BENGAL CHEMICAL & PHARMACEUTICAL WORKS LTD. versus ITS WORKMEN

Citation: [1969] 2 S.C.R. 113 · Decided: 16-09-1968 · Supreme Court of India · Bench: J.M. SHELAT · Disposal: Disposed off

Cited by 6 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

"I ~· 
A 
BENGAL CHEMICAL & PHARMACEUTICAL WORKS LTD. 
B 
c 
) 
0 
E 
• • 
F 
• 
• 
G 
H 
v. 
ITS WORKMEN 
September 16, 1968 
(J. M. SHELAT, V. BHARGAVA AND C. A. VAIDIAL!NGAM, JJ.J 
Industrial Dispute-Revision of dearness 
allowance-Gratuity-Age 
of superannuation-Principle for. 
In 1954 the Bengal Chemical and Pharmaceutical Works Ltd. entered 
into an agreement with its workmen about dearness allowance. 
In 1957 
dearness a!lowanee was again fixed by an award of the Fifth Industrial 
Tribunal, Bengal on the basis of the cost of living index in May 1957 
which stood at 400.6. 
The company as well as the workmen ·appealed 
against the said award to this Court. 
The company's appeal was dismiss-
ed and the workmen did not press their appeal. 
On January 6, 
1962 
there was a fresh settlement between the company and the 
workmen 
whereby dearness allowance was raised by Rs. 3. 
On a fresh industrial 
dispute arising in May 1962 the State Govermnent made a reference to 
the Industrial Tribunal which gave its award on January 14, 1965. In 
respect of dearness allowance the award provided a sliding sqale for an 
increase or decrease of Re. 11. for rise or fall of five points in the cost 
of living index, 
with 
retrosp::ctive operation from November 5, 1963 
i.e. the date when the reference was made. 
It further made certain 
modifications in the company's gratuity scheme and raised the age of 
superannuation from 55 years to 58. The company as well as the work-
men appealed to this Court against the Tribunal's award. 
HELD: (1) (i) The following broad principles relating to fixation 
of dearness allowance emerge from the earlier decisions of this Court : 1 . 
Full neutra1isation is not normally given, except to the very lowest class 
of employees, 2. 
The purpose of dearness allowance being to neutralise 
a portion of the increase in the cost of living, it should ordinarily be 
on a sliding scale and provide for an increase in the rise in the cost of 
living ·and decrease on a fall in the cost of living. 3. The basis of fixation 
of wages and dearness allowance is industry-cum-'region. 4. Employees get-
ting the same wages should get the same dearness allowance, irrespective 
of whether they arn workin.g as clerks or members of subordinate staff 
or factory workmen. 
5. The additional financial burden which a revision 
of wage structure or dearnes·s allowance would imoose upon an employer, 
and his ability to bear such burden, are very material and relevant fac-
tors to be taken into account. [123 B-El 
Clerks of Calcutta Tramways v. Calcutta Tramways Co. Ltd. [1956] 
S.C.R. 772, 779, The Hindustan Times Ltd. New Delhi v. Their Workmen,. 
[1964] 1 S.C.R. 234. Greaves Cotton 
& 
Co. 
v. 
Their Workmen 
[1964] 5 S.C.R. 362, 
French 
Motor 
Car 
Co. 
Ltd. v. 
Workmen,. 
[1963] Supp. 2 S.C.R. 16, Ahmedabad Mill Owners' Association v. The 
Textile Labour Association, [1966] 1 S.C.R. 382 and Kamani Metals & 
Alloys Ltd. v. Their Workmen, [1967] 2. S.C.R. 463, referred to. 
Having regard to the above principles, in the present case, the Tri-
bunal had made a substantially correct approach in considering the claim 
for revision of dearness allowance. [123 &F] 
114 
SUPREME COURT REPORTS 
[1969] 2 S.C.R. 
(ii) The Tribunal rightly held that cl. 10 of the settlement of January 
A 
6, 1962 providing that the un.ion was not entitled to ask for a revision 
of dearness allowance before the expiry of three years, \Vas not a bar 
for entertainment of the claim. 
Its decision that in view of the rise in 
the cost of living a revision of the dearness allowance should be made 
was perfectly correct. [123 G-Hl 
(iii) The Tribunal was also justified in rejecting the contention of the 
union that the reiVision of the dearness alJowance must be made de novo, 
B 
ignoring the previous award of the Fifth Industrial Tribunal. It could 
not be lost sight of that the said awa'rd had bee11 challenged in this Court 
and tho appeals filed by the company ·as well as the workmer, were 
dismissed. [124 A-BJ 
Remington Rand of India v. Its Workmen, [1962] I L.L.J. 287 distin-
guished. 
(iv) The additional financial burden that would be thrown on the 
company by reason of the revision of dearness allo1,vance 
was 
a 
very 
material and relevant factor to be taken into account but the contention 
of the company in this respect cpuld not be considered in the absence of 
a plea in its written statement to the effect that it would not be able to 
bear the bu

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