AMRITSAR RA YON & SILK MILLS versus THEIR WORKMEN

Citation: [1963] 3 S.C.R. 558 · Decided: 02-08-1962 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Directions issued

Judgment (excerpt)

558 
SUPREME COURT REPORTS [1963] 
AMRITSAR RA YON & SILK MILLS 
V• 
THEIR WORKMJtN 
(P. B. GAJENDRAGADKAR, K. C. DAs Gl'l'.PTA and 
J. R. MUDHOLKAR, JJ.) 
Inaustrial Dispute-Gratuity scheme, Framing of-Valiaitg 
-Employer's .financinl position --Amount of gratuity-Ceiling, if 
and when should be pl~ceil-Tribunal's determination to depend 
on relevant facts. 
The present appeal arises out of an industrial dispute 
between the appellant anrl the· respondents. The Industrial 
Tribunal gave an award and the appellant filed an appeal to 
this Court by way of special leave. 
The main contention of the appellant was that no case 
had been before the tribunal for the framing of a gratuity 
scheme. 
It was further urged that ~ven if a gratuity scheme 
had to be framed the tribunal was in error in not placing any 
ceiling on the amount of gratuitv payable to the employees. 
The third point raised was that one month's basic wages which 
had been provided by the scheme was excessive and it should 
be reduced to 15 days' basic wages. 
Bela, that having regard to the financial position of the 
app•llant the framing of the gratuity scheme wao justified. As . 
a general rule, where is no provision for superannuation and 
gratuity is paid at a fairly reasonable rate a ceiling should be 
placed on the amount of gratuity payable under the scheme. 
Even though gratuity schemes framed in the same indu~try in 
the same region shonld not disclose radical or violent differ· 
ences the rate of gratuity whicl-> should be av.•arded in a parti-
cular case will depend on the facts of that case. 
C:rvIL APPELLATE JURISDICTION: Civil Appeal 
No. 394 of 1961. 
Appeal by special leave from the Award 
dated November 6, l 960, of the Industrial Tribunal, 
Punjab, in Reference No. 43 of 1958. 
M· O. Setalvad! Attorney-General for 
India~ 
> ' 
3 S.C.R. 
SUPR.EME COURT REPORTS 
559 
.S. K. Kapur, Bishamhher Lal, B. N. Kripal and 
K. K. Jain, for the appellant. 
Janardan Sharma, for the respondents. 
1962. August, 2; The Judgment of the Court 
was delivered by 
GAJENDRAGADKA.R, J.- This appeal arises 
out of an industrial dhpute between the appell-
ant Amritsar Rayon & Silk Mills and its workmen. 
The· dispute originally related to seven demands 
made by the respondents against the appellant and 
these 
seven 
demands were referred by the 
Punjab Government for industrial adjudication to 
the Industrial Tribunal, Jullundur under section 
lO(l){d) of the Industrial Disputes Act, 19'17. 
The Tribunal has made its a.ward in respect of 
these demands. In the present appeal, which has 
been brought to this Court by special leave, we 
are concerned with the award in so for as it deals 
with the respondents, claim for a gratuity scheme. 
The appellant urged that no case had been made 
out for the framing of a gratuity scheme. This 
plea hau been rejected by the Tribunal and a gra-
tuity scheme has been framed. · It is the propriety 
and the validity of this scheme which are challenged 
before us by Mr, Kapoor on behalf of the appel-
lant in this case. 
The scheme framed by the Tribunal reads 
thtis:-
l ' 
(1) In case of death of an employee while 
he is in the service of the concern on his 
becoming inca.pable of serving further due 
to physical or mental disability. One 
month's basic wages for each year of hiA 
service. 
r962 
Amritsar. f11J,14n alid 
Silk .Iii/I• 
-v. 
Their Workmen 
Gajendrngadl. ar J. 
1962 
·Amrilsaf'·Ra1on and 
Sitk·Mills 
v. 
Their Workmen 
Gajtndragadkar J, 
II60 
SUPREME OOURT REPORTS [1963] 
In case of death, the .gratuity will ;be 
. ._. 
payable to .the heirs or assigµs of the 
deceased workmen. 
(2) On termination of an employee's service 
·by the concern .after he bas .put in five 
year's service -Half month's· basic wages 
for each year. of his service. 
... 
(3) No gratuity would be payable to an emp· 
loyee who resigns•his job but if he has 
served for fifteen years continuously and 
is rendered unfit to serve further by old 
• age or protarcted ill •health, be shall be 
given gratuity calculated at the rate of 
onti month's ·basic wages for each comp· 
.,. 
leted year of bis service. 
(4) No gratuity would be payable to an emp-
loyee who is dismissed· for misconduct. 
In rejecting the appellant's contention that no 
scheme should be framed, the Tribunal has found 
that the appellant which was started in 1934 is 
r,:-
the biggest Textile 
Mills in Amritsar and its 
·~ 
career so far has been one of success all along the 
line

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