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PETITIONER: THE WORKMEN OF WESTERN INDIA MATCH CO.  LTD.

       Vs.

RESPONDENT: THE WESTERN INDIA MATCH CO.  LTD.,

DATE OF JUDGMENT: 11/04/1962

BENCH: MUDHOLKAR, J.R. BENCH: MUDHOLKAR, J.R. SARKAR, A.K. SUBBARAO, K.

CITATION:  1966 AIR  976            1963 SCR  (2)  27  CITATOR INFO :  RF         1968 SC 585  (8)  RF         1972 SC 343  (10)

ACT: Industrial  Dispute--Scale  of  pay--Condition  of   service --Dearness allowance--Employees of sales office and factory, if  could be equated--Earlier  settlement--Termination  of-- Charter  of  demand,  if  could  be  treated  as  notice  of termination of previous settlement--Industrial Disputes Act, 1947(14 of 1947), s. 19(2).

HEADNOTE: R  the respondent company has got a factory, with an  office attached thereto, in Alambazar a suburb of Calcutta and also has  its  sales office in the commercial area  of  Calcutta. Without  first giving a formal notice under s. 19(2) of  the industrial Disputes Act, terminating an earlier  settlement, the  Union  made fresh demands, contained in  a  charter  of demands,  inter alia for the enhancement of dearness  allow- ance,  alteration  of  the basis of  computing  it  and  the revision  of pay scale alleging that what they get  is  much below  what corresponding employees at the sales office  get and  that  the present rates are inadequate in view  of  the rise in cost of living The dispute relating to dearness  allowance alone was  first referred  to the Tribunal but later the dispute relating  to grades  and  scale  of pay was also  referred  to  the  same Tribunal. The  Tribunal after overruling the preliminary objection  of the company that it had no Jurisdiction to proceed with  the reference  because no notice terminating the  settlement  as contemplated  by s. 19(2) of the Act was given by the  work- men,  found that the employees were not entitled  to  higher dearness  allowance  or to the alteration of  the  basis  of computation of the dearness allowance, but there has been  a change  in the circumstances which justified a  revision  of the scale of pay. Held, (1) that when during the pendency of negotiations  the Union by a letter had asked the company to treat the charter of  demand  as a notice under s. 19(2) of  the  Act  without first  terminating an earlier settlement under an award  and

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the company had agreed to refer the matter in dispute 28 to the adjudication of a tribunal, the question of a  formal notice  under  s. 19(2) of the Act was immaterial,  for  the presentation of the charter of demand followed by the letter amounted to a notice of termination of settlement. (2) that the members of a Union like the one of employees of the  responsible’s  factory  have bank  dealt  with  by  the company on a different footing from the employees of a sales office  in  Calcutta,  the  former  being  employees  of  an engineering concern and the latter of a mercantile one,  who are governed by the recommendation of the Bengal Chamber  of Commerce  and, therefore, the case of the factory  employees cannot  be equated with that of the sales office  employees. The  factory employees cannot, as of right, demand that  the benefit of the rates fixed by the Bengal Chamber of Commerce be  also given to them, because the rates were not  intended to be applied to them. Clerks  of Calcutta Tramways v. Calcutta Tramways  Co.  Ltd. [1956] S.C.R. 722, applied. (3)  that there is no valid reason for compelling  employers to  offer  uniform terms of employment  to  their  employees working   in   different  establishments   because   various considerations  must  enter into the question  such  as  the value of their work to the employer, the employer’s  ability to  pay, the cost of living the availability of persons  for doing the particular kind of work and so on The action of an employers who does not offer uniform condition of service to all its employees doing work which, broadly speaking may  be called  similar, can not be regarded as discriminatory or  a breach of any principle of industrial law. (4)  that  the Industrial Tribunal in refusing to extend  to the employees of the respondent in the factory in  Alambazar benefit  of  dearness  allowance formulated  by  the  Bengal Chamber  of  Commerce has not contravened any  principle  of natural  justice  or any important principle  of  industrial law.    Even  assuming  that  an  Industrial  Tribunal   has exercised  its  discretion wrongly in not  awarding  uniform dearness allowance to all the employees of the same employer working  in different establishments, that is no ground  for interference under Art. 136. State, of Madhya Pradesh v. G. C. Manager [1955] S.C.R.  and Bengal  Chemical  & Pharmaceutical Works Ltd.   Calcutta  V. Their Workmen, [1959] S. C. R. 136, ralied on, 29 (5)  that   an  award  of  an  Industrial  Tribunal   cannot ordinarily be revised unless there is a circumstances ;  but here, there has been a change of circumstances because  cost of  living  has admittedly gone up since then.  This  is  so notorious  a fact that court is entitled to take  notice  of it.   The  object  of  awarding  dearness  allowance  is  to neutralise,  at  least partially, the issue in the  cost  of living  and in the circumstances the factory  employees  are entitled to have the old basis revised. Burn& Co. Ltd. v. Their Workmen, 19561 S.C. R. 781, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION Civil Appeal No. 429 of 1961. Appeal  by special leave from the Award dated September  16, 1958,  of  the Fourth Industrial Tribunal, West  Bengal,  in Cases Nos.  VIII-II of 1958. N.   C. Chatterjee, A. N. Sinha and Dipak Dutta Choudhri for

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the Appellants. C. K. Daphtary, Solicitor-General of India, B. Sen and B. N. Ghosh for the respondent. 1962.  April 11.  The Judgment of the Court was delivered by MUDHOLKAR, J.-This is an appeal by special leave against  an award made by the court of Industrial-Tribunal, West Bengal, Calcutta.  The relevant facts are these : The Western India Match Co., (respondent)  has  got  a factory with  an  office  attached thereto in Alambazar, which is a suburb of Calcutta.  It has also got a sales office at Calcutta which is situate in  the commercial area.  Certain disputes arose between the factory employees and the respondent, pursuant upon the presentation of a charter of demands by them to the respondent on January 25, 1957.  These demands were seven in number.  The  demands included   enhancement   of  the  dearness   allowance   and alteration of the basis of computing it.  They 30 also included a demand for the revision of pay scales.   The respondent   was  unwilling  to  concede  the  demands   and thereupon   the   appellant-union  approached   the   Labour Commissioner,  West  Bengal.  Apparently on  his  suggestion certain conferences were thereafter held between the parties and  the  Conciliation Officer with a view to  arrive  at  a settlement.   During  those  conferences  certain.   counter proposals  were put forward by the respondent but they  were not  accepted  by the union.  Eventually the  Government  of West Bengal by its order dated January 14, 1958 referred the dispute  relating  to the dearness allowance  alone  to  the Fourth  Industrial  Tribunal at Calcutta but not  the  other disputes.  Conciliation proceedings regarding other disputes were  resumed after the aforesaid reference was made and  on May 23, 1958 a settlement was reached between the Union  and the  respondent on all issues excepting the one relating  to grades and scales of pay.  It was agreed that this issue  be referred  for  adjudication to the same tribunal  which  was dealing  with the question of dearness allowance  Upon  this the  Government  of West Bengal referred that issue  to  the Fourth Industrial Tribunal, West Bengal by order dated  June 3,1958. Before dealing with the contentions of the parties it  would be desirable to set out some more facts.  The Western  India Match Co., has got factories not only at Alambazar but  also at  Bareilley  in Uttar Pradesh  Ambernath  in  Maharashtra, Tiruvottiyur  in Madras and at Port Blair.  The  Factory  at Alambazar  was established in the year 1930.  Besides  these factories the respondent maintains separate sales offices at various  places in India to push sales and  execute  orders. One  of  such sales offices is located in the city  of  Cal- cutta. At the time of the reference 1, 866 persons were employed in the factory at Alambazar.  Out 31 of them 1,504 were daily-rated or piece-rated employees  and the  remaining  362 were monthly-rated  employees.   Amongst them  27 were officers, 67 clerks and 32  supervisors.   The rest were bearers, watchmen, malis, fitters etc.  Apart from the officers all the monthly-rated employees admittedly Fall within the definition of workers under the factories Act. In the year 1946 a union called the Wimco Mazdoor Union  was formed  comprising only of the daily-rated  and  piece-rated workers.    This   union  was  given  recognition   by   the respondent.  In the year 1950 another union called the Wimco Employees,  Union  comprising solely  of  the  monthly-rated employees,  other  than officers, was formed  and  was  duly

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recognised  by the respondent.  One of the conditions  under which  the  recognition was given was  that  its  membership should  consist  only  of  monthly-rated  employees  of  the factory except the officers. Shortly after the recognition of this Union it entered  into an  agreement with the management of the respondent  company whereby  the scales of pay, dearness allowance  and  various conditions of service of the monthly paid employees at Alam- bazar  factory were settled.  The date of this agreement  is September 29,1951. Certain disputes arose between the Union and ’the respondent in  the year 1954 which were referred by the  Government  of West  Bengal  by its order dated September 1,  1954  to  the Second  Industrial Tribunal, West Bengal, for  adjudication. In the course of the proceedings, however, an agreement  was reached  between the appellant-union and the  respondent  on April  29, 1955.  Eventually on September 15, 1955 an  award made in pursuance of the settlement arrived at was published in the Calcutta Gazette.  It may be mentioned that the 32 settlement  related  to  various  matters  relating  to  the conditions  of  service  of  employees  including  pay   and dearness  allowance.   Further,  under  this  agreement  the production  bonus which the monthly rated  workmen  received was  merged  in their basic pay.  The  aforesaid  award  was terminable  upon giving two months’ notice commencing  after December   31,  1956.   Without  giving  a   formal   notice terminating  the  agreement the appellant-union  made  fresh demands  on January 25, 1957 pertaining to the same  matters which were covered by th at agreement. What  happened thereafter has already been indicated  by  us above. The main ground on which the appellant union sought revision of  the  previous award and the alteration of the  basis  of computation of the dearness allowance and alteration of  the scales  of pay is that what the respondent is paying to  the factory  employees  works out to something very  much  below what corresponding employees at the sales office get.  This, they say, is unfair.  The second ground on which their claim with  respect  to these two matters is based is  that  other com.  parable concerns give better terms to their  employees than  the respondent.  The third is that the  present  rates are inadequate in view of the rise in cost of living and the fourth, that the respondent in making large profits and  can easily  afford an upward revision in dearness allowance  and scales of pay. On  behalf  of the respondent a  preliminary  objection  was taken to the effect that the tribunal had no jurisdiction to proceed with the reference because no notice terminating the settlement  as  contemplated  by  s. 19,  sub-s.  2  of  the Industrial  Disputes Act, 1947 was given by  the  appellant. On merits its contentions were 33               (1)   that   the  conditions  of  service   of               employees  of the sales office  are  different               from those working in the factory;               (2)   that  there has been no material  change               of  circumstances  since  the  making  of  the               previous award justifying any revision of  the               scales on the lines suggested;               (3)   that the conditions of service to scales               of  pay and dearness allowance  prevailing  in               the  factory at Alambazar are as good,  if  no               better,  than  those  of  employees  of  other               concerns such as Bridge &. Roof Co.,  Imperial

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             Chemical  Industries,  Hindusthan  Lever   and               Marshall & Sons which. are in fact much larger               concerns  and  cannot  be  compared  with  the               respondent-company;               (4)   that the respondent has not the capacity               to  pay  higher  dearness  allowance  to   its               monthly-rated employees in the factory, due to               increase  in  the cost of  production,  labour               charges,  enhancement of excise duty and  keen               competition   of  the  products   which   have               together  resulted in reducing the  percentage               of profits. The  preliminary  objection was overruled by  the  Tribunal. It, however, bold that the employees at the factory were not entitled to a higher dearness allowance or to the alteration of  the basis of computation of the dearness  allowance  but that  there  has been a chanae in  the  circumstances  which justified  a  revision in the scales of pay.   The  Tribunal accepted  the contention and adopted the revised  scales  of pay offered by the respondent-company to the appellant-union daring the conciliation proceedings Mr.  B.  Sen  for  the  respondent-company  reiterates   the objection based on s. 19 (2) of the Industrial Disputes  Act 1947.  That provision is to the 34 effect that a settlement arrived at between the employer and the employees shall be binding for such period as is  agreed upon  by  them and if no such period is agreed  upon  for  a period  of  six months from the date of the  settlement  and shall  continue to be binding on them after expiry  of  that period until the expiry of two months from the date on which a  notice  in  writing of his  intention  to  terminate  the settlement is given by one of the parties to the       other party. Unquestionably the parties  had    arrived    at    a settlement  on April 29, relating, amongst other things,  to dearness  allowance  and  the scales of pay  and  no  formal notice  as contemplated by sub. s. (2) of s. 19  was  given. In  our opinion, however, it is not open to the  respondent- company  to raise this contention in so far as  revision  of Pay  scales  is  concerned  because  in  the  memorandum  of settlement May 23, 1958 signed by the representatives of the parties  to  this  appeal it is clearly  provided  that  the revision  of scales of pay be referred for  adjudication  to the  same  Industrial Tribunal which was  dealing  with  the question   of  dearness  allowance.   Besides,  that,   this memorandum contains the following recital:               "Parties were met jointly on several occasions               as  a  result  of which  the  entire  dispute,               except  the issues of (1)  Dearness  allowance               (which has already been referred to the Fourth               Industrial Tribunal for adjudication) and  (2)               Revision of scales of pay, has been settled on               the following terms;..........." This  recital  shows that the respondent  was  agreeable  to refer  to  the  Tribunal  not only  the  issue  relating  to revision  of pay scales but also that dealing with  dearness allowance.  Further, in para 37 of its written statement the respondent-company  clearly accepted the’ position that  the Tribunal had jurisdiction to deal with the issue of dearness allowance.  This circumstance precludes the respondent from                              35 now  objecting  to the jurisdiction of the  Tribunal,  Apart from that we may point out that in its reply dated March 29, 1957  to  the  charter  of demands sent  on  behalf  of  the appellant-union  it was stated that the previous  settlement

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had  not been validly terminated and in answer to  that  the General Secretary of the Union wrote on April 8,1957  saying that  various  representations  made by  the  union  to  the respondent  and the presentation of the charter  of  demands amounts to a notice of termination of the settlement.  Thus, though no formal notice under s. 19(2) was given this letter can itself be construed as notice within the meaning of that provision.  It may be noted that the representation was made long  after  the expiry of two months from this  date.   For these reasons we overrule the contention of Mr. Sen. Now,  coming  to the merits, the main point  urged  by  Mr. Chatterjee  on  behalf of the union is that there  has  been discrimination  between the employees of the  respondent  in the  Alambazar factory and their counterparts in  the  sales office in Calcutta.  According to him even though these per. sons  do  the  same kind of work they  are  given  different grades  and scales of pay and different scales  of  dearness allowance.   He  contends  that the employees  of  the  same employer doing the same kind of work in the same city  ought not to be differentiated in this manner and that decision of the  Tribunal  denied  the members  of  the  appellant-union equality with their counterparts in the sales office and  is contrary  to  the  principles  of  industrial  law  we  may, however,  point out that the appellant-union  claimed  party with-the  sales  office  employees only  in  the  matter  of dearness  allowance  and have referred to the  existence  of different pay scales in the sales office only in support  of their  claim  for  an upward revision  of  the  present  pay scales.   It is, therefore, not open to learned counsel  now to urge that the pay scales also 36 should  be same for the factory employees as for  the  sales office   employees.   We  shall,  therefore,  consider   the argument  based on the ground of unwarranted  discrimination only  in  so far as it relates to the question  of  dearness allowance. For  considering  this argument it is desirable to  bear  in mind  the history of industrial adjudication in  Bengal  and also the precise reason why a different basis for  computing dearness allowance is applied to the respondent employees in the sales office from that applied to its factory employees. Towards  the  end  of the year 1945 the  Bengal  Chamber  of Commerce  made  an enquiry as to the cost of living  of  the clerical  staff employed in mercantile firms in the city  of Calcutta.   On the basis of that enquiry it fixed a  certain amount  as dearness allowance for these employees.  It  also fixed for the employees what it called the middle class cost of  living index and recommended acceptance of its  findings to  its  constituent  members.   Mr.  Sen  stated  that  the respondent’s sales office is a member of the Bengal  Chamber of Commerce but its factory in Alambazar is not a member  of the Chamber of Commerce and this was not controverted by Mr. Chatterjee. In  the year 1948 disputes arose between the  employees  and employers  of  engineering  firms in  Calcutta  as  well  as employees and employers of mercantile concerns in  Calcutta. These   disputes  were  referred  to   separate   Industrial Tribunals.  The first Engineering Tribunal was appointed  on July  3, 1948 to which disputes relating to  119  companies, including the respondents factory, were referred.  The award made by it was eventually published in the Calcutta  Gazette and effect was given to it.  Further disputes arose  between some  engineering concerns and their employees.  These  were referred to a second Engineering Tribunal on August 31, 1950 37

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and effect was given to its award.  It would, there.  ’fore, appear that members of a union like the one of employees  of the  respondent’s factory at Alambazar have been dealt  with on a different footing from the employees of a sales  office in  Calcutta, the former being employees of  an  engineering concern  and  the  latter  of a  mercantile  one.   It  was, however, contended before us that they are not two  indepen- dent  undertakings  but  parts of the  same  one,  that  is, Western  India Match Co., and, therefore, in the  matter  of payment of dearness allowance at least they should be  dealt with on the same footing. As  we have already pointed out the employees in  the  sales office  are  governed by the recommendations of  the  Bengal Chamber  of Commerce which .the respondent was more or  less bound   to  accept  to  be  in  line  with   other   similar establishments  and,  therefore,  the case  of  the  factory employees  cannot be equated with that of the  sales  office employees. In Clerks of Calcutta Tramways v. Calcutta  Rail- ways Co. Ltd.(1) the clerical staff of the Calcutta Tramways claimed  that since they belonged to the middle  class  they should  be  paid  dearness allowance on  the  basis  of  the finding  of the Bengal Chamber of Commerce.  Their plea  was negatived by this Court on the ground that in the matter  of grant of dearness allowance no hard and fast rule is  appli- cable  to all kinds of employees, that there  are  different grades amongst middle classes and the clerical staff of  the Calcutta  Tramways  cannot  claim  to  be  awarded  dearness allowance  at  the  rates fixed by  the  Bengal  Chamber  of Commerce  for mercantile firms.  It may further  be  pointed out that the factory employees cannot all claim to belong to the  middle  class  because admittedly  two-thirds  of  them belong to what is known as the subordinate staff. It  may be that the clerical staff both in  Calcutta  proper and, in Alambazar does work which (1)  [1956] S.C.R. 772. 38 one set of clerks does is not the same as that of the  other set.  Clerks in the factories have to do work in  connection with the manufacturing processes in the factory, the  labour employed  in  the  factory, raw materials  arriving  in  the factory, the finished products of the factory and so on  and so  forth.  The work which the clerical staff in  the  sales office  has  to do is connected with the  marketing  of  the finished  product,  dealing with other firms,  carrying.  on correspondence  with the head office and other units and  so on  and so forth.  There is no identity in the work  of  the two  sets of clerical staff though there may be  similarity. It   is   said   that  the  work  they   do   carries   more responsibility.   That may or may not be so but clearly  ’if the  work  each set of employees does is hot  identical,  it would  be open to the employer to place different values  on them.   The same thing could be said about the work  of  the subordinate   staff.   If  under  these  circumstances   the respondent agreed to adopt a different mode .of  computation of  dearness  allowance in respect of the employees  in  the sales office from that offered by it to the employees in the factory,  could  it be said that the respondent  was  making invidious distinction?  The sales office being a  mercantile office the respondent bad to fall in line with other similar establishments and pay to the employees in the sales  office the  same dearness allowance as other mercantile firms  were paying to their employees.    In   the   circumstances   the factory employees   cannot  as  of  right  demand  that  the benefit of     the  rates  fixed by the  Bengal  Chamber  of Commerce  be also given to them though those rates were  not

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intended to be applied to them. Moreover  it  has to be borne in mind that in  the  previous settlement  the appellant-union was content to  accept,  the working  class  cost  of  living  index  as  the  basis  for determining their dearness                              39 allowance  and  even  in their  present  demands  they  have alternatively  suggested  that  the  same  be  adopted  with certain variations in the rates in three slabs. It  is  true that the employees in Alambazar as well  as  in Calcutta are living within the limits of the Corporation  of Calcutta.   But that circumstance though relevant is not  by itself  sufficient  to justify payment to them of  the  same rate  of dearness allowance as the sales  office  employees. We  cannot  ignore  the fact that  the  employees  of  other factories  situate  in  that  area  are  not  paid  dearness allowance  at the rates formulated by the Bengal Chamber  of Commerce  and, therefore, if those rates are adopted by  the respondent  with  respect  to  the  factory  employees   the existing  industrial peace in that region may be  destroyed. The tribunal must, therefore, be said to have exercised  its discretion  properly  in  not acceding  to  the  appellant’s demand in this respect. We may also point out that the employees in the factory have been  recruited  on  terms and  conditions  which  from  the beginning  are  different from those that govern  the  sales office employees.  It is not disputed that certain  benefits such  as those relating to rations, free quarters,  gratuity etc.,  which are extended to the factory employees  are  not extended  to  the  sales office employees.   What  is  said, however,  is  that the sum total of these  considered  along with the pay and dearness allowance of the factory employees still place them at a disadvantage as compared to the  sales office  employees.   It  is  true  that  the  sales   office employees  are,  by  and large. in  a  comparatively  better position;   but  that  again  is  due  to  the   fact   that recruitments  in the two establishments have all along  been made on different terms and conditions. We  do  not  think  that  there  is  any  valid  reason  for compelling employers to offer uniform terms of 40 employment   to   their  employees  working   in   different establishments  because  various considerations  must  enter into  the  question such as the value of their work  to  the employer, the employer’s ability to pay, the cost of living, the availability of persons for doing the particular kind of work  and  so  on.  Indeed, the  Minimum  Wages  Act  itself proceeds on the basis that the employer has large discretion in  so  fax as the most important condition  of  service  is concerned,  that  is, pay, so long at it is  not  below  the minimum  wage prescribed.  It is a well known fact that  the highest   employer,  the  State,  does  not  offer   uniform conditions  of  service to all employees doing  work  which, broadly  speaking, may be called similar.  Thus to take  one illustration,  the clerical staff and the  menial  staff-now called  class  IV  staff-employed  in  the  Secretariat  are governed  by terms and conditions of service different  from those  prevailing in other offices such as those  under  the Delhi Administration.  High powered Pay Commissions have not regarded  this  as discriminatory treatment or breach  of  a principle of industrial law.  In the State of Madhya Pradesh v.  G.C.  Mandawar  (1) it was contended on  behalf  of  the clerical  staff  in the State of Madhya  Pradesh  that  they should  be paid dearness allowance at the same rate  as  the Central  Government employees posted in Madhya  .Pradesh  on

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the  ground  that they were doing similar work at  the  same place.   Their  contention was, however,  rejected  by  this Court. Looking at the matter thus we cannot say that the Industrial Tribunal  in  refusing  to extend to the  employees  of  the respondent  in  the  factory in  Alambazar  the  benefit  of dearness  allowance  formulated  by the  Bengal  Chamber  of Commerce has contravened any principle of natural justice or any   important  principle  of  industrial  law.   In   this connection we (1)  (1955) 1 S.C.R. 599. 41 may   refer   to   the  decision  in   Bengal   Chemical   & Pharmaceutical  Works  Ltd., Calcutta v. Their  Workmen  (1) where Gajendragadkar, J., who spoke for the Court observed:               "Though  Article  136  is  couched  in  widest               terms,  it  is  necessary for  this  Court  to               exercise  its discretionary jurisdiction  only               in cases where awards are made in violation of               principles   of   natural   justice,   causing               substantial and grave injustice to parties  or               raises  an important principle  of  industrial               law  requiring elucidation and final  decision               by   this  Court  or  discloses   such   other               exceptional  or  special  circumstances  which               merit the consideration of this Court." Therefore,  even  assuming that an Industrial  Tribunal  has exercised  its  discretion wrongly in not  awarding  uniform dearness allowance to all the employees of the same employer but who are working. in different establishments, that is no ground for interference under Art. 136. The   second  ground  on  Which  the  ’tribunal’s   decision regarding  dearness allowance is challenged is that even  at the  stage  of giving evidence Mr. Was  mouth,  the  General Manager  of  the respondent said that the  respondent  still sticks to the offer regarding dearness allowance but despite ’that  the Tribunal did not make any change in the  dearness allowance.   It is contended on the basis of this  stand  of Mr. Wasmouth that the respondent accepted the position  that there  was  scope for raising the  dearness  allowance.   In answer  to  this argument Mr. B. Sen urged  that  the  offer which the company had made was a package deal but since  the appellant-union  was not willing to accept the whole of  the respondents  offer, the Tribunal was right in  not  granting any  increase in the dearness allowance.  We may point  out, however, that the (1)  (1959) Supp. 2 S.C.R. 136,140. 42 only outstanding questions between the parties were  two-one relating to the dearness allowance and the other relating to the scales of pay.  A comparative chart showing the  union’s demand  and  the company’s offer of the existing  scales  of pay, dearness allowance, superannuation, casual leave,  sick leave  and  over-time  has  been placed  on  record  and  is annexure  G.I. We are not concerned with matters other  than the  first two and we, therefore, reproduce below only  that portion of the chart which relates to the first two of these matters: Union’s demand                Company’s offer RS.                                              Rs. 1. Grade & A 1 35/- 118/-65/- (30yrs.) 30/- 1/4/                           50--EB-1/4/- 55/- scales of A 2 40/- 2/8/- 90/-  "        35/- 1/4/-                                    55-EB-1/4/- 60/- pay  A 3 60/- 3/8/- 130/-    "    60/- 2/0/- 80/

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     B 1 65/- 5/0/- 115/-EB-7/- 55/-4/0/- 95/-                                  EB-5/- 125/,                              185/- (20 yrs.) no offer       C 1 75/- 6/0/- 135/.EB-8/- 70/- 5/8/-125/-                                  EB-7/                        215/- (20 yrs.) 167/-EB-195/-       C 2 95/- 8/0/-175/-BB-12/. 85/-7/81-160/-                           EB-10)-             295/-(20 yrs.)        220/.EB-10/-260/-      C 3 120/- 12/0/- 240/-EB- 18/- 110/-10/-210/                                    EB-16/.              420/-(20 yrs.)        3061-EB-16/-370/-      C 4 Upto a limit of Rs. 650/-            Upto a                                  limit of Rs. 500/- 43  A. As per sales office 2. Dear-             Employees                   No offer ness                   on allo- wance B. Rs.                              Rs. 1 to 50/-basic 125%        1 to 25/- basis 125%** 51 to 100   "    25%       26 to 50    "     40% 101 to 160  "    17%       51 to 150   "     30% 151  to 200 "    12%       151 to 200  "     12% 201 to 250  "     7%  201 to 250  "      7% 251 to 300  "     5%  251 to 300  "      5%      In addition 3% for  In addition 3% for      every 5 pts. rise   every 5 pts. rise      or fail of work-    or fail of work-      ing class index     ing class index      figure.                 figure.                      **Adjusting the existing                       R. B. with this salb. It  will  be  clear  from  this  that  the  union  had  made alternative  demands in respect of dearness  allowance,  one was  that the same scale as that for sales office  employees should be adopted and the other was variation in three slabs of  the  present scheme accepting as the basis  the  working class  cost of living index figure.  The company refused  to make any counter-offer with regard to the primary demand  of the  appellant-union.   But  in regard  to  the  alternative demand  it  made  a counter-offer.   If  we  understand  Mr. Wasmouth right the respondent company stood by its  counter- offer  based  on  the working class  cost  of  living  index figures before the Tribunal even though the 44 conciliation   proceedings   broke   down.    During   these proceedings   this   counter-offer  was  linked   with   the counteroffer  pertaining  to  grades  and  scales  of   pay. Presumably, therefore, the company regarded the package deal not  merely  as  a concession made for  putting  an  end  to disputes  but  also because it regarded it as fair  and  the financial commitment entailed by it to be within its  means. No  doubt  in the evidence Mr. Wasmouth has  said  that  the respondent-company  does not stick to its offer relating  to grades  and scales of pay.  But that would not  render  what was  a  fair  and  reasonable  offer  during  the  stage  of negotiations,  no longer fair and reasonable  or  necessary. The  Tribunal  has revised the pay scares on  basis  of  the respondent’s  offer.  If, therefore, dearness  allowance  is revised on the basis of the respondent’s offer what would in effect  be  done  would be only that  which  the  respondent company  during  the  conciliation  proceedings  had  itself offered  to do, a thing which was considered to be fair  and

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reasonable  and also necessary.  In these  circumstances  we find  it difficult to understand the principle on which  the Tribunal  proceeded  in  refusing to revise  the  scales  of dearness allowance on the basis of the  respondent-company’s offer. Though,   therefore,  we  reject  the  contention   of   the appellant-union that the dearness allowance should be  fixed on  the same basis as that obtaining in the sales office  we think  that  in view of the stand taken by  the  respondent- company throughout the proceeding& dearness allowance should be revised in accordance with the company’s offer.  The fact that it made such an offer is indicative of two things : the necessity   and  propriety  of  revision  of  the   dearness allowance  as well as the ability of the  respondent-company to pay higher dearness allowance.  It was no doubt contended 45 before  us that the offer was made during  negotiations  and was  without prejudice and we should therefore, keep it  out of  our  mind.   But we cannot overlook the  fact  that  Mr. Wasmouth  stuck  to that offer even after  the  conciliation proceedings  had  ended  infructuously and  thus  in  effect revived the original offer. Mr.  Sen, however, argued that on the basis of the  decision in  Bun & Co. Ltd., v. Their Employees (1) that an award  of industrial   Tribunal  cannot  be  reopened  unless  it   is established   that   there  has  been  a   change   in   the circumstances on the award is based and that since there has been  no  such  change  the award  of’  1955  pertaining  to dearness allowance ought not to be revised.  It is true that an  award  cannot ordinarily be revised unless  there  is  a change of circumstances.  But here, there has been a  change of circumstances because cost of living has admittedly  gone up  since  then.  This is so notorious a fact  that  we  are entitled  to  take  notice of it.  The  object  of  awarding dearness allowance is to neutralise, at least partially, the rise  in  the cost of living, and in the  circumstances  the factory  employees  are entitled to say that the  old  basis needs  to  be revised.  There is thus no  substance  in  Mr. Sen’s argument. On  the  question  of  the grades  and  scales  of  pay  the contention  of learned counsel is that the Tribunal has  not applied  its  mind  to the question  but  ha,;  mechanically accepted  the  respondent’s offer.  This  statement  is  not wholly  accurate,  No  doubt the Tribunal  has  accepted  as reasonable, the offer which the respondent has made ; but it has  given reasons for doing so.  In its award the  Tribunal has stated               "The  principal point made in support  of  the               demand  is that the grades and scales  of  pay               are too short and that they should be               (1)   [1956] S,C,R. 781.               46               extended with such modifications as may appear               necessary in the circumstances of the case. "               Then after comparing the existing grades  with               the company’s offer the Tribunal observed:               "It  would  appear at a glance at  this  chart               that the existing rates provide for scales  of               pay  in the case of six grades upto  16  years               and  in  the case of one it provides  for  ten               years   only.   The  Union’s  demand  is   for               extending the scales upto 20 years in place of               ten  and sixteen years, and both  the  minimum               and  maximum limit of the scales of pay  would               be  raised in all cases.  The Company’s  offer

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             except  in the case of grade B(1) if  much  in               advance  of the existing grades and scales  of               pay.    There  are  good  justifications   for               revision of the grades and scales of pay,  and               the  Company’s  offer, in my  opinion,  should               have been accepted by the Union.  The revision               of  the  grades and scales of pay  as  in  the               Company’s  offer  will,  to  a  great  extent,               remove  the hardships of the  employees,  who,               for  the present, must remain  satisfied  with               such revision. It  has, therefore, applied its mind to the company’s  offer and  also borne in mind the demand made by the union.   Upon consideration  of  these matters the Tribunal  came  to  the Conclusion  that  the company’s offer is a  reasonable  one. Its  finding  in this regard is one of fact  and  cannot  be permitted to be challenged in an appeal under Art. 136. In this view we allow the appeal partly and direct that  the award  be  modified  by  providing for  a  revision  of  the dearness  allowance  on the basis of  the  company’s  offer. Subject to this modification, the appeal will, be dismissed. In  view  of the partial success of the parties we  make  no order as to costs. Appeal allowed in part. 47