AHMEDABAD MILL OWNERS' ASSOCIATION ETC. versus THE TEXTILE LABOUR ASSOCIATION

Citation: [1966] 1 S.C.R. 382 · Decided: 10-08-1965 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

382 
AHMEPABAD MILL OWNERS' ASSOCIATION ETC. 
A 
v. 
THE TEXTILE LABOU1t ASSOCIATION 
August 10, 1965- -- - - -
[P. B. GAJilNDRAGADKAR, C.J., K. N. '\VANCHOO, 
M. HIDAYATULLAH AND V. RAMASWAMI, JJJ 
The Bom6ay Industrial Relations Act (11 of 1947), ss. 42 and 73-
Payment of dearness allowance based on cost of living index-Principles. 
After the 2nd World War broke out the 
industrial 
employees at 
Ahmedabad, who had organised themselves as the Textile Labour Asso-
ciation (Respondent herein) raised a demand for payment of dearness 
allowance to meet the cost of living which had shot up as a -result of the 
War, and the demand became the subject-matter of arbitration and .:in 
award by the Industrial Court at Boµibay. 
As a result of petitions filed 
by the Parties· and references made to it, the Industrial Court had been 
giving directions, from time to time, regarding the payment of dearness . 
allowance awarded, on the basis of cost of living index number, 
%-1th 
1926-27 as the base year. In the Second Five Year Plan, the Planning 
Commission recommended that the series of cost of living indices should 
be revised, and accordingly, the L'libour Bureau and the Central Statistical 
Organisation of the Government of India undertook family liYing surveys 
in 1958-59. 
One of the centres chosen was Ahmedabad and the Govorn-
ment of India began ·to publish consumer price index number for the city 
of Ahmedabad from 1960 with 1960 as the b.Se year. The Government 
of India also advised the State Government to remove various anoma1ies 
~n the State series of the 'price index number and publish a new series 
linking the State series with that of Government of India, with 2.98 as the 
linking factor. 
The
1 Government of Gujarat set up an expert Committee 
to advise it on the question and. that Committee made reconlmendations 
for the removal of anomalies and also suggested 3.17 instead of 2.98 as 
the linking factor. 
In November 1963, the Government accepted the re· 
commendations for removing the anomalies and adjusted the consunler 
price index nfunber, and the appellants paid the dearness allowahce accor-
ding to the adjusted consumer price index· number under protest. In 
February 1964, the Government of Gujarat announced its decisiqn-. -~to 
adopt the linking factor at 3.17. The appellants were. ,not willing 'to pay 
dearness allowance according to the converted price in'dex number in spite 
of· a representation by the employees, and, S'6, 11ie dispute \Vas referred to 
the lndUS1trial Court under s. 73 of the Bombay Industrial Relations Act, 
1946. The Industrial Court decided th~t ihe appellants should pay dear-
ness allowance to their employees for .fhe month of March 1964 am! for 
subsequent months on the consumer price index numbers for Abmeaabad 
published by the State Government since February 1964 by using the 
index numbers in the series for Ahmedabad 
compiled by the Labour 
B'ureau at Simla, and the linking factor of 3.17 adopted for linking that 
series to the State series with the old base, and gave directiOns as to the 
manner of paying the dearness allo\vance. 
In their appeal to this Court, 
the appellants contended that : 
( i) the reference was invalid because, before making the reference to re· 
quirements of s. 42, which prescribes the procedure which has to be fol-
lowed by the employer or the eillployee if either of them wants a ch:inge 
c 
D 
E 
F 
G 
H 
A 
B 
c 
• 
D 
E 
F 
G 
H 
MILL OWNERS' ASSN. V. LABOUR 
383 
to be effected in the tenns of the existing award, had not been complied 
with; (ii) the Industrial Court erred in overruling their contention that the· 
new survey suffered from two major infirmities, (a) inadequacy of the 
sample size, and (b) impropriety of the method of inten·iew adopted _by 
the investigators; (iii) the linking factor of 3.17 was improper; and (1v) 
the Industrial Court wa• not right in coming to the conclusion that the 
additional burden which its award would impose upon the 
appetiants. 
would not be beyond their financial capacity. 
HELD : (i) The dispute must be treated as an industrial dispute, not-
withstanding the fact that s. 42 had not been complied with, and the 
Industrial Court was right in coming to the conclusion that the objection 
raised by the appellant against the competence of the reference was n1iS·· 
conceived. 
[398 F; 399 E] 
The Act is a con1prehensive piece of legislation and n1akes elaborate 
provision for the regulation of relations b

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