MUIR MILLS CO. LTD., KANPUR versus ITS WORKMEN.

Citation: [1960] 3 S.C.R. 488 · Decided: 07-04-1960 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed

Judgment (excerpt)

April 7• 
488 
.i 
SUPREME COURT REPORTS 
[1960] 
MUIR MILLS CO. LTD., KANPUR 
v. 
ITS WORKMEN. 
( P. B. GAJENDRAGADKAR, K. N. WANOHOO and 
K. c. DAS GUPTA, JJ.) 
Industr·ial Dispute-Wage structure-Production bont<s and 
incentive bonus, if could be taken into consideration when fixing new 
basic wage-Intention of Government if can be interpreted to prejztdicc 
interest of Labour, Industry and Country-U.P. Industrial Disputes 
Act, r947 (U. P. 28 of r947). 
The appellant paid wages to its workmen in the Carding 
Department on piece rate basis and in addition, the workmen 
were entitled to receive further emoluments if their production 
exceeded a certain norm. The right to receive these additional 
emoluments had become a part of the terms of service of these. 
workmen. In 1948 the Government of Uttar Pradesh with a view 
to make it obligatory on the employers in the different industries 
to keep the wages of workmen at a certain level, by its order under 
the provisions of s. 3 of the U.P. Industrial Disputes Act, 1947, 
laid down the standard of basic wages and dearness allowance 
for different industries in the provinGe. 
The appellant in giving 
effect to the said order of the Government for introducing the 
new piece rate raised the fixed piece rate but stopped the system 
of paying additional emoluments, as it thought itself to be justi-
fied, in taking into consideration for this purpose the amounts 
actually earned by the workers including what had been earned 
as additional emoluments which were being paid to the workmen 
by \Vay of productive and incentive bonuses. ]'he \Vork1nen's 
case was that by stopping the additional emoluments which they 
used to get on the basis of better production by extra efforts the 
employer had in fact reduced the wages to which they were 
entitled and the fact that higher piece rates were introduced did 
not affect the question. The question was whether the Government 
order required or authorised the company to_include the incentive 
bonus and the production bonus which they had been so long 
paying in fixing the new piece rate for the purpose of compliance 
\vith the directions given in the Government order as regards 
the basic wages : 
• 
Held, that the Government order did not require or justify 
the employer including the production and incentive bonuses in 
the calculation of the rates of the basic wage of the workers and 
consequently the Government order did not have the effect of 
absolving the company from the duty of continuing to pay the 
production and incentive bonuses to workmen as before : 
Held, further, that the concept of "basic" is not peculiar to 
wages alone; it is what is normally allowable to all, irrespective 
of special claims and is also ordinarily understood to mean that 
part of the price of labour, which the employer must pay to all 
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3 S.C.R. SUPREME COURT REPORTS 
489 
workmen belonging to all categories. The phrase is used ordi-
z960 
narily in marked contra.distinction to " dearness allowance " the 
quantum of which varies from.time to time, in accordance with Muir Mills Co. Ltd. 
the rise or fall in the cost of living. Thus understood " basic 
v. 
wage" never includes the additional emoluments which some 
Its Workmen 
.., 
workmen may earn, on the basis of a system of bonuses related 
to the production. 
Titaghur Paper Mills Co. Ltd. v. Their Workmen, [1959] 
Supp. (2) S.C.R. 1012, referred tp . 
CIVIL APPELLATE JURISDICTION:. Civil Appeal 
No. 305 of 1959. 
Appeal by special leave from the Decision dated 
January 10, 1957, of the Labour Appellate Tribunal 
of India, Bombay, in Appeal No. III-346 of 1955. 
G. S. Pathak, S. P. Sinha and K. K. Sinha for G. N. 
Dikshit, for the appellants. 
Maqbool Ahmad Khan (General Secretary of the 
Union), fqr respondent No. 1. 
J.P. Goyal, for respondent No. 2. 
, 
1960. April 7. The Judgment of the Court was 
delivered by 
DAS GUPTA, J.-This appeal by the employer, the 
Das Gupta J. 
Muir Mills Co., Ltd., Kanpur, is against the decision 
of the Labour Appella'te Tribunal of India, Bombay, 
modifying an award of the Adjudicator, Kanpur, in a 
reference made by the Government of. U. P. under the 
provisions of ss. 3, 4 and 8 of the Industrial Disputes 
Act, 1947. The matter in dispute referred was originally 
set out in these terms :-
"Whether the employers have wrongfully and/or 
unjustifi11>bly reduced the wages of their workmen of 
Carding Department, given in the annexure? If s

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