TATA CONSULTING ENGINEERS versus WORKMEN EMPLOYED AND VICE-VERSA

Citation: [1981] 2 S.C.R. 166 · Decided: 13-11-1980 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Dismissed

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Judgment (excerpt)

166 
A 
TATA CONSULTING ENGINEERS 
v. 
WORKMEN EMPLOYED AND VICE-VERSA 
November 13, 1980 
B 
[V. R. KRISHNA IYER, R. S. PATHAK & 0. CIUNNAPPA REDDY, JJ.J 
c 
D 
E 
Industrial disputes-Tribunal making Gn award prescribing revised grades/ 
scales of pay to different categories with retrospective effect fro1n 1st .Tanuary, 
1976-Validity of retrospectivity of the award. 
Industrial Disputes (Bonibay) Rules, 1957-Rule 31, scope of-Whether 
the clarification n1ade by the Tribunal 
prescribing that a flat 
increase of Rs. 
150/- in the category of Dra11ghtsn1en and Rs. 100!- in the case of the other 
categories payable "to cacl1 oj its 
e111pfoyl'!es" 
an1011nts to a 
supplC'rnr'nfary 
award not pennissible under Rule 31. 
Dismissing the appeals by special leave, the Court. 
}{ELD : Per Pathak, J. (Krishna Iyer and Chinnappa Reddy, JJ. concu1Ting) 
(1) Having regard to the financial capacity of M/s. Tata Consulting Engi-
neers, the appellant, and the ,material on the record and the various olher consi-
derations \~rhich prevailed with the Tribunal, the granting 
of 
revised 
wa.ge 
scales is in order. Although the V.'age scales were introduced as long ago as 
1973 they were maintained at that level except for a slight revision some tilne 
thereafter. No dearness allowance \Vas paid until the beginning of 1977 and 
the house rent allowance also was introduced about that time. 
The cost of 
living had gone on increasing from 1972 onwards and the dearness 1ilowancc 
and house rent allowances made no appreciable impact in 
neutralising 
the 
increasing cost. During all these years, the appellant had 
continued to enjoy 
increasing profits; nonetheless the en1oluments received by the workmen did not 
receive the impress of the appellant's growing prosperity. The Charter of De-
mands was presented by the Union in July, 1974 and when 
conciliation pro-
F 
ceedings failed the State Government made a reference to the Industrial Tribu-
nai in 1975. The several considerations which prevailed with the Tribunal giv-
ing retrospectivity to the revised pay scale~ and referred to by it cannot be 
ignored. [174C-G] 
G 
H 
(2) It is not a universal rule that the 
dearness allowance should in 
all 
cases be correlated with the· cost of Jiving index. 
The Tribunal, in the present 
case, considered the matter and found it sufficient and in acoorc1 \\ith justice 
that the wage sca1es should be restructured with suitable incren1ents provided 
therein. 
Jt noted that dearness allowance was being granted by !he appellant 
at 10% of the salary subject to a minimum of Rs. 50/- and house rent allow-
ance at 30% of the basic salary. 
Having regard to the not inconsiderable 
improvement in the level of the basic \vage, it observed th:i.t there v.:ould be 
a consequent increase in the dearness nllowance and 
house 
rent 
a11owance. 
In view of the increase so secured, the Tribunal rejected the "uggestion that 
a slab system ~houkl be, introduced in the dearness 
allowance or that 
there 
should be any other modification of the principle on which dearness aliowance 
V.'as being presently granted. 
Jt declared that the cumulati·,rc effect of an im-
•
. ., 
; 
• 
TATA CONSULTING ENGINEERS V. WORKMEN 
167 
proved wage structure together with dearness allowance operating on a 
slab 
system would throw an impossible burden of about Rs. 1 crore on the financial 
capacity of the appellant. 
It was open to the Tribunal to adopt the position 
which it did. If the dearness allowance is linked with the cost of living index;· 
the whole award \Vi11 have to be reopened and ,the entire basis on which it 
has been made will have to be reconsidered. The award is a composite docu~ 
ment in which the several elements of increased wage scales, larger increments, 
longer span of 20 years for earning increme·nts, dearness allowance at 10% of 
the basic wage, besides several Other benefits, have 
been 
integrated into a 
ha.lanced arrangement in keeping with what the Tribunal has found to be the 
financial capacity of the appellant. It is not possible to maintain one part of 
the award and supersede another. 
[179 E·F] 
The Hindustan Ti111es Ltd., l•./cw Del/ii v. Their Work1ne11, [1964] 1 SCR 
234, 247 and Bengal Che1nical & Phannace1t1;cal Works Linii<ed v. Its Work· 
men, [19691 2 S.C.R. 113. distinguished. 
(3) The jurisdiction given to 
the Tribunal by rule 31 of the Industrial 
Disputes (Bombay) Rules, 1957, is closely circumscribed. It is only a clerical 
mistake or e

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