen, espouse the cause of another  person whose employment, or non-employment, etc., may  prejudicially affect their interest, the workmen have a substantial  interest in the subject matter of dispute.  In both such cases, the  dispute is an industrial dispute."                Learned counsel also cited the decision in the case of Anil Kumar  Upadhyaya vs. Sarkar (P.K. & Ors.), 1961 2 LLJ 459 and, in particular,    conclusion No.4 arrived at page 467 which reads as under:   "No.4 :  From the provisions of clause (b), sub-section(3) of  Section 18 of the Act, it is to be implied that the Tribunal has power to  summon parties other than parties to the order or reference, to appear  in the proceedings as parties to the dispute.  This has a reference to  proper and necessary parties, as such parties need not necessarily  belong to the category of employer or workman."      

Reliance placed on conclusion No.4 by the learned counsel appearing for

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the respondent is misplaced.  In our view, conclusion No.4 needs to be read in  the context of the preceding and succeeding conclusions in the said judgment.   The text of conclusion Nos. 1 to 7 is as under: "(1) An industrial dispute under the Act arises between an employer  and his workmen, where the employer (sic) is concerned.

(2) Such a dispute can only be referred for adjudication by an order  made by the appropriate Government under the Act.  There is no  express provision in the Act or the Rules framed thereunder, for  adding in party to the adjudicating proceedings other than parties to  the reference, by the adjudicating Court or Tribunal.

(3) Such a power may be granted by prescribing rules and/or making  the relevant provisions of the Code of Civil Procedure, but so far it has  not been done.  (4)  From the provisions of Clause (b), Sub-section(3) of Section 18 of  the Act, it is to be implied that the Tribunal has power to summon  parties other than parties to the order of Reference, to appear in the  proceedings as parties to the dispute.  This has a reference to proper  and necessary parties, as such parties need not necessarily belong to  the category of employer or workmen.

(5)   The power to be implied from the provisions of clause (b) is to  summon such a party.  The form of summons has not yet been  prescribed, but under sub-section(1) of Section 11, the Tribunal may  issue summons in its own form and follow such proceedings with  regard to it as it may think fit, until rules framed under the Act deal with  such matter.    

(6) The Form D 1 is not an appropriate form of summons for that   purpose.

(7)Clause (b) of sub-section(3) of Section 18 clearly contemplates that  not only there should be such a summon but that the party summoned  should have an opportunity to show that he has been summoned  without proper cause.  Such an opportunity is not given when the party  is added as a party without any notice to him, and is compelled to join  in the whole reference proceedings."

       In the said case, following its conclusions as above, the High Court held  as under:- "That being the law on the subject, it is clear that the order  made by the Tribunal on 24th December, 1959 is not in accordance  with law.  The Tribunal has not issued any summons as contemplated  by clause (b) of sub-section (3) of Section 18 and has not given any  opportunity to the petitioner to contest the service of such a  summons."  

In the present appeal, it is not the contention of the respondent-Staff & Officers’  Association that the Tribunal, after considering the material before it, arrived at a findin g  that the non-workmen are a necessary party to the reference or that it complied with the  requirement of issuing summons to the non-workmen under Section 18 of the Act, in  accordance with law.   

Learned counsel appearing for the respondent cited the judgment of this Court  in the case of Hochtief Gammon vs. Industrial Trinbunal. Orissa, 1964 (2) LLJ 460.    Gajendragadkar P.B., CJ. While speaking for the Bench in considering the implied  power of the Industrial Tribunal to add parties observed as under : "This question has been considered by the Madras High Court  in two reported decisions.  In P.G. Brookes vs. Industrial Tribunal,  Madras and Ors. , 1953 (II) LLJ 1, the Division Bench of the said High  Court has held that Section 18(b) by necessary implications gives  power to the Tribunal to add parties.  It  can add necessary or proper

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party.  He need not be the employer or the employee.  In that  particular case, the party added was the receiver and it was found that  unless the receiver was added as a party to the reference  proceedings, the adjudication itself would become ineffective.  In the  words used by the judgment, the party added was not a rank outsider  or a disinterested spectator, but was a receiver who was vitally  concerned with the proceedings before the Tribunal and whose  presence was necessary to make the ultimate award effective, valid  and enforceable."

In our view, the ratio of the above judgment has not supported the respondent’s  contentions.

After referring to the decision of the Madras High Court in P.G. Brookes vs.  Industrial Tribunal, (supra), in Radhakrishna Mills Ltd., Coimbatore vs. Special  Industrial Tribunal, Madras and Ors. (1954 (1) LLJ 295) and  to the decision of the  Calcutta High Court in Anil Kumar Upadhyaya vs. P.K. Sarkar & Ors. (1961(II) LLJ  459), this Court has gone on to observe in the said judgment as under:  "It would be noticed that in all these decisions, the implied  power of the Tribunal to summon additional parties in the reference  proceedings is confined only to cases where such addition appeared  to be necessary for making the reference complete and the award  effective and enforceable.  Such a power cannot be exercised to  extend the scope of the reference and to bring in matters which are not  the subject matter of the reference and which are not incidental to the  dispute which has been referred."   

In the present case, the non-workmen are not necessary parties.  The reference  is complete, covering as it does "Mukund Ltd. and the workmen employed by them."   The award, in our opinion, can be made effective and enforceable in respect of the  workmen after its infirmities are cured.  It was submitted that in fact settlement of 1989,  for instance, did not cover the employees in Grades 01 and 00 and yet, the same was  implemented by the parties thereto.  The finding of the High Court that the ‘workmen’  and the ‘non-workmen’ belong to the same class, in our view, is erroneous.  The  question of class to which the employees belong is to be decided not on the basis of  the Grades in which they are   placed but on the basis of their duties, responsibilities  and powers as laid down in Section 2(s) of the Act.

In the instant case, the parties have adduced detailed evidence, documentary as  well as oral, on the duties, responsibilities and powers of the employees but the  Tribunal totally side-stepped the said evidence running into more than thousand pages  on the ground that the Company is estopped from raising the issue of the status of the  employees under the Act, i.e. whether they are ‘workmen’ or not.  The Tribunal arrived  at its decision erroneously by ignoring the fact that (a) the Company had not waived its  rights or contentions on the issue in any of the settlements between the parties, (b) the  settlement of 1989 concluded despite all the pre-existing facts including previous  settlements, "without prejudice" to the rights and contentions of the parties on the issue,  as already submitted, and (c) the settlement of 1995 concluded during the pendency of  the Reference before the Tribunal which stated inter alia that "both the parties shall  continue to be at liberty to raise their respective contentions on these issues on all fora.    In fact the appellant-Company had identified the positions in terms of job titles i.e.,  designations of employees who are not ‘workmen’ under the Act by affidavit dated  5.7.1995 of Mr. Krishnan Nair.  The facts affirmed in the said affidavit were proved by  examination of witnesses and were also admitted to be correct by General Secretary  and witness of the Association vide paragraph 95 of his evidence which reads as  under: "Annexure-1 of Ex. C-29 is now shown to me, designation  mentioned therein under respective grades are broadly correct.   Grades are based on the job and responsibilities of the various  categories in the Grade.  In the hierarchy in a typical production shop  are downwards to upwards i.e., daily-rated workmen, supervisors 2 to  7, supervisors, foremen."    

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It was further submitted by the learned counsel for the respondent that award  rendered at the instance of the workmen with regard to the conditions of service of the  workman/employed in Grade 12 to 00 would have surely affected the non-workmen  working in the same factory in the same grades and they would have been required to  be given an opportunity to be heard by the Industrial Tribunal.  There is, therefore, no  doubt that there is community of interest between the workmen who raised the dispute  and the non-workmen working in those grades whose cause the workmen had  espoused.  It is true that the contention on behalf of the workmen all throughout has  been that all the employees concerned in the Reference are workmen under the Act.  In  the alternative, it has been contended that assuming without admitting that some of the  employees are non-workmen, the Association can espouse the cause of the non- workmen and it is on this footing that the High Court has held that the workmen were  entitled to espouse the cause of non-workmen placed in the same Grades.  The above  submission has no force.

In the event, the Tribunal never adverted to the factual material including the  evidence anywhere in its award.  The Tribunal neither considered the factual material  before it nor applied the law thereto.   

We, therefore, hold that the reference is limited to the dispute between the  Company and the Workmen employed by them and that the Tribunal, being the  creature of the Reference, cannot adjudicate matters not within the purview of the  dispute actually referred to it by the order of Reference.

Community of Interest or estoppel According to Mr. Ashok H. Desai, learned senior counsel appearing for the  appellant-Company, there are no pleadings either on the issue of ‘community of  interest’ or on the issue of ‘estoppel’ in the Statement of Claim filed by the respondent- Staff & Officers’ Association before the Tribunal.  The law, on this point, is well-settled  in a catena of cases.  This Court , in its recent  judgment in the case of Bondar Singh  & Ors. vs. Nihal Singh & Ors., (2003) 4 SCC 161 , held as under: "It is settled law that in the absence of a plea no amount of  evidence led in relation thereto can be looked into."

In this view of the matter, we are of the opinion that the findings rendered  regarding ‘community of interest’ or ‘estoppel’ in the absence of pleadings by the  Association, cannot at all be looked into.   

Jurisdiction and power of this Court to interfere with the award of the  Tribunal  Elaborate and lengthy submissions were made by both the learned counsel  appearing on either side and many rulings were cited on this issue.  Mr. Ashok H.  Desai, learned senior counsel appearing for the Company, submitted that the High  Court and this Court have the jurisdiction and power to interfere with the award of the  Tribunal and cited the judgment of this Court in the case of Union of India vs.  Tarachand Gupta & Bros. , 1971(1) SCC 486.    This Court quoted, inter alia, the  following passage from Anisminic Ltd. vs. The Foreign Compensation  Commissioner, Lord Reid at pages 213 and 214, 1969(1) All ER 208:  ".....But there are many cases where, although the tribunal had jurisdiction  to enter on the enquiry, it has done or failed to do something in the course  of the enquiry which is of such a nature that its decision is a nullity.  It may  have given its decision in bad faith.  It may have made a decision which it  had no power to make.  It may have failed in the course of the enquiry to  comply with the requirements of natural justice.  It may in perfect good faith  have misconstrued the provisions giving it power to act so that it failed to  deal with the question remitted to it and decided some question which was  not remitted to it.  It may have refused to take into account something which  it was required to take into account.  I do not intend this list to be  exhaustive.  But if it decides a question remitted to it for decision without  committing any of these errors it is as much entitled to decide that question  wrongly as it is to decide it rightly."

After quoting the above passage, this Court went on to observe in its above- mentioned judgment as under: "To the same effect are also the observations of Lord Pearce at page 233.  

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R. v. Fulham, Hammersmith and Kensington Rent Tribunal is yet  another decision of a tribunal properly embarking on an enquiry, that is,  within its jurisdiction, but at the end of its making an order in excess of its  jurisdiction which was held to be a nullity though it was an order of the kind  which it was entitled to make in a proper case.

"22. The principle thus is that exclusion of the jurisdiction of the Civil  Courts is not to be readily inferred.  Such exclusion, however, is inferred  where the statute gives finality to the order of the tribunal on which it confers  jurisdiction and provides for adequate remedy to do what the courts would  normally do in such a proceeding before it.  Even where a statute gives  finality, such a provision does not exclude cases where the provisions of the  particular statute have not been complied with or the tribunal has not acted  in conformity with the fundamental principles of judicial procedure.  The  word "jurisdiction" has both a narrow and a wider meaning.  In the sense of  the former, it means the authority to embark upon an enquiry; in the sense  of the latter it is used in several aspects, one of such aspects being that the  decision of the tribunal is in non-compliance with the provisions of the Act.   Accordingly, a determination by a tribunal of a question other than the one  which the statute directs it to decide would be a decision not under the  provisions of the Act, and therefore, in excess of its jurisdiction."

This Court in its judgment in the case of Cellular Operators Association of  India & Ors. vs. Union of India & Ors., (2003) 3 SCC 186,  held as under: "......The question, therefore, that remains to be considered is, whether  from the judgment of the Tribunal, the contentions raised by the appellants  can be held to be a substantial question of law, which requires interference  with the order of the Tribunal..."

"But the conclusion of the Tribunal that nothing should be allowed to  stand in the way of pursuing the objective of increasing teledensity in the  country and that the decision being a policy decision, is not liable to be  interfered with by the Tribunal, cannot be sustained inasmuch as the main  grievance of the cellular operators was to the effect that the Tribunal did not  consider several materials placed before it on the question of level playing  field nor has it given any positive finding on that.  ... On this issue,  according to Mr. Chidambaram and Mr. Vaidyanathan, huge materials had  been produced and the Tribunal never applied its mind to those materials,  being swayed away by the question that this being a policy decision, cannot  be interfered with by the Tribunal."   Per contra, Mr. K.K. Singhvi, learned senior counsel appearing for the Staff &  Officers’ Association cited the case of Ebrahim Aboobakar & Anr. vs. Custodian  General of Evacuee Property, (supra) in which this Court observed as under: "It is plain that such a writ cannot be granted to quash the decision of an  inferior court within its jurisdiction on the ground that the decision is wrong.   Indeed, it must be shown before such a writ is issued that the authority  which passed the order acted without jurisdiction or in excess of it or in  violation of the principles of natural justice... But once it is held that the  court has jurisdiction but while exercising it, it made a mistake, the wronged  party can only take the course prescribed by law for setting matters right  inasmuch as a court has jurisdiction to decide rightly as well as wrongly."

Relying on these observations, this Court in the case of Dharangadhara  Chemical Works Ltd. vs. State of Saurashtra (supra) , observed as under: "It is equally well settled that the decision of the Tribunal on a question of  fact which it has jurisdiction to determine is not liable to be questioned in  proceedings under Article 226 of the Constitution unless at the least it is  shown to be fully unsupported by evidence."

In the case of Syed Yakoob vs. K.S. Radhakrishnan & Ors. (supra), the  Constitution Bench of this Court observed as under: "The question about the limits of the jurisdiction of High Courts in  issuing a writ of certiorari under Art. 226, has been frequently considered by  this Court and the true legal position in that behalf is no longer in doubt.  A

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writ of certiorari can be issued for correcting errors of jurisdiction committed  by inferior courts or tribunals; these are cases where orders are passed by  inferior courts or tribunals without jurisdiction, or in excess of it, or as a  result of failure to exercise jurisdictions.  A writ can similarly be issued  where in exercise of jurisdiction conferred on it, the Court or Tribunal acts  illegally or improperly, as for instance, it decides a question without giving  an opportunity to be heard to the party affected by the order, or where the  procedure adopted in dealing with the dispute is opposed to principles of  natural justice.  There is, however, no doubt that the jurisdiction to issue a  writ of certiorari is a supervisory jurisdiction and the Court exercising it is not  entitled to act as an appellate Court.  This limitation necessarily means that  findings of fact reached by the inferior Court or Tribunal as a result of the  appreciation of evidence cannot be reopened or questioned in writ  proceedings.  An error of law which is apparent on the face of the record  can be corrected by a writ, but not an error of fact, however, grave it may  appear to be.  In regard to a finding of fact recorded by the Tribunal, a writ  of certiorari can be issued if it is shown that in recording the said findings,  the Tribunal had erroneously refused to admit admissible and material  evidence, or had erroneously admitted inadmissible evidence which has  influenced the impugned finding.  Similarly, if a finding of fact is based on no  evidence, that would be regarded as an error of law which can be corrected  by a writ of certiorari.  In dealing with this category of cases, however, we  must always bear in mind that a finding of fact recorded by the Tribunal  cannot be challenged in proceedings for a writ of certiorari on the ground  that the relevant and material evidence adduced before the Tribunal was  insufficient or inadequate to sustain the impugned finding.  The adequacy or  sufficiency of evidence led on a point and the inference of fact to be drawn  from the said finding are within the exclusive jurisdiction of the Tribunal, and  the said points cannot be agitated before a writ court.  It is within these limits  that the jurisdiction conferred on the High Courts under Art. 226 to issue a  writ of certiorari can be legitimately exercised (vide Hari Vishnu Kamath v.  Syed Ahmed Ishaque, Nagendra Nath Bora v. The Commissioner of  Hills Division and Appeals, Assam and Kaushalya Devi v. Bachittar  Singh.  

It is, of course, not easy to define or adequately describe what an  error of law apparent on the face of the record means.  What can be  corrected by a writ has to be an error of law; but it must be such an error of  law as can be regarded as one which is apparent on the face of the record.   Where it is manifest or clear that the conclusion of law recorded by an  inferior Court or Tribunal is based on an obvious misinterpretation of the  relevant statutory provision, or sometimes in ignorance of it, or may be,  even in disregard of it, or is expressly founded on reasons which are wrong  in law, the said conclusion can be corrected by a writ of certiorari.  In all  these cases, the impugned conclusion should be so plainly inconsistent with  the relevant statutory provision that no difficulty is experienced by the High  Court in holding that the said error of law is apparent on the face of the  record.  It may also be that in some cases, the impugned error of law may  not be obvious or patent on the face of the record as such and the Court  may need an argument to discover the said error; but there can be no doubt  that what can be corrected by a writ of certiorari is an error of law and the  said error must, on the whole, be of such a character as would satisfy the  test that it is an error of law apparent on the face of the record.  If a statutory  provision is reasonably capable of two constructions and one construction  has been adopted by the inferior Court or Tribunal, its conclusion may not  necessarily or always be open to correction by a writ of certiorari.  In our  opinion, it is neither possible nor desirable to attempt either to define or  describe adequately all cases of errors which can be appropriately,  described as errors of law apparent on the face of the record.  Whether or  not, an impugned error is an error of law and an error of law which is  apparent on the face of the record, must always depend upon the facts and  circumstances of each case and upon the nature and scope of the legal  provision which is alleged to have been misconstrued or contravened."

In the case of Parry & Co. Ltd. vs. P.C. Pal & Ors. (supra) , this Court observed

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as under: "The grounds on which interference by the High Court is available in  such writ petitions have by, now been well established.  In Basappa v.  Nagappa it was observed that a writ of certiorari is generally granted when  a court has acted without or in excess of its jurisdiction.  It is available in  those cases where a tribunal, though competent to enter upon an enquiry,  acts in flagrant disregard of the rules of procedure or violates the principles  of natural justice where no particular procedure is prescribed.  But a mere  wrong decision cannot be corrected by a writ of certiorari as that would be  using it as the cloak of an appeal in disguise but a manifest error apparent  on the face of the proceedings based on a clear ignorance or disregard of  the provisions of law or absence of or excess of jurisdiction, when shown,  can be so corrected.  In Dharangadhara Chemical Works Ltd. v. State of  Saurashtra this Court once again observed that where the Tribunal having  jurisdiction to decide a question comes to a finding of fact, such a finding is  not open to question under Art. 226 unless it could be shown to be wholly  unwarranted by the evidence.  Likewise, in the State of Andhra Pradesh &  Ors. v. S. Sree Ram Rao this Court observed that where the Tribunal has  disabled itself from reaching a fair decision by some considerations  extraneous to the evidence and the merits of the case or where its  conclusion on the very face of it is so wholly arbitrary and capricious that no  reasonable person can ever have arrived at that conclusion interference  under Art. 226 would be justified."

In the case of Ouseph Mathai & Ors. vs. M. Abdul Khadir (supra), this Court  observed as under: "It is not denied that the powers conferred upon the High Court  under Articles 226 and 227 of the Constitution are extraordinary and  discretionary powers as distinguished from ordinary statutory powers.  No  doubt Article 227 confers a right of superintendence over all courts and  tribunals throughout the territories in relation to which it exercises the  jurisdiction but no corresponding right is conferred upon a litigant to invoke  the jurisdiction under the said article as a matter of right.  In fact power  under this article casts a duty upon the High Court to keep the inferior courts  and tribunals within the limits of their authority and that they do not cross the  limits, ensuring the performance of duties by such courts and tribunals in  accordance with law conferring powers within the ambit of the enactments  creating such courts and tribunals.  Only wrong decisions may not be a  ground for the exercise of jurisdiction under this article unless the wrong is  referable to grave dereliction of duty and flagrant abuse of power by the  subordinate courts and tribunals, resulting in grave injustice to any party."  

In support of his contention that this Court while exercising its power under  Article 136 of the Constitution of India in an appeal from the judgment of the High Court  rendered in exercise of its powers under Articles 226 and 227 of the Constitution of  India will exercise the same power which the High Court could exercise and will not  interfere with the finding of facts recorded by a Tribunal, learned counsel cited the  judgment in the case of Parry & Co. Ltd. vs. P.C. Pal & Ors. (supra).  In the said case,  this Court held as under: "Since this is an appeal arising from a writ for certiorari, we also  would not interfere with the conclusions arrived at by the Tribunal except on  grounds on which the High Court could have done."  

In the case of Fuel Injection Ltd. vs. Kamgar Sabha (supra), this Court  observed as under: "..... But the present appeals are from a judgment of the High Court  under Art. 226 and so the jurisdiction of this Court in entertaining an appeal  by special leave under Art 136 must ordinarily be confined to what the High  Court could or would have done under Art. 226."

In our view, the material that was placed before the Tribunal was not considered  or discussed and that there was, as such, no adjudication by the Tribunal.  The whole  award of the Tribunal, in our view, is liable to be set aside on the ground of non- application of mind by the Tribunal to the material on record.  In the first place, the  Tribunal has no jurisdiction to entertain and decide a dispute which covered within its

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fold "persons who are not workmen".  That the material on record before the Tribunal as  regards the comparable concerns was admittedly "sketchy" and incomplete as  observed by the learned single Judge of the High Court and that the award based on  such material could not have been sustained.   

In the instant case, the employer and the employees by their conduct in  concluding settlements in the past could not create for, or confer upon, an adjudicating  authority jurisdiction, where none existed, in respect of employees to whom the  provisions of the Act are not applicable.  This apart, the employer had not waived his  right to raise the issue of the status of the employees under the Act in any of these  settlements.  The employer cannot held to have waived his rights regarding the issue of  the status of the employees under the Act in the absence of any of the settlements  concluded by them with their employees.   The High Court has come to the conclusion  that there are grave and fundamental errors, including the errors in assessing financial  capacity, burden etc. in the award of the Tribunal.  In the instant case, the Tribunal did  not have the jurisdiction to adjudicate the present dispute inasmuch as it pertains to the  conditions of service of non-workmen.  The Division Bench has erred in holding that  there is a community of interest between the workmen and the non-workmen and  holding further that the workmen can raise a dispute regarding the service conditions of  non-workmen.  This reasoning, in the absence of any pleading regarding the  community of interest, is fallacious.

It was not open to the High Court, in exercise of writ jurisdiction, to modify an  award which, at its very basis, was flawed as it lacked proper application of the  fundamentals of wage adjudication.  The Tribunal, in this case, has exceeded its  jurisdiction.  It has embarked upon an enquiry against non-workmen and, therefore, the  decision of the Tribunal is a non-compliance with the provisions of the Act.  Therefore,  the determination by a Tribunal on a question other than the one which Statute directs it  to decide, would be a decision not under the provisions of the Act and, therefore, in  exercise of its jurisdiction is liable to be set aside.  

It is proved by the appellant that the decision of the Tribunal is wrong and  without jurisdiction or in excess of it.  This Court has jurisdiction to render justice to t he  wronged party, namely, the appellant and set aside the same.  It is showed before us  that the decision of the Tribunal is not fully supported by evidence.  We, therefore, hold  that this Court has jurisdiction and power to interfere with the award of the Tribunal. The phrase "any person" in Section 2(k) and Section 18 of the Act does not  include "non-workmen".   Section 2(k) and Section 18 are reproduced hereunder: "(k) "industrial dispute" means any dispute or difference between employers  and employers, or between employers and workmen, or between workmen  and workmen, which is connected with the employment or non-employment  or the terms of employment or with the conditions of labour, of any persons"

18. Persons on whom settlements and awards are binding.- (1) A  settlement arrived at by agreement between the employer and workman  otherwise than in the course of conciliation proceeding shall be binding on  the parties to the agreement.   

(2) Subject to the provisions of sub-section (3), an arbitration award which  has become enforceable shall be binding on the parties to the agreement  who referred the dispute to arbitration.

(3) A settlement arrived at in the course of conciliation proceedings under  this Act or an arbitration award in a case where a notification has been  issued under sub-section (3A) of section 10A or an award of a Labour  Court, Tribunalor National Tribunal which has become enforceable shall be  binding on-

(a)     all parties to the industrial dispute;

(b)     all other parties summoned to appear in the proceedings as parties to

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the dispute, unless the Board, arbitrator Labour Court, Tribunal or  National Tribunal, as the case may be, records the opinion that they  were so summoned without proper cause;

(c)     where a party referred to in clause (a) or clause (b) is an employer, his  heirs, successors or assigns in respect of the establishment to which the  dispute relates;

(d)     where a party referred to in clause (a) or clause (b) is composed of  workmen, all persons who were employed in the establishment or part of  the establishment, as the case may be, to which the dispute relates on  the date of the dispute and all persons who subsequently become  employed in that establishment or part."

According to Mr. Ashok Desai, learned senior counsel, the phrase "any person"  in Section 2(k) and Section 18 of the Act includes a non-workman who was a workman  but retired, resigned or otherwise left the services of the employer during the pendency  of the dispute under reference.  It also includes a person who was not a workman when  the dispute was referred for adjudication but joined the services of the employer as a  workman during the pendency of the proceedings.  In this regard, it may be pointed out  that the contention of the respondent-Association that the phrase "any person"  employed in Section 2(k) and Section 18 covers non-workmen was not accepted in  Narendra Kumar Sen case reported in AIR 1953 Bombay 325, the Dimakuchi Tea  Estate case (supra) reported in (1958) SCR 1156, the Reserve Bank of India case  reported in (1996) 1 SCR 25 and in the Greaves Cotton Company Limited case  reported in (1971) 2 SCC 658.  This Court in those cases has also rejected the  contention regarding ’community of interest’ between workmen and non-workmen.  The  learned single Judge, by misconstruing the meaning of the ratio in the judgments above  cited, arrived at his conclusion vide para 22 of his judgment which read as under: "22. It would, therefore, appear that the consistent view of the  Supreme Court is that the non-workmen as well as workmen can raise  a dispute in respect of matters affecting their employment, service  conditions etc., where they have a community of interest, provided  they are direct and not remote."

The fact is that in each and every case above cited, the contention that  workmen can raise a dispute in respect of the non-workmen was rejected by the Court.   This issue is, therefore, answered in favour of the Company.

The findings of the Court below that there is ’community of interest’ between the  workmen and the non-workmen is based on misconstruing of evidence and  disregarding of vital facts.

In this regard, learned senior counsel for the appellant brought to our notice the  evidence of Mr. Krishnan Nair that the employees are interested in promotions because  of financial benefits, a universal fact, has been misconstrued by the Courts below as  proof of community of interest between the workmen and the non-workmen.  The  evidence of Mr. Krishnan Nair reads as follows:- "57.  It is true that the employees are promoted from the lower grade to  upper grade as the case may be, on merits.  It is true that once a workman  is not always a workman.  On promotion he comes out of that category.  I  agree that wages scales of different grades of M.R.W. are in hierarchy.  But  I deny there being any cooperation.  I cannot say whether the employees in  the lower grade have an interest in the promotional grade because of  financial benefits.  I say that it is not true to say that they are interested.   Now the witness says that the employees will be naturally interested in  promotional post because of the financial benefits and for the reasons  known to them."  

The learned single Judge vide para 22 of his judgment arrived at the conclusion  as under: "The Company’s witness Mr. Nayar has also admitted in his evidence  existence of community of interest between them.  Under the circumstances  the tribunal has rightly come to the conclusion that the respondents have a

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substantial interest in the subject matter of the dispute and there is a  community of interest between the respondents and those whose case they  have espoused."  

After quoting verbatim the relevant part of the evidence of Mr. Krishnan Nair as  above, the counsel for the appellant-Company made the following submissions before  the Division Bench (pages 96-97 Volume-II of the Company’s appeal before this Court).   "It is submitted that the Tribunal has nowhere cited the above statement of  the Appellant Company’s witness in support of its conclusions.  It is  respectfully submitted that the Learned Single Judge grievously erred in re- appraising the evidence of the Company’s witness on this vital issue.  It is  further submitted that the witness had, by his statement quoted above,  stated only that the employees are interested in promotions because of the  financial benefits and that the said statement by the witness, while stating  the obvious which is indeed a universal fact, in no way amounted to  admission of any community of interest between employees in workmen  and non-workmen categories.  It is respectfully submitted, to illustrate the  point, that a Typist may become interest in, and may rightfully aspire form  promotion at some indeterminate point in his future career to the post of  Managing Director but such interest does not establish a community of  interest between Typists and the Managing Director.  It is submitted that no  material whatsoever was placed by the Respondent Association and that no  evidence was on record either before the Tribunal or before the Learned  Single Judge to show community of interest between the two categories of  employees.  The Learned Single Judge erred in picking up an isolated  statement made by the Company’s witness, in total disregard of the central  thrust of the whole body of his evidence and in holding that the Company’s  witness admitted, in his evidence, existence of such community of interest  between the workmen and the non-workmen, wholly misconstruing the  meaning of the evidence on a vital issue which goes to the root of the  dispute and on such misinterpretation, the Learned Single Judge has built  up the ratio of this Judgement on the issue of the status of the employees  under the Act and the jurisdiction of the Tribunal."   

We have perused the Division Bench judgment on this aspect.  The Division  Bench has not even adverted to, much less dealt with, the above submissions while  confirming the learned single Judge’s ruling on this issue.  The Division Bench has also  ignored the cumulative effect of the Settlements of 1989 and 1995 which were  concluded between the parties without prejudice to their respective rights and  contentions on the status of the employees under the Act.         

It is pertinent to refer to the Settlement of 1995 in this context.  Clause 1 of the  Settlement of 1995 concluded during the proceedings in the reference when the issue  was already before the Tribunal, stated:  "Clause 1 of this Settlement reads : "It is the Company’s contention that a  majority of the staff, on the one hand and the officers on the other are not  ’workmen’ under Section 2(s) of The Industrial Disputes Act, 1947 and are  also not covered by the provisions of The Payment of Bonus Act, 1965.   These contentions of the Company are not, however, accepted by the  Association.  In the circumstances, it is agreed that this Settlement shall not  be cited by either party as evidence of waiver of the contentions of the other  and that both the parties shall continue to be at liberty to raise their  respective contentions on these issues on all fora."  

It is thus seen that the High Court has not only disregarded of vital facts but also  misconstrued the evidence of the witness of the Company.  This issue is answered  accordingly in favour of the Management.

The non-workmen cannot be given the status and protection available to the  workmen under the Act.

The above submission of learned counsel for the appellant is well founded under  the Act.  Disputes can be raised only by the workmen with the employer.  The workmen,  however, can in appropriate cases espouse the cause of non-workmen if there is  community of interest between the workmen and the non-workmen.  In the instant case,

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it is an admitted fact that the community of interest or estoppel has never been pleaded  and the findings rendered by the High Court on this issue is in the absence of  pleadings.  If the non-workmen are given the status and protection available to the  workmen, it would men that the entire machinery and procedure of the Act would apply  to the non-workmen with regard to their employment/non-employment, the terms of  employment, the conditions of labour etc.  This would cast on the appellant-Company  the onerous burden of compliance with the provisions of the Act in respect of the non- workmen.  In our view, the situation is not envisaged by the Act which is solely  designed to protect the interests of the workmen as defined in Section 2(s) of the Act.

Estimation/Computation of the total wage packet, which is a vital task in wage  adjudication, has not been done by any of the Courts below.

It is argued that individual items in the wage packets can, and often do, vary  very considerably among comparable concerns.  Hence, estimation/computation of the  total wage packets for different categories of employees and comparison of the total  wage packets among comparable concerns is essential.  As rightly pointed out by  learned counsel for the appellant that none of the Courts below have admitted to  estimate/compute the total wage packets resulting from their awards/judgments for any  of the categories of employees.  This is a fatal omission in the award/judgment.  There  has been no acceptable reply from counsel for the respondent-Association on this  issue. The basic pay and increment structure, found to be higher than in comparable  concerns by the Learned Single Judge, remain unchanged by the Learned Single  Judge himself or by the Division Bench.  Along with the high rate of Dearness  Allowance granted by the Order of the Division Bench, these have cascading effect on  other items or emoluments like House Rent Allowance which is already high at 12.5%  of Basic pay plus DA and Leave Travel Allowance which is fixed at one month’s basic  pay the amounts specified in the Award. The Tribunal had granted in toto the demands relating to scales of basic pay and  increment structure except the demand for the merger of grades 12 and 11 into grade  09.  The result has been a disproportionate increase in the basic pay and annual  increments.  Neither the Learned Single Judge nor the Division Bench attempted to  remedy the situation.  There is no discussion or analysis in support of the decision to  grant the demand in respect of scales of basic pay in toto, as has been done by the  Courts below.   The Learned Single Judge has observed vide paragraph 38 of his judgment,  which is at page 167 of Vol.II of the Company’s Appeal, that "the revised basic wage  and the increment structure is comparatively higher than the comparable concerns" but  has left the situation unchanged.  The Division Bench, too, has left it unremedied.   While doing so, the Courts below totally ignored the cascading effect of the high basic  wage and dearness allowance not only on Provident Fund, Gratuity and  Superannuation but on other items of emoluments viz., one component of DA which is  related to basic pay, House Rent Allowance and Leave Travel Allowance.   Annexure P-7 at pages 132 to 136 of Vol. I of the present Appeal contain  comparative data on Total Wage Packet, Basic plus DA, DA, HRA and LTA in the  Appellant Company under the Order of the Division Bench vis-‘-vis the seven other  companies adopted for comparison.  The data show that the Appellant Company,  despite its poor financial capacity and performance, now ranks among the eight  companies (seven plus the Appellant Company) No.1 in respect of Total Wage Packet,  No.4 in respect of Basic plus DA, No.6 in respect of DA, No.1 in respect of House Rent  Allowance (HRA) and No.1 in respect of Leave Travel Allowance. The rate of variable DA now stands raised from Rs.1.72 to Rs.3.00 for every  change of 5 points in the Consumer Price Index which is disproportionately high but has  been left unchanged by the Division Bench.   The ’CHARTS ON INCREASES IN EMOLUMENTS GRANTED BY THE  COURTS BELOW’ tendered by the Appellant Company as directed by this Court during  the hearing of the present Appeal contain the relevant particulars of the demands in  dispute and the Orders by the Courts below thereon.  The time-tested system and practice of allowances linked to grades has been  changed by the Award and the change, which is drastic, continues under the impugned  Order of the Division Bench. For decades in the pre-Award period, the allowances like House Rent  Allowance, Leave Travel Allowance etc. were higher for the higher grades and there  were thus financial benefits because of promotions when the employees were   

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promoted from the lower to the higher grades and entrusted with higher responsibilities.   Under the Award of the Tribunal, the allowances are linked to basic pay and are de- linked from the grades, a situation that has been left without any modification by the  learned single Judge as well as by the Division Bench.  There is  no application of mind  or any discussion or analysis or any reason adduced in support, of the abovementioned  change in the time-tested system and practice anywhere in the Award/Judgements of  the Courts below.  As a result, financial benefits arising from promotions are rendered  nugatory - in fact,  the Award has virtually abolished the financial benefits on account of  promotions."

The financial burden of the award passed by the Tribunal and the High Court. Lengthy submissions were made by counsel for both sides.  Counsel for the  appellant invited our attention to the observation made by the learned single Judge and  of the Division Bench.  The learned single Judge observed vide para 29 of his judgment  as under: "I may, however, hasten to add that Mr. Rele is right in criticising the tribunal for  not considering the total financial burden which is likely to be borne by the company as  a result of the award passed by the tribunal.  Even according to the association the total  burden on account of the award comes to Rs. 35.30 crores and the net burden for the  year 1999 for the monthly rated employees and daily rated workmen at Kurla would be  around Rs.10 crores.  The tribunal has obviously committed an error in holding that the  yearly burden on account of the award would be within the range of 3.3 crores to 3.7  crores and works out to mere 6 to 7 percent of the total profits of the company.  As a  matter of fact the burden on account of the present award itself works out to about 25%  of the gross profit and this fact will have to be borne in mind while fixing the wage  structure and the concerned employees.  The Learned Single Judge has not however adverted to the above position  anywhere else in his Judgement later.  Further, he has not estimated the burden that  would result from his own judgement.   In paragraph 22 of its Judgement, which is at pages 51-52 of Vol.I of the present  appeal, the Division Bench observed inter alia: "We would be revisiting the question of financial burden at a later stage of the  judgment once again in considering the appropriate relief, if any, that should be granted  in these proceedings." Later in the Judgement however, vide paragraph 28 thereof which is on pages  76 to 78 of Vol.I of the present Appeal, the Division Bench, after reproducing some of  the submissions made by both the parties, observed: "We have duly taken into account the rival submissions and have carefully  considered the figures which have been submitted before us by both the  sides.  The Court will have also necessarily to have regard to the impact of  the financial performance of the Company over a period of time.  This  includes the financial difficulties faced by the Company in 1998-99.  Having  regard to the financial burden under the award of the Tribunal as modified  by us we are of the considered view that the award of the Tribunal as  modified should be made operative not from 17th February, 1993 as directed  by Industrial Tribunal but, with effect from 1st January 1996."

The Division Bench failed to recognise that the relief granted as above is only a  one-time relief and that it does not reduce the prospective burden of the modified  Award.  But for the observation that the rival submissions have been duly taken into  account and carefully considered, there is no discussion or analysis of the submissions  by the parties on the hotly contested issue of the financial burden of the Award vis-‘-vis  the Company’s financial capacity.

It is further submitted that the reference to gross burden and net burden after  taking into account the tax payable by the Company in the Award/Judgement of the  Courts below are not relevant in view of the subsequent developments as the Appellant  Company has not been paying any tax since the year 2000-2001.

The Division Bench, like the Learned Single Judge, has in fact nowhere  estimated the financial burden that would result from its own judgement.  This is an  omission that is fatal to the legality of the Order impugned in the present Appeal.   

The Industry-cum-region principle has not been followed nor have the  comparisons been made in accordance with the well-settled law.

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The Companies adopted for comparison are not comparable in terms of the  nature of the business, sales turnover, employee strength, profits and other relevant  parameters.  The comparisons are also incorrect, as these have been made as  between categories of employees, which are not comparable.   

The Learned Single Judge, vide paragraph  31 of his Judgement which is at  page 159 of Vol.II of the Company’s Appeal, has observed: "The data furnished by the association in respect of the comparable  concerns is also not complete in many respects.  It seems that the data  furnished is mainly in respect of the posts of peons, clerks, telephone  operators, watchmen, supervisors etc. and it seems that the data  concerning the staff and officers working in grade 00 to grade 5 is rather  incomplete and sketchy.  The claim of the workers will have to be examined  keeping in mind these aspects of the matter."

The Learned Single Judge, however, has not adverted to these aspects of the  matter anywhere else in his Judgment later.  The Division Bench, too, has not remedied  the flaw in this aspect in its own Judgement.    

Assessment of the appellant-Company’s financial capacity by the courts below is  riddled with serious errors:

The Tribunal on this issue relied entirely on the data submitted by the  Association in respect of the Company’s financial capacity.  The award dealt with this  topic in two short paragraphs, namely, paras 63 and 64 thereof. "63.  I have perused the Balance Sheets and the charts submitted by the  Union and I am of the opinion that the information tabulated by the Union is  satisfactory and correct and the computation of the gross profits is on well  laid down principles of various adjudicating authorities.  

64. It is the contention of the Union that the financial position of the  Company is very sound.  It is the Company’s contention that the financial  position is not very sound.  It means that the financial condition of the  Company is quite good."

In arriving at its conclusion as above, the Tribunal ignored the serious errors  pointed out by the Company which may be seen on page 159 of Volume-III of the  present appeal in the data submitted by the Association.  The Tribunal considered  average gross profit at Rs. 56.25 crores for the years 1991-92 to 1996-97, as against  Rs. 34.22 crores as computed corrected by the Company.  Learned single Judge vide  para 28 of his judgment stated, inter alia, as under: "...It is true that the company has been registering losses in the last year but  that may be particularly due to the factor of recession which has affected the  industries in general.  If we examine the material on record it is seen that  the company’s business is consistently growing."

Again the learned single Judge vide para 29 of his judgment went on to observe:  "In the light of the material placed before me it is not possible to agree with  Mr. Rele that the company’s financial position is not sound and the company  is doing badly."

The Division Bench adopted, vide para 22 of its judgment, the gross profit for six   years from 1991-92 to 1996-97 at Rs. 250.418 crores and average profit per year at Rs.  41.736 crores based on Krishnan Nair’s affidavit dated 04.06.1999.  In doing so, the  Division Bench ignored the fact that the said data on profits included capital profits i.e.,   profits from sale of the shares in other companies owned by the Appellant Company  and from sale of land etc. which had not accrued from the Company’s normal business  operations.  The Division Bench in fact had before it the data on profits excluding capital  profits, which the Tribunal also had before it, but failed to take these data into account.    The relevant data are available vide Annexure P-4 on page 121 of Vol.I of the present  Appeal.  As may be seen from the said data, the total gross profit for the years from  1991-92 to 1996-97 was only Rs.205.32 crores as computed corrected by the Company

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after excluding capital profits.  The Division Bench also had before it relevant data for  the period upto and including the year 1999-2000.  Despite the declining trends in the  financial performance of the Company as evident from the data, the Division Bench  concluded, inter alia, vide paragraphs 19.8 and 19.9 of its Judgement, which are on  pages 37-39 of Vol.I of the present Appeal, as under: "In the present case, these economic and financial indicators reflective of  the performance and financial health of the employer establish beyond  doubt that this is a company which is financially sound."

The Division Bench further observed: "The figures content in the annual accounts relating to the share capital,  reserves and surplus, fixed asses, investments, networth and profits among  other economic indicators are, in my view sufficient to indicate the financial  health and standing of the Company"

In any event, the Appellant Company became a ’Potentially Sick Industrial  Company’ under Section 23 of the Sick Industrial Companies (Special Provisions) Act,  1985. The fact that the Courts below were in grave error in their conclusions, which  were arrived at by ignoring vital facts and submissions placed before them by the  Appellant Company, is clear from the subsequent developments which are pointed out  briefly.  Subsequent developments relating to the financial position of the appellant-  Company need to be kept in mind.

On this issue also arguments were advanced by both the learned senior counsel  at length.  Mr. Ashok Desai, learned senior counsel, heavily relied on the ratio of the  judgment in the Ahmedabad Millowners Association case reported in (1966) 1 SCR  382, the trends in respect of the change in the Company’s financial capacity and the  subsequent developments relating thereto need to be considered by this Court, keeping  in mind that the Company has to bear the burden of the modified award for several  years to come.  The judgment in the Ahmedabad Mill Owners Association case  observes, inter alia, as under: "The problem of constructing a wage-structure must be tackled on the basis  that such wage-structure should not be changed from time to time.  It is a  long-range plan; and so, in dealing with this problem, the financial position  of the employer must be carefully examined.  What has been the progress  of the industry in question; what are the prospects of the industry in future;  has the industry been making profits; and if yes, what is the extent of profits;  what is the nature of demand which the industry expects to secure; what  would be the extent of the burden and its gradual increase which the  employer may have to face? These and similar considerations have to be  carefully weighed before a proper wage-structure can be reasonably  constructed by industrial adjudication."   

According to Mr. Desai if the Company succeeds in its appeal, it will have to  recover Rs. 18 crores already paid to the employees including both workmen and non- workmen and if it does not, it will have to bear the burden of having to disburse a further  sum of Rs.15.45 crores by way of balance of arrears for the period since 01.01.1996.

Opposing Mr. Singhvi, learned senior counsel for the respondent-Association,  contended that the High Court and this Court while exercising powers under Article 226  and 32 of the Constitution for issuance of any writ against an award of the Industrial  Tribunal will normally not take into consideration facts arising subsequent to the date of  the award.  Arguing further, he would submit that a writ will be issued to set aside an  award of the Industrial Tribunal on the material placed on record before the Tribunal  and under sub-section 3 of Section 19 of the Act, it is, inter alia, provided that an award  shall, subject to the provision of that section remain in operation for a period of one year   from the date on which the award becomes enforceable under Section 17A.  Under  sub-section 6 of Section 19, it is, inter alia, provided that notwithstanding the expiry of  the period of operation under sub-section 3, the award shall continue to be binding on  the parties until a period of two months has elapsed from the date on which notice is  given by any party bound by the award to the other party or parties intimating its  intention to terminate the award.  The above provisions show that an award remains

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binding on the parties firstly for a period of one year from the date of its publication and   secondly until a period of two months has elapsed from the date on which the notice of  termination is given by any party bound by the award, and no demand can be raised  pertaining to that award during that period.  

It was, therefore, submitted by Mr. Singhvi that if a party to an award can raise  fresh dispute subsequent to the award and to take into account events subsequent to  that award it will harm the interest of the workmen and that the superior court exercising  its power will not entertain such a plea.  We are unable to countenance the said  submission.  In the instant case, the total accumulated loss suffered by the appellant- Company as on 31.03.2003 is Rs. 225 crores.  The appellant-Company is now covered  by Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985 and has  become a ’Potentially Sick Industrial Company’ as defined thereunder.  The Company  has suffered a further loss of Rs. 64.22 crores according to the audited results for the  first half of the year 2003-04.  If the estimated loss for the third quarter of 2003-04 is  also taken into account, the net-worth of the Company stands totally eroded.    Opposing this submission Mr. Singhvi submitted subsequent events are not at all  relevant for the purpose of assailing the award, but may be relevant if and when  demands are made either by the workmen or the Company for subsequent period and a  reference in that regard is given by appropriate government.  He, therefore, submitted  that the application for bringing on record the additional documents should be rejected.   Mr Singhvi further submitted that the compilation filed by the Management "financial  position of the appellant-Company" require a lot of explanation and comments for which  evidence will have to be led.  Without prejudice to the above submission, Mr. Singhvi  drew our attention to the auditor’s notes appended to the balance sheet relating to  loans and advances etc. read with item 3 (vi) of the report of the auditor to the  members.  According to him, the balance-sheet clearly shows that there are no  operating losses but the losses are mainly on account of the interest on borrowing for  huge investments made in associate/subsidiary/group companies and for the expansion  of the steel making capacity by setting up a new project at Hospet (where alone about  Rs. 600 crores have been invested) etc. and that borrowings were mainly used for such  investments and for loans and advances to associate, subsidiary and group companies  which have not been recovered.

Concluding his arguments, Mr. Ashok Desai submitted that the award, after its  infirmities are cured, should be made applicable only to the workmen and not to the  non-workmen.  We see merit and substance in the above submission.  We, therefore,  set aside the award and of the judgments of the single Judge and of the Division Bench  of the High Court and hold that the award should apply only to the workmen and that  the workmen should not, in the facts and circumstances of the case, be permitted to  raise demands/disputes on behalf of the non-workmen.  We place on record the  undertaking given by the appellant-Company before us ensuring that the total wage  packets of the non-workmen to whom the award further modified as above will not be  applicable, are not lower than the total wage packets available to the workmen under  the said award.

The appellant-Management has a prima facie case on merits and the balance of  convenience is entirely in their favour.  We also hold that the employer and the  employees by their conduct in concluding settlements in the past cannot create or  confer upon an adjudicating authority jurisdiction where none existed in respect of  employees to whom the provisions of the Act are not applicable.  In the instant case,  the employer had admittedly not waived their right to issue the status of the employees  under the Act in any of the said settlements.  The High Court, both the learned single  Judge and of the Division Bench had stepped into the shoes of the adjudicating  authority and virtually modified/altered the award in vital respects like basic linked  variable D.A., D.A. fixed in forms of percentages of basic pay, service increments,  gratuity and effective dates for increase in emoluments.   

The Industrial Tribunal did not have jurisdiction to adjudicate the present dispute  inasmuch as it pertains to the conditions of service of non-workmen.  The learned single  Judge and the Division Bench of the High Court failed to appreciate that parties cannot  by their conduct create or confer jurisdiction on an adjudicating authority when no such  jurisdiction exists.  We have already noticed that the Division Bench has erred in

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holding that there is community of interest between the workmen and the non-workmen  and holding further that the workmen could raise a dispute regarding the service  conditions of non-workmen.   

The High Court further failed to appreciate that in order to secure revision of their  own grades or other items of emoluments, it was not necessary for employees who are  ’workmen’ under the Act to agitate also for the revision of the emoluments of those who  are not ’workmen’, and that as such the ’workmen’ in the present, have no direct or  substantial interest in the revision of emoluments of employees who are not ’workmen’,  nor could the workmen be held to be vitally interested in the terms of employment of the  non-workmen.  

The High Court also failed to appreciate that ’workmen’ as well as non-workmen  being in the same grade did not imply that the distinction between the two categories  ceased to exist, or that they belonged to the same class.

The Division Bench has further erred in relying on the various settlements  concluded between the parties in the past regarding the service conditions of the  employees including the settlement of 1974 relating to welfare scheme.  Both the  Division Bench and the learned single Judge failed to appreciate that none of the said  settlements contained any provision, or even a whisper thereof, of any waiver by the  appellant-Company of its rights with regard to the status of the employees under the  Act.     During the pendency of the proceedings in this Court, supplementary affidavit  was filed by the Vice President, Finance of the appellant-Company bringing to this  Court’s notice certain crucial events that have occurred subsequent to the admission of  the appeal, which have a vital bearing on the case.  It is stated therein that the  appellant-Company is in dire financial straits.  The Company has already placed on  record financial difficulties which it has been encountering.  The present affidavit was  placed on record with the updated situation as at present.  The Company has suffered a  loss before tax of about Rs. 210 crores in the financial year 2002-03 which was reduced  to Rs. 157 crores after considering waivers and reduction in interest rate aggregating to  Rs. 53 crores on the basis of concessions given by the banks and financial institutions  under a restructuring package.  The loss as stated above follows a loss before tax of  Rs. 111 crores in the previous financial year i.e. year 2001-02 and that the losses as  above are without taking into account the arrears payable to the employees amounting  to Rs. 15.45 crores.  The appellant being suffered a further loss before tax at Rs. 40  crores in the first quarter of the current year i.e. year 2003-04 as per the unaudited  financial results and the accumulated loss is Rs. 269 crores as on 30.06.2003 leaving a  net worth of Rs. 28 crores.   Along with the affidavit annexures were filed for the year  ended 31.03.2003.  According to the learned senior counsel, the Company has now  become a potentially sick industrial Company as defined by The Sick Industrial  Companies (Special Provisions) Act, 1985 since there has been an erosion of more  than 50% in the Company’s peak net worth in the four preceding years on the basis of  the audited financial results for the financial year 2002-03.  The Appellant Company is  required under the provisions of Section 23 of the said Act to report the fact of such  erosion to the Board for Industrial and Financial Reconstruction within sixty days from  the date of finalisation of the duly audited accounts of the Company for the financial  year 2002-03 and also to take further actions specified in the said provisions.  The  appellant-Company is now in the process of submitting the necessary report to the  Board for Industrial and Financial Reconstruction as required under the said Act.  On account of adverse market conditions and unviability of the business, the  appellant-Company was compelled to close down permanently its Machine Tools  Division at Ballabgarh in Haryana with effect from 18.12.2002.   Several other details in regard to the sickness of the company has also been  furnished.  Since we are remitting the matter to the Industrial Tribunal, it is for the  appellant-Company to place the additional materials before the said Tribunal for its  adjudication.  During the pendency of the proceedings before the High Court and of this  Court, certain directions were given in regard to the disbursement of certain amounts.   The amounts already paid will be adjusted towards future payments after fresh  adjudication.                            

In the circumstances of the case, we are of the opinion it is proper to remit the  matter back to the Industrial Tribunal for adjudication according to law since there are  grave and fundamental errors including errors in assessing financial capacity burden

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etc. in the award of the Tribunal.    The Industrial Tribunal is directed to adjudicate the claim of the workmen alone within  six months from the date of receipt of this judgment.          In the result, Civil Appeal No. 5601 of 2001 filed by Mukand Ltd. is allowed and Ci vil  Appeal Nos. 7340-7341 of 2001 filed by Mukand Staff and Officers Association are dismissed.    No costs.                                                                                                                     

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