LexMANAGEMENT, GHAZIABAD ENGINEERING CO (P) LTD. versus ITS WORKMEN
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MANAGEMENT, GHAZIABAD ENGINEERING CO (P)
LID.
v.
ITS WORKMEN
July 18, 1969
[J. C. SHAH AND G. K. MITTER, JJ. J
Industrial DiJpute-Gratui1y-Sche1ne framed relating gratuity to con-
solidated wage not to basic
wcge-Princip/es
governiflg
fra1ninR
of
scheme-Dearness allowance at flat rare-Practice--Court's jurisdiction
under Art. 136-Jnterf('rence 1..,·ith findings of Tribunal.
The Industrial Tribunal on a reference of the disputes between the
appellant comp:uty and its workmen framed a gratuity scheme. -;be gratuity
payable to a workman on termination of employment was to be computed
on the total wage packet of the workman includin~ dearness allowance
which he had last drav.·n.
1·he tribunal also av.·ardcd dearness allowance
at a . flat uniform rate for every l 0 point rise in the cost of Consumer
Price Index.
The Tribun<1l found that the financial position of the com-
pany was sound and it had the capacity to bear the additional bu'rden. In
appeal, thi, Court
HELD : ( i) The usual pattern in fixing gratuity is to relate it to the
basic wage or salary and not to consolidated wage. A departure may be
made from the normal rule, if there by some strong evidence or precedent
in the industry, or conduct of the employer or other exceptional circum-
stances to justify that course.
!n the absence of such evidence, gratuity
should be related to the basic wage and not to the
consolidated
wage
packet. [627 DJ
In the present case it v.·as found that !he financial posilion of the com-
pany \\·as sound but there was no evidence that the company \\'as "ma!Ung
abnormally high profits", nOr \\'as there any evidence that in its sister con-
cern or in other engineering concerns in the region there was a practice
of 3\\·arding gr-:l!Uity related to consolidated wages.
Mis. British Paints (India)
Ltd. v. Its Workmen,
[1966] 2 S.C.R.
523, May & Baker (lndic.) Ud. v. Their Workmen, [1961] II L.L.J. 94,
British India Corporation v, The Workmen, (1965) Vol. IO Factory Law
Reports 244, Hindustan Antibiotics
Ltd. v. Their Workmen,
[1967] I.
L.L.J. I 14, The Remington Rand of India Ltd. v. The Workmen. [19681
1 S.C.R. 164. and Delhi Cloth & General Mills Co. Ltd.'" The Workmen
& Ors. [1969j 2 S.C.R. 307, referred to.
(ii) The rise in dearness allo,vancc \\'as not related to the quantum of
ba<>ic v.·a1te or consolidated \\'age; it was a flat uniform rate applicable to
everv v.·orkman.
Therefore, the rise \\'Ould not operate to give the v.·ork-
man: besides the additional dearness allo\\·ance, a percentage increase in
dearness allo\l;ance already paid as part of the consolidated ,,·age. r625 E-Fl
A
B
c
D
E
F
G
(iii) The Tribunal, on appreciation of evidence found that the finan-
H
cial position of the company \\'as sound.
Assuminc that the Trihunal was
governed by the strict rules prescribed by the Evidence Act, sitting in
appeal with Special Leave Ibis Court \l/OU1d not be justified in interfering
-·
A
B
c
D
E
F
GHAZ!ABAD BNG!N. CO. V. WORKMEN (Shah, !.)
623
··.vith the finding cf the Tribunal even if it -be open to the criticism that
a part of the evidence relied UP9fl was not in law relevant. [624 F]
.\
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1408 of
1966.
Appeal by special leave from the Award dated May 19, 1965
February 23, 1966 of the Addi. Industrial Tribunal, Delhi in
Industrial Dispute No. 109 of 1965.
H. R. Gokhale, G. L. Sanghi and K. P. Gupta, for the. appel-
lant.
Urmila Kapur and 'Bh~fan Ramrakhiani, for the respondents.
The Judgment· qf the Court was delivered by
.
'
. )
Shah, J. By,9rder February 24, 1965 the C:hief Commis-
sioner of Delhi refei:red for adjudication, industrial disputes bet-
ween the' appellant company a.nd its workmen relating to dear-
ness allowance and introduction· of a scheme of gratuity for the
benefit of the workmen. The Industrial Tribunal, Delhi framed
the following "gratuity scheme" : ·
(1) On death or retire1nent on attaining the age of One month's wages for each
superannuation or on becoming mentally or
year of service or part there-
physically unfit for further service.
.- . .
of in excess of six months
subject to a maximum of 15
months' wages. In case of
death of employee the gra-
tuity shall be payable to his
nominee or if there is no
nominee to his legal . heirs.
(2) On termination after five years' service for any
cause whatsoever except by way of retrench-
ment or resignation.
(3) On resignatExcerpt shown. Read the full judgment & AI analysis in Lexace.