THE SILK AND ART SILK MILLS' ASSOCIATION LTD. versus MILL MAZDOOR SABHA

Citation: [1973] 1 S.C.R. 277 · Decided: 19-04-1972 · Supreme Court of India · Bench: C.A. VAIDYIALINGAM · Disposal: Dismissed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

277 
A 
THE SILK AND ART SILK MILLS' ASSOCIATION, LTD. 
B 
c 
D 
E 
F 
G 
H 
v. 
MILL MAZDOOR SABHA 
April 19, 1972 
[C. A. VAIDIALINGAM, 
P. JAGANMOHAN REDDY AND 
K. K. MATHEW, JJ.) 
ltulustri(ll Dispute-Dearness allowance-Neutralization 
of 
cost oj -living-Financial capacity~ deter1nination of-Relevant 
for-Principle of region-cum-industry, application of. 
rise 
in 
materials 
T.he appellant Association Was recognised under section 27 read with 
section 3(23) of the Bombay Industrial Relations Act, 1946 as the Asso-
ciation of employers in Silk and Art Silk Textile Industry within tJu, local 
area of Greater Bombay. The respondent Sabha represented the workmen 
in the Industry. By a supplementary award dated October 15, 1971 the 
Industrial Court modified an existing award of the Industrial. Court of 
Maharashtra, Bombay, elated April 25, 1962 by directing with retrospec-
tive effect from January 1, 1971 that the employee• in Silk and Art Silk 
Industry who were concerned in the dispute shall be 
granted 
d~arness 
allowance at the rate of 99 per cent 
neutralization of the rise in 
the 
Bombay Consumer Price Index I 06 (old series) on the basis of the mini-
mum wage of Rs. 30/' per month of 26 working days. 
The appellant 
Association and one of the Silk Mills appealed. 
HELD : The award did not suffer from any infirmity. 
(i) The Association represented 55 units of employers and out of 
these only 28 produced their balance-sheets and profit and loss accounts. 
The other 27 units did not supply any materials with respect to their 
financial capacity but agreed to abide· by the decision of the Industrial 
Court on the basis of the materials furnished by the 28 units. ·The award 
in se far as it concerned these 28 units proceeded on the basis of their 
financial capacity as judged from accounts 
produced by them and 
the 
materials in the case. 
There is no substance in the complaint that any 
adverse inference had been drawn against that 28 units on account of non-
production of materials by others. [283·H) 
(iiJ The contention that the position of the industry was not stable 
and that its prospects were bleak could not be accepted. 
A oroad and 
overall view of the financial position of the employer units was taken into 
account by the Industrial Court and it had tried to reconcile the natural 
and just claims of the employees for a higher rate of dearness allowance 
with the capacity of the employer to pay it and in that process it had 
nlade allowance for the legitimate desire of the en1ployer to make reason-
nhle profits. 
What is really material in assessing the financial capacity 
of the employer units in this context is the extent of gross profits n1ade 
bv them. On the basis of exhibit U.9 1Mhich was an analysis of the balance 
sheets and. profit and loss accounts of the 28 units, the Court found that 
the 28 mills had been making good profits and that, on an average, the 
profit would work out at 40 and odd per cent of the capital. There was 
some decline in the profits made during the years 1966, 1967 and 1968 
but. the Court found that the industry was rallying round in 1970. [286-C] 
278 
SUPREME COURT REPORTS 
Ahmedabad Mill Owners' Association, etc. v. The Textile Labour Asso-
A 
.ciation, [19661 1 S.C.R. 382 at p. 426 and Unichem Laboratones Ltd. 
v. Their Workmen, Civil Appeals No. 1091-93 of 1971., 
decided 
on 
.24-2-1971, referred to. 
(iii) No evidence had been adduced to show what exactly had been the 
effect on the industry of the enhancement in excise duty. Without further 
evidence it was not possible to draw an inference that the sale of the 
products had been adversely 
affected. 
Moreover 
the economic 
inci-
B 
.dence on the excise duty had been passed on to the consumer and tho em-
ployer-unit dicl not have to bear any additional burden on account of the 
levy. [286·H] 
· 
(iv) Exhibit U.8 is a comparative Table showing the minimum basic 
waaes and dearness allowance paid in other industries in the region like 
the engineering, pharmaceuticals, etc. 
The Court relied upon it only to 
show the trend in the region. The Court also relied upon the report of 
C 
the Norms Committee which stated that the trend for the last decade in 
industrial adjud!cation as well as in settlemonts and awards, was to allow 
100 per cent neutralization in the case of lowest-paid employees. 
The 
Court was of the yiew that if 80 per cent neutralization could be allowed 
in the industry under the settlemer. '

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