1. GOPIVALLABHA IYENGAR, J.-This petition under Articles 226 v. and 227 of the. Constitution of India is one by the Management of the Gokak Mills Ltd., Gokak Falls, praying that the award made by the Industrial Tribunal in Mysore, Bangalore, dated 22My August, 1967, in Industrial Dispute No. 12 of 1966 be quashed. Got The Industrial Tribunal in Mysore; Bangalore, is impleaded as the first respondent. The other four respondents are the Trade Unions representing the interests of the employees of the petitioner. The second, third and the fifth respondent are respectively represented by Advocates Messrs A. B.
2. Marliappa, K. T. Sule and Mandappa. The fourth respondent was, represented by its President.
3. The second respondent-Union issued a notice dated 16th July, 1964, to the petitioner terminating the agreement between the parties, relating to dearness allowance as the circumstances had changed. A demand was made that the dearness allowance should be given to the workers of the Gokak Mills as per the rate of dearness allowance of the Sholapur living index. Another notice was issued on 22nd October 1964, reiterating the demand as above-mentioned and asking the mills to consider the claim from 16th July, 1964, and also to pay the arrears; but later, on 2nd January, 1965, the second respondent Union made a specific demand to the effect that the dearness allowance of every employee should be raised and made equal with the dearness allowance of the Sholapur Mills on the basis of the living index and the demand made should be considered with effect from 1st. January 1965. The Management having declined to recognise the demand, the matter went up for conciliation before the Assistant Labour Commissioner and Conciliation Officer, Hubli. On 19th February 1966, the Government of Mysore made a reference of the dispute under clause (d) ofnd subsection (1) of section 10 of the Industrial Dispute Act, 1947, to the Industrial Tribunal at Bangalore.
4. The points of dispute referred are in the following terms:- "Whether the Gokak Girni Rashtriya Mazdoor Sangh. Gokak Falls, Gokak, are justified in demanding dearness allowance of every employee to be raised and made equal to the dearness allowance given in Sholapur on the basis of the cost of living index with effect from 1st January, 1965?
5. "If not, to what quantum of increase or relief are the employees entitied to?"
6. With respect to this reference the Unions submitted a Statement of Claim and the Mills submitted their counter-statement. In the Statement of Claim mention is made that the existing rate of deafness allowance is fixed by an award of the Industrial Court, Bombay, in I. C. No. 82 of 1949: This award is stated to have been made in, terms of a Memorandum of Settlement. It was agreed- between the parties that the dearness allowance was to be paid at 1.25 pies per point rise per worker per day over the August 1939, Sholapur working class cost of living index number.
73. This award was made on 18th January 1950, The company, it is alleged, is engaging about 6;000 workers. The basic minimum wage was fixed as far back as in 1950 at Rs. 21-12 pies and the dearness allowance was fixed as above-- mentioned. It is submitted that the wages and the dearness allowance payable to the workmen of the Gokak Mills were linked with Sholapur. It is not disputed that the dearness allowance paid at Sholapur to the employees similar to those of the Gokak Mills was 1.75 pies leer point rise per day over 73 points-'cost of living index. This, it is submitted, works out at 66.66 % neutralisation in the case of Sholapur Mills. It is seen from the counter statements that the percentage of neutralisation at Gokak is 58.4 per cent. The labour Unions referred to as the first party .set out in their statement comparative figures of the Gokak Mills and the mills in Sangli area, with reference to capital, reserves, profit or loss for a period of five years from 1954. They also state that the rate of dearness allowance at, Madhavanagar Cotton Mills was fixed at 91.66 % of Sholapui dearness allowance by an award from 1st January 1951 and it was revised again to 92 % with effect from 1st January 1960, They, complain that the conditions of living at the Gokak Mills are much harder than those at the other mills referred to above. They state that the company has made huge profits, and, therefore, they are liable to meet their demands.
7. The second party, viz. the Gokak Mills raised a preliminary objection stating that the Government of India, by a resolution dated 12th August, 1964, have set up a second Wage Board for the Cotton Textile Industry in the country, to consider the question of further revision of the wage structure in the industry and therefore the entire reference is bad and that the first party is estopped from claiming any higher dearness allowance. So far as this contention is concerned, Sri V. L. A Narasimha Moorthy, the learned Advocate for the petitioner, stated that this is not a case of estoppel,as understood in law, but that the Tribunal should have considered the advisability of dealing with -the reference in view of the constitution of the Wage Board ,by the Government of India or could have given certain directions with reference to the expected report of the Board. The second party contested the claim of the employees on several grounds. They state that the dearness allowance is an integral part of the total wages paid to the employees and therefore any demand for increase in dearness allowance in isolation without taking into consideration the totality of the wages including fringe benefits, is entirely, unwarranted. They state that the total wages paid to the employees at Gokak Mills including the fringe benefits are fair and adequate. It was admitted that the company is engaging about 6,000 workers. It was further pleaded that it has a colony of its own, primarily for workmen and for its supervisory and managing staff. They deny that the conditions of the workmen are miserable as pleaded by the first party and the tenements provided for them are dirty or unsanitary. Regarding the wage structure of the workers of Gokak Mills, it is stated that there was an adjudication in I. C. No. 31 of 1955 in which the Industrial Court of Bombay held that the wage of Rs. 26 for Sholapur is generous and dismissed the said petition, while finding that Rs. 21.12 for Gokak is fair and reasonable. The Management denied that the petitioner company was linked with Sangh, Miraj and Madhavanagar Mills by the previous Tribunals. The company admitted that the rate of dearness allowance at Sholapur was 1:75 pies per point rise per day, whereas Gokak it is 1'25 pies per point rise per day. They further stated that though the company is employing 6,000 workers, including substitutes, the average employment fluctuates between 4,800 and 5,200 per day. They submit that most of the workers come from the nearby villages where the cost of living is much cheaper than that obtaining at Gokak Falls, where the mills are.-located. While admitting that the prices of essential commodities have increased in general, it is submitted that the dearness allowance paid to the workers has also been increasing month after month. In 1950 the Sholapur working class cost of living index number was 298, whereas the cost of living index number shot up to 512. The company also contended that after reorganisation of States and from 1st November 1956, Gokak Falls area which is now in the Mysore State can be compared with textile units in Mysore State and not with any other mills in other areas. The company also states that as a result of the recommendationsthe Lakadawalla Committee, the Sholapur cost of living index was revised and the company adopted the 'revision and paidworkers dearness allowance at such revised rate. They contend that the total emoluments that the workers at Gokak Mills get are fair and when compared to other industries are on a higher side. It is alleged that in addition to dearness allowance the workers are getting reasonable bonus also. The company adds that the present rate of dearness allowance linked to Sholapur working class cost of living index number is more than adequate. They further state that any increase in the dearness allowance: will as a result jeopardise the company's position and will affect, its competitive capacity apart from the fact that it will create unnecessary dissatisfaction in the local area where the wage rates are very much lower than those grand to the company's workmen. Regarding the financial position of the company they deny that the company is able to build up crores of rupees as reserves. They further state that the company has expanded its activities in various ways to meet the competition in the industry and had to float debentures in 1957 and increase its capital in 1961. The company further states that most of the profits earned have been invested back in the company's activities and shareholders are getting; a small dividend subject to deduction of taxes. The true position of tax, company is said to be reflected in the balance-sheet and the profit and loss accounts of the company with the development programmes. It is submitted that the Sangh is not justified, in its demands nor is the company is a position to meet demands.
8. In the reply filed by the first party, it is contended that the audited statement of accounts of the company prove the financial stability of the company. It was alleged that the increase in dearness allowance does not meet the rise in prices of the commodities every month. It was submitted that the industry---cum-region basis does not apply to the second party because region is not defined. Comparing Gokak Falls with Bangalore, it is mentioned, the workmen working in the textile industry in Bangalore get 20 paise for every point rise in the cost of living index over and above 100 and the workmen, in Bangalore working. in the textile industry get Rs. 128 by okay of dearness allowance alone per month and they are justified in comparing their wage-- structure with their counterparts in Bangalore.
9. With reference to the preliminary objection raised by the second party, the Tribunal framed an issue as follows:- "Are the first-party workmen estopped from claiming clear--ness allowance to every employee by reason of the fact that they have accepted the benefits from the recommendations of the first Wage Board and by reason of the fact also that the Government of India have appointed a second Wage Board to go into the question?"
10. It gave a finding negativing the second party's contention and holding that the first-party-workers were not estopped from claiming the dearness allowance to their employees, by reason of the fact that they have accepted the benefits of the First Wage Board recommendation and by reason also that the Government of India have appointed the Second Wage Board to go into the question.
11. The first--party examined three witnesses, while the second party examined only one witness the parties have filed numerous documents and statements as exhibits in the case, including the balance-sheets of the company from the year 1961 to 1966. In this Court the parties have produced the balance-sheet for the year 1967 also. The Tribunal passed the award on 22nd August 1967, holding that the Gokak Girni Rashtriya Mazdoor Sangh, Gokak Falls, is entitled to dearness allowance with effect from 1st January 1965, at the rates paid to the Sholapur Mill employees as indicated above, i.e. at Rs. 1.75 pies per day per point rise in the cost of living index as at, Sholapur. It also directed that the second party should pay a sum of Rs. 500 to the first party's Sangh toward costs. It is this award that is now impugned before us in this Writ Petition.
12. Sri V. L. Narasimha Moorthy, the learned Advocate for the petitioner, has attacked this award on the ground that the Tribunal has ignored the principles of law governing the several factors that arise in connection, with the determination of the dearness allowance claimed by the employees. He contends that the award is patently erroneous even in regard to the arithme--tical calculations regarding the financial burden. Further, it is contended by him that the Tribunal has not taken into consideration the evidence bearing on the several questions arising in this case and therefore the award is liable to be set aside, as being patently and manifestly erroneous and as being opposed to law.
13. Before dealing with the above question, we may refer to the preliminary objection raised by the second party- before-the Tribunal. As mentioned earlier, it is not the petitioners contention that by virtue of the constitution of the S and Wage T., Board, the second party is estopped from raising the demands, but that the Tribunal should have either postponed the Go adjudication or should have given a. direction that whatever was award is made will ultimately be subject to the recommendations of the Wage Board. This contention appears to us to be without substance. It must be noted that the Wage Board referred to by the second party is not a statutory body and whatever decisions it might give would be only of a recommendatory character: and will not bind the Tribunal. In this connection our attention is-- drawn to the decision Chltavalsah Jute Mills Co.
14. Ltd. v, Their Workman (1967 32 F J R 64) wherein the Supreme Court observes:- "This recommendation relates to the industry as a whole' and not to any individual industrial unit.
15. That recommenda--tion cannot be understood as recommending that there should be no gratuity scheme for the employees in any particular unit, in that industry. What is true of an industry as a whole need not necessarily be so in respect of a unit there in. That position in law was not, disputed by Mr. Gokhale, and learned counsel for the appellant. Therefore, in considering the appropriateness or otherwise of the impugned scheme, we have to primarily consider its repercussion on the appellant."
16. In view of the above-said observation, it was not necessary for the Tribunal to postpone the adjudication or to issue any direction as suggested by the learned counsel for the petitioner.
17. The Tribunal, in paragraph 5 of the award, sets out two points that arose for consideration. The first point is whether "the first party has established the change of circumstances so as to necessitate the revision of dearness allowance. The Tribunal proposes to consider how far the dearness allowance should neutralise the deficiency in wages and the cost of living index." The second point proposed is to consider "the financial capacity of the second party to bear the additional financial burden after the scheme of dearness allowance is to be revised on the basis of the. Sholapur cost of living index". It is contended that though the Tribunal proposed to consider the question as to how far the dearness allowance should neutralise the deficiency in wages and the cost of living index, it has nowhere in the award considered this question. It .is contended by Sri V. L. Narasimha Moorthy that the percentage of neutralisation is an important factor to be considered. He invites our attention to the observations of the Supreme Court in Kamani Metals and Alloys Ltd. v. Their Workmen (1967 32 F J R 64) where it is observed as follows:- "A fair wage is thus related to the earning capacity and the workload. It must, however, be realized that `fair wage' is not `living wage' by which is meant a wage which is sufficient to provide not only the essentials above-mentioned but a fair measure of frugal comfort with an ability to provide for old age and evil days. Fair wage lies between the minimum wage, which must be paid in any event; and the living wage, which is the goal. As time passes and prices rise, even the fair wage fixed for the time being tends to sag downwards and then a revision is necessary. To a certain extent the disparity is made up by the additional payment of dearness allowance. This allowance is given to compensate for the rise in the cost of living. But as it is not advisable to have a 100,per cent neutralisation lest it lead to inflation, the dearness allowance is often a little less than 100 per cent.
18. Neutralisation. In course of time even the addition of the dearness allowance does not sufficiently make up the gap between wages and cost of living and a revision of wages and or dearness allowance then becomes necessary. This revision is done on certain principles."
19. Thus it is clear that the question of neutralisation is a facto that requires to be considered by the Tribunal. The other principles on the basis of which the dearness allowance can be revised are also referred to by Sri V. L: Narasimha Moorthy, in the course of his arguments and with which we shall deal later.
20. 'Sri V. L. Narasimha Moorthy drew our attention to certain observations, in the award which are patently erroneous; or have no evidence to support. In paragraph 6 of the award the Tribunal states as follows: "There are two mills manufacturing only yarn and producing and supplying yarn to the tyre manufacturers in the country and huge quantities to foreign countries. Both the mills are in one and the same compound. One can undoubtedly say that the mills are the leading exporters of yarn to foreign countries and this mill is one of the oldest and most prosperous mills in India. The cheap labour that was available and is even now available at Gokak was in no small measure responsible for the prosperity of the company."
21. This statement is not borne out by the evidence that is available to the Tribunal. It appears to be a general observation without any supporting material. The Tribunal further states that in 1937 there was no Union at Gokak. This is obviously wrong. Apart from the fact that there is no material in this regard, it is found by the Textile Labour Inquiry Committee, in its report published by the Bombay Government that with reference to the Gokak Mills that the Gokak Mills' Employees Union formed in 1936 is still in existence. It had a membership of 2,784 on 1st September 1939. If this factor has in any manner influenced the Tribunal in coming to any conclusion, it would be wrong. The statement in- paragraph 6 of the award that it was in the year 1949 that the Union came into existence and the workers agitated for enhanced wages is patently wrong. Further, it is difficult to understand why the Tribunal says "somehow or other the parties came to a settlement in the year 1949 with regard to wages." It must be appreciated that the wages were fixed as a result of a settlement, which is recorded in submission (I. C.) No.8 of 1949, in the Industrial Court, Bombay. The workers were represented by their Union. The matter came up for hearing on 19th July 1949 and the parties agreed upon Rs: 21.12 p. being fixed as the minimum wage for a month of -26 days. There is no basis for the Tribunal's inference that the wages were not fixed on any standardised scale as it was in Bombay, and Sholapur. The Tribunal remarks that:- "So far as Sholapur is concerned, the Court directed the mills to pay minimum wage of Rs. 26, per month in 1949 is addition to 1.75 pies per point per' day over and above 100 points. This award came into force on 1st January 1947. When all this took place in the neighbouring mills nothing happened if the II party mills though the conditions prevailing at Gokak are 'very much the same as those prevailing at Sholapur. This was also due to the fact that till 1947 there was no Union at Gokak and even if there was one, it was a puppet in the hands of the II party with practically no bargaining capacity."
22. In view of what we have mentioned above, regarding the award in submission (I. C.) No. 8 of 1949 and what is mentioned in the Textile Labour Inquiry Committee's Report, this statement does not appear to be borne out by any evidence. The Tribunal further makes a 'very wide statement to the following effect:- "But one may say having regard to the common mode of living of all these workers the cost of living is the same throughout the country. May be, there is some slight change from place to place.
23. That is exactly the reason why both the II party and the I party selected in 1950 the Sholapur cost of living as the guiding factor to determine the rate of dearness allowance. Since then there have been no change in Sholapur to take Sholapur out of the category so far as Gokak is concerned. Any way as per the award of 1950 in reference (I. C.) No. 82 of 1949 on the file of the Industrial Court, Bombay, Exh. M-1 (a) it is clear that both the parties agreed that the Sholapur cost of living index should be guiding factor and the dearness allowance for Gokak workers is to .be fixed on the cost of living index prevailing at Sholapur. The employees of the Gokak Mills practically got nothing by the settlement of 1930 because after the said settlement the grain concession was withdrawn. The benefit which the workers would get from the grain concession would be almost equal to the dearness allowance which they would get."
24. No complaint whatever has been made by the workers in this regard. On the other hand, the workers after bargaining have come to a settlement and have agreed to Rs. 1.25 pies being paid per point per worker per day from 1st February, 1950, as per award dated 25th " January, 1951, Exh.
25. M-1 (a), In the settlement one of the items is:- "It is agreed that with effect from 1st February, 1950, the practice, of supplying grain and other articles at pre-war prices will be discontinued and the Management will not, in future, be responsible for any supply of grain."
26. In view of the settlement, the remark of the Tribunal does not appear to have any basis. The Tribunal further observes in paragraph 6 as follows:-- "Although the textile mills' in the cities like Bombay, Ahmedabad and Sholapur, increased the rates of standardised wages from time to time, the Gokak Mills did not fall in line with these mills with the result the Worker drawing the' wages in 1950 continued to draw the same wages in 1957 also."
27. This is not supported by any evidence and in any event it is not correct to say that the mills did not fall in line with those mills because the mills have increased the dearness allowance and have given effect to the recommendations made by the Lakhadwala Committee, which revised the figures relating to the cost of living index. The Tribunal refers to the cost of living Index in the Mysore State at 740 per month and on the basis of that it says that the mills should be called upon to pay Rs 163.75 per month, while the mills are actually paying Rs. 117 per month. There is no cost of living index, so far as the Mysore State is concerned and it varies from place to place. Further, there is no reason why the Tribunal should take the cost of living in Mysore State into consideration while determining whether there is justification for the increase of dearness allowance in so far as the workers of the Gokak Mills are concerned. It is no doubt true that as mentioned by the Tribunal, the prices of foodstuffs and other necessary articles of living have increased but the question is to what extent the increase can be neutralised, taking into consideration the capacity of the industry to pay. This question has not merited any attention of the Tribunal. The facts of the case and the statements of the parties disclose that they have. consistently taken Sholapur as a standard to which Gokak should compare. It was pointed out by Sri K. T. Sule, the learned counsel for the second respondent, that though the question of industry-cum-region basis does not arise strictly in this case, inasmuch as it is the special need of the workers of the Gokak Mills with reference to increased cost of living that requires to be considered, he has invited our attention to the several factories which indicate that it is with -reference to Sholapur that the conditions of Gokak had to be determined. In the first place the determination of the basic wage was with reference to She Gokak Mills and in the second place in 1. C. No. 31 of 1936 also it is with reference. to Sholapur that the question of the basic wage was considered. Similarly while fixing the dearness allowance in 1. C. 82 of 1.949, the rate of dearness allowance was fixed at Rs. 1.25 pies point per workers per day over the Sholapur working class cost of index taken as 73. Similarly, when the Lakhadwala Committee revised the cost of living index as prevailing at Sholapur, it was that, the Gokak Mills adopted and therefore the Gokak Mills is linked with Shulapur even so lets as 1964. It is not denied that even today it is the Sholapur cost of living index that is taken as the basis for the payment of dearness allowance by the Gok Gokak Mills. It is contended before us that there is ample Mil~ material in this case to take Sholapur as the standard. We are not impressed that the Mysore cost of living index can be taken into consideration because of the reorganisation of' State in My. 1956. Reorganisation of States does not in any manner change the region. For administration purposes it may be that Gokak vale, came under the Mysore State. But so far as the industry is concerned and the determination of the dearness allowance or fixation of the basic wages or providing other amenities, on thei material available, Mysore cannot be taken as the standard. In any event, it was for the Tribunal to -consider this question more carefully and it ought to have examined whether the other industries referred to by the Management has a bearing on the Gokak Mills in respect of similarity of the industries. The Tribunal, of course, has not scrutinised that aspect of the case. Mere change of circumstances in the conditions of living and the cost of living does not by itself justify the grant of increased t, dearness allowance and raising to the level of Sholapur.
28. In regard to the benefits also the remarks made by the Tribunal do not get any support from the evidence. Regarding housing, the Tribunal remarks that they are most ill-furnished quaff tens and they are not well-ventilated; there is no water supply and there is no sanitation. The evidence of the witness examined for the Management does not fully support this conclusion. In this evidence the witness of Management states that there are 1,433 quarters and about 2,300 workers stay in those quarters. The rate of rent per quarter per month varies from 25 paise to Rs. 4.50. He also states that the quarters for which they charge Rs. 4.50 per month are provided with water facilities and lighting facilities. The water facilities being inside the quarters itself. The workmen are, not barged anything for the use of water or, for electricity. But in the course of his cross-examination' he states that there are no latrines attached -to the rooms, nor are there any lights and there is no water tap also. It may be so in the ease of those quarters where the rent charged is 25 paisa.. But from this there cannot be a general inference as the Tribunal has drawn. It may be in some quarters there is no water supply but it is not correct to say that there is no water supply at all and that there is no - provision for sanitation. In the Textile Labour Enquiry Committee's Report of the year 1941, it is recorded that among the labour colonies visited by them, at one end they saw the well-laid out, self-contained colony that has grown round the Gokak Mills where no less than 1,967 out of 2,983 persons employed in the mills reside. The Tribunal has completely overlooked this material though it has referred to the report in some other context. The remarks made by the Tribunal in regard to medical facilities and education facilities are also of any general character without reference to what the mills can afford. There is nothing to indicate that there was any demand in connection with such facilities being made and there has been an unjustified denial on the part of the employers. Therefore it appears to us that the Tribunal has taken a patently unjustifiable view in respect of these particular benefits.
29. The next question relates to the financial capacity of the industry to pay. That is a very important factor which must require a careful consideration by the Tribunal before imposing financial burden on the company is undisputed. The Supreme Court in Filmistan (Private) Ltd. v. Its Workmen ((1966)
30. 1 L L J 744) has observed as follows "It is to be regretted that the Tribunal made this finding without examining the relevant figures which had been produced before it. It is hardly necessary to emphasize that in dealing with a claim for revision of wages which is generally complex and complicated, having regard to the categories of employees engaged in an industrial undertaking, industrial adjudication should not be content with making general observations only: It must examine the facts and figures relating to the financial position of the establishment concerned, compare the said position with the financial position of comparable concerns, enquire what would be the total impact of the additional burden of the revised wage. structure. The failure of the Tribunal to adopt such a course constitutes yet another serious infirmity in its approach."
31. The records show that several statements were produced by the employees in respect of the additional burden on the company and the financial position of the company. The Tribunal has referred to one of those statements, viz., Exh. C-1. It has not referred to the other documents filed by the company to assess the expenditure, profit or loss and determine the true financial position of the company at the time of the award. It is quite clear from the decision of the Supreme Court cited above that it is obligatory on the part of the Tribunal to determine the true financial position of the company and also the financial impact with the increase of dearness allowance would have on the company. This subject consists of two parts-(1) the capacity of the industry to pay and (2) the financial burden that would result by any increase of dearness allowance, which may be granted by the Tribunal. The Tribunal proceeds on the conclusion that there is necessity for a revision of dearness allowance. It cannot be disputed that the living conditions have changed and the cost of living has risen. Therefore, the question for determination would be, to who extent the variations in the cost of living can be neutralised in the circumstances of the case and whether the dearness allowance paid to the workmen sufficiently neutralises the increase in the cost of living. This Tribunal has failed to do. In Wenger &. Co. v. Their Workmen ((1962) 26 FJ R 307), the Supreme Court has laid dowel that:- ---In constructing a wage structure, industrial adjudication has undoubtedly to take into account the overall financial position of the employer because scheme of wage structure including scales of increment is a long term scheme and before it is framed, the Tribunal must be satisfied that the burden imposed by the scheme would not be beyond the means of the employer. In regard to the minimum wage, no such consideration arises because it is the duty of an industrial employer to his employees. But when a wage structure is constructed and it provides for increments, the financial position of the employer has to be borne in mind.--- Regarding the question of increase in dearness allowance as stated in Swastic Cashew Industries Tribunal ((1966) 30 F J R 215) the principles that govern the fixation of fair wages apply to the case of Wenger Co. v. Their Workmen, it is further observed that:--- ---------..In fixing the wage structure and the dearness allowance, it has to take care to the legitimate demand of tine employees is met without doing injustice to the employer and without acting unfairly to him. If the object of dearness allowance is to neutralise the cost of living, it would be purely doctrinaire to ignore altogether the fact that as working in their respective establishments they invariably get some amount of tips from the customers, and we think would not be right to treat the tips received by the waiters as being wholly irrelevant to the decision of the question about the matter of dearness allowance.--- The Tribunal ought to have taken into consideration the question as to what extent the fringe benefits go to contribute towards the neutralisation of the increase of the cost of living index. The Tribunal has failed to take thus aspect of the matter into consideration to find out whether the fringe benefits derived by the workmen --fully cater to the requisite needs or only partially do so. In this connection Sri V. L. Narasimha Moorthy submitted that, while the industry-cum-region should form the basis for fixation of wages and dearness allowance, comparison trust be made with comparable, concerns. Another factor that should be taken into consideration by the Tribunal is the comparable total pay packets received by the workmen. The Supreme Court observes in Greaves Cotton & Co. Ltd., v. Th. it Workmen ((1962) 24 F I R 307) that:- "---. It follows that we must also set aside the award relating to dearness allowance as we have already indicated that the Tribunal has to take into consideration the total pay packet in fixing wages and dearness allowance. When, therefore, the case goes back to the Tribunal for fixing wages find dearness allowance for factory workmen, it will be open to the Tribunal to fix the same rates of dearness allowance for factory workmen as for clerical staff; but, in ding so the Tribunal must when snaking comparisons take into account the total wage packet i.e., basic wages heed by it as well as dearness; allowance and then compare it with the total wage packet of comparable concerns and thus arrive at a just figure for basic wage, for each category of factory workmen. But, the entire matter is left to the Tribunal and it may follow such method as it thinks best so long as it arrives at a fair conclusion after making the necessary comparison."
32. In this case, the second party has produced Exhs. M-2. M-3 and M-4. In Exh. M-2 the Management has given a comparison of the total wages paid by them with concerns in Davanagere region, consisting of eight institutions of them more than four are textile mils. It is seen from that statement that the total wage packets of Management mills is the highest. Exh. M-3 is a statement containing the comparative figures with concerns in Hubli-Dharwar region, though many of them are not textile industries. Exh. M-4 is a comparative statement showing the dearness allowance paid by the Management, with respect to concerns in Belgaum District. Even in this we do not find reference to textile industries. It is in evidence that the distance between Gokak and Davanagere is 339 km. while that between Gokak and Sholapur in 547 km. by rail. It is no doubt true that in regard to Exh.
33. M-2 the details in regard to the capital of each of the concerns, the magnitude of the concern, the profits earned by the concern, the sales affected by the concern, the number of employees employed in the concern etc., are not available. The failure to place proper material for arriving a conclusion on the basis, of industry-cum-region basis canto be wholly, attributed to the Management. The first party ought to have placed proper materials before the Tribunal to substantiate the claim. It would have been reasonable to contend that to the extent the evidence is available only with the Management and it is within their exclusive knowledge, it is the Management's responsibility to place the material but in respect of matters not within their knowledge it is open to the first party to place the requisite material in support of their case. The Tribunal after stating that Exhs. M-2, M-3 and M-4 do not furnish satisfactory material goes on to observe that "This Gokak Mill is perhaps the oldest one in the country and most prosperous one. As such other mills cannot be compared with it."
34. It is needless to say that this is a very general statement and is not borne out by the evidence on record. The Tribunal, while negativing the contention that Gokak Mills cannot be compared with Sholapur, proceeds to compare the Gokak Mills with the mills in Bangalore. As already mentioned, the view of the Tribunal that the Gokak Mills comes nearest to Sholapur than other places nearby may be correct put the conclusion of the Tribunal that the Gokak Mills may very well be compared with the Binny Mills at Bangalore, which also employs 6,000 employees and pays 0-20 paise per point rise, and it can also be compared with the K. R. Mills, Mysore, which also pays 0-20 paise per point rise, is patently wrong, in the absence of any material relating to similarity of industries and the fact that the Binny Mills and the K. R-. Mills are not shown to be within the same region, excepting that they are within the Mysore State. The Tribunal was, therefore, in error in taking the above-mentioned mills into consideration in coming to the conclusion that the second party mills does possess the required capacity to pay the dearness allowance asked for by the employees.
35. It was contended by Sri Sule that actually the question of region-cum-industry does not arise for consideration. The point is purely one of the rises in cost of living, as indicated in the G, cost of living index, which for purposes of Gokak Mills is that of Sholapur. According to him the question will be if there has been a rise in the cost of living, what is the extent to which dearness allowance should be increased. It is submitted that round about Gokak there is no similar unit and it is difficult to determine the region and therefore the matter should be determined quite independently of the above said considerations. The procedure therefore adopted by the Tribunal is neither as Contended for by the petitioners nor as contended by the respondents.
36. The Tribunal has in paragraph 12 of the award considered the financial burden that would be imposed on the Management if the demand of the workmen is conceded. The Tribunal refers to four documents which have been filed by the Management. They are Exhs. M-5 to M-9. It is pointed out that Exh. M-5 is a statement showing the workers who are entitled to holiday with pay for the year 1965. Similarly, the statement Exh. M-6 relates to the year 1966. Exh. M-7 is a statement showing the details relating to the position of the company since the year 1954 to 1966. Exh. M-8 shows the additional burden to the company as per demand made by the first party on the basis of the strength of the workers as 5,000 workers. Exh. M-9 is a statement showing the basic wages, dearness allowance, etc., paid to the employees of the second party during the year 1950, 1959, 1960, 1961, 1962 and May 1967. It is pointed out by Sri A. B. Mariappa that it is on the basis of Exhs. M-5 and M-6 that calculations have been made and the actual burden for the years 1965 and 1966 would be Rs. 7,69,920 and 9,44,199. It is stated by the Tribunal that what is mentioned in Exh, M-8 is only an ideal burden and not the factual burden. The Tribunal states that:-- "From this one admission it is evident that no weight can be given to the statement of additional burden, shown in Exh. M-8. What is to be shown is only the actual burden, viz., the extent to which the company will feel out of pocket if the demand is conceded and this could be done only by taking into consideration the actual number of days on which the worker has worked."
37. What is most important is that in paragraph 12 the Tribunal states as follows:-- -- "I havecalculated the burden and from this it is clear that the II party witness has inflated the figure presuming that all the 6,000 workers Work during the year 1965-66 and through the six months in 1967, in fact if the actual working of each worker in 1965-66 and 1967 is taken as per Exhs. M-5 and M-6, the total burden for the year 1965 will be about 7 lakhsas against 20 lakha shown by the witness. This burden is negligible if one takes the profits made by the company for the year 1965 which is Rs. 31,36,155."
38. It is very seriously contended for the Management that this conclusion is totally unsustainable and prima facle wrong. Jo first contended that there is nothing to show what calculation has been made by the Tribunal and if so on what basis it has made the calculations. We do not find any material on record, and the respondents have not been able to show to us any calculations made by the Tribunal. But as already, stated Sri Mariyappa 'pointed out that the first party made calculations on the basis of Exhs. M-5 and M-6 and possibly it is that which the Tribunal adopts. As stated already, Exhs. M=5 and M-6 do not give the figures of actual number of workers working permanently; but merely the number of permanent hands who worked during 1965 and 1966 and entitled to holidays with pay. Therefore, any calculation made on the basis that the figures mentioned therein represent the total number of workmen of the Mills would not give a correct picture of the burden. It is pro--ceeding on this basis, that the first party state, in a statement of calculations marked Exh. H in this Writ Petition that the burden for the year 1965 would be Rs.
39. '1,59,920 rind for the year 1966 it would be Rs. 9,44,189. On the other hand the Management has given the figures of the extra burden for the years 1965, 1966, and 1967 as Rs. 20,44,437, Rs. 23,93,250 and Rs. 26,95,000 respectively as can be seen from Exh. M-8. Realising the error in proceeding on the basis of Exhs. M-5 and M-6, both the parties before us gave Memos of Calculation. According to the petitioner the total- burden will be Rs. 21,03,519 taking the number of workmen at 4,000 per year, In the Memo of Calculations filed by the respondents, taking the average attendance as 4,000 and the average number of days as 24 and taking the rise over the basic No. 73, the additional burden would be Rs. 7,66,940 for 1965 and for 1966 it would be Rs. 13.63 lakhs. For 1967 it would be Rs. 15.72 lakhs. The parties have also given a statement of the resulting position if the net profits are taken as mentioned in the balance-sheets. The first party says that there will be a surplus even if 8 per cent is allowed, on the capital for all the three years, while the Management has submitted a Memo of Calculations showing that in the year 1965 there would be a loss, while in 1966 and 1967 there will be a small surplus. But, the petitioner contends that provision should be made for payment of tax, rehabilitation, payment of bonus, contribution towards provident fund, E. S. h. contribution and for holidays with pay. It is also submitted that as observed by the Supreme Court in the case Ahmedabad Mill-owners' Association v. Textile Labour Association ((1965)28 FJ R 15):-- "A broad and overall view of the financial position of the employer must be taken into account and attempt, should always be made to reconcile the natural and just claims of the employees for a fair and higher wage with the capacity of the employer to pay it ; and, in determining such capacity, allowance must be made for a legitimate desire of the employer to make a reasonable profit. In this connection, it may also be permissible to take into account the extent of the rise in price-structure which may result from the fixation of a wage --structure, and the reasonableness of the additional burden which may thereby be imposed upon the consumer. That is one aspect of the matter which is relevant."
40. It is complained that this factor has been ignored by the Tribunal. Further, the parties are at issue as to whether provision should be made for E. S. I. contribution or not. A perusal of the chart Exh. M-7 placed by the Management before the Tribunal indicates that the paid up capital in 1954 was Rs 48,81,000 sod it has risen to Rs. 87,85,80U by 1966. The production has increased and the gross sales have also increased. The statement in the award that it is only in 1965 that the profits of the company has decreased, while in all the years prior to 1965, the gross profits was roughly Rs. 60 lakhs, each year is partially correct. A perusal of Exh. M-7 indicates that in the year 1959 there has been a loss of Rs. 5.20 lakhs. Therefore the statement of the Tribunal is obviously wrong unless it be that we have to confine our attention only for the years 1961 to 1965. In any event it is clear from the Memo of Calculations 'filed by the parties that the conclusion of the Tribunal that "there can be no two opinions that the burden on account of the additional dearness allowance to be paid will not be more than 7 to 8 lakhs of rupees per year on an average and this is nothing when compared to the profits made by the company each year" (sic.) is neither according to the calculation of the Management nor according to the calculations made by the Tribunal. It is not possible to make out on what basis the Tribunal arrived at this conclusion. It appears to us that on the question of financial burden the Tribunal ought to have bestowed more care and attention, especially in view of the fact that the financial implications of enhancement of the dearness allowance is of a considerable magnitude.
41. The learned counsel have cited before us numerous decisions enunciating the principles that should guide the Tribunal in dealing with the claim for fixation of wages or dearness allowance, including a recent pronouncement dated 16th September 1968, of the Supreme Court in Civil Appeal No. 811 of 866: Bengal Chemical & Pharmaceutical Works Ltd. v. Their Workmen ((1968) 35 F J R 337). Some decisions have also been cited to show as to whether gross profits should be taken into consideration or net profits should be taken into consideration in assessing the correct financial burden. Some decisions bear on the question as to the extent of neutralisation that is permissible. It appears to us unnecessary to refer to all these decision, as it comes up for consideration only while fixing the actual quantum of increase fn dearness allowance that should be fixed. We cannot in these proceedings come to any definite conclusions and substitute them for those of the Tribunal.
42. This is in conformity with the observations of the Supreme Court in T. C. Basappa v. T. Nagappa (A IR 1954 SC 440) viz:-- "The second essential feature of a writ of 'certiorari' is that the control which is exercised through it over judicial or quasi----judicial tribunals or bodies is not in an appellate but supervisory capacity.
43. In granting a writ of 'certiorari' the superior Court does not exercise the powers of an appellate tribunal. It does not review or reweigh the evidence upon which the determination of the inferior tribunal purports to be based. It demolishes the order which it considers to be without jurisdiction or palpably erroneous but does not substi--tute its own views for those of the inferior tribunal. The offending order or proceeding so to say is put out of the way as one which should not be used to the detriment of any person; vide per Lord Cairns in Walsall's Overseers v. L. & N. W. Rly. Co. ((1879) 4 A C 30).
44. In view of our conclusion that the Tribunal has acted illegally in the exercise of its jurisdiction, ignoring the principles that should govern the decision on the dispute that has arisen before it, and the award of the Tribunal suffers from errors' apparent on the face of the record, we are constrained to set aside the, same.
45. We may, however,, mention that the parties had to take us through several details pertaining to the case to show that the conclusion arrived at by the Tribunal was not borne out by the evidence on the record or by the oral evidence before it, and the other party to justify the correctness of the award. On a close examination of the several details offered by either of the parties and the principles of law brought to our notice, we find that the conclusions of the Tribunal are erroneous as they do not conform to the principles of law enunciated by the Supreme Court.
46. The question as to whether the award should be given effect to from 1st January 1965, also depends upon the financial implications involved depending on the quantum of dearness allowance which may be granted or may not be granted. Therefore, the direction of the Tribunal that the award shall be given effect to from 1st January 19--5, cannot also be left to stand. Hence, we set aside the entire award and remit it back to the Industrial Tribunal to make a fresh award, keeping in mind the observations made by us.
47. We further direct that before making the award, the Tribunal will give the parties an opportunity to place such materials as they desire to place before it.
48. In the result, the writ petition is allowed; but, in the circumstances of the case we direct each party shall bear his own costs.