WORKMEN OF GUJARAT ELECTRICITY BOARD, BARODA versus THE GUJARAT ELECTRICITY BOARD, BARODA

Citation: [1969] 3 S.C.R. 174 · Decided: 19-12-1968 · Supreme Court of India · Bench: J.M. SHELAT · Disposal: Dismissed

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Judgment (excerpt)

WORKMEN OF GUJARAT ELECl'RICITY BOARD, 
A 
BARODA 
v. 
THE GUJARAT ELECTRICITY BOARD, BARODA 
December 19, 1968 
[J. M. SHELAT, V. BHARGAVA AND C. A, VAIDIALINGAM, JJ,] 
. Industrial dispute-Capacity of employer to pay increased remuner,,. 
t1on relevant. if demands for more than 
mJnimum wagea-Comparisons 
lt'ith remuneration paid by other employers---When relevant-Public tee· 
tor undertaking to produce and supply electricity and prepare and evecute 
development schemes for supply to new areas-If profits to be oolculated 
taking account of all its activities or only commercial activities. 
Over 9,000 employees of the Respondent Board, represented by seven 
Unions, demanded an increase in the dearness allowance payable to them, 
the payment of gratuity to some employees, and 
the 
calculation 
of 
pension payable to other employees after adding 50% of the . dearness 
allowance. Six of the Unions 
representing the 
employees 
amicably 
settled the disputes with the Board which granted increases in dearness 
allowance on the other demands being given up. The seventh 
Union 
declined to accept the settlement and the dispute was eventually referred 
for adjudication by the Industrial Tribunal. Before the Tribunal took 
up the reference, all except 466 of the employees individually accepted 
the settlement. 
At the hearing of the reference it was contended by the remaining 
omployees through the seventh Union that the total wage packet including 
the dearness allowance claimed , by them would only satisfy the require-
ment of a minimum wage and the Board's capacity to pay the increases 
demanded was, therefore, irrelevant; furthermore, although 
the 
Board 
'va:'l. an industry in the public sector, it must also be made to pay wages 
on the same basis as private sector employers; two electric supply com-
panies in the area were paying wages, which were much higher and there 
was no justification for refusing the demand for additional dearness al-
lowance which would place the employees of the Board on par with the 
employees of those companies. 
The Tribunal in its award rejected all the workmen's demands. It 
found that the demand for increased dearness allowance was not confined 
to achieving a minimum wage but as 6 result of its acceptance the wages 
would he above the minimum wage. 
The Tribunal also found that the 
Board having inherited an accumulated deficit of over Rs. 2 crores from 
its predecessor, the Bombay State 
Electricity Board, having 
sustained 
heavy losses in its \vorking and having undertaken a further liability to 
pay increased dearness allowance, it had no capacity to undertake 
the 
further burden of paying about Rs. 49 lakhs per year as increased dear-
ness allowance or to meet the other demands. The Tribunal held that the 
position in the other two electric supply companies was not comparable 
\Vith the Board. 
In appeal to this Court against the award it was contended inter alia, 
that the Tribunal was wron~ in judl!ing the capacity of the Board after 
takin~ into account the deficit of Rs. 2 crores which it had inherited 
from its predecessor; and that the financial capacity of the Board should 
174 
B 
c 
D 
E 
F 
G 
H 
WORKMEN v. GUJARAT ELECTY. BOARD 
175 
A 
have been judged only on the basis of its commercial undertakiiig ex· 
eluding the activities of the Board which were in the nature of national 
duties. 
B 
c 
D 
E 
F 
G 
HELD : The Tribunal had rightly rejected the 
demands of 
the 
appellants. 
(i) As the appellants had failed to show that they would not be 
receiving the minimum .wage with their basic pay and the increased dear-
ness allowance otfered by the Board, the financial capacity of the Boar<.' 
for acceding to the demands made became a relevant consideration. 
Hindustan Antibiotics Ltd. v. The Workmen & Otherr, (1967] I S.C.R. 
652 and The Hindustan Tlmts Ltd, v. Their Workmen, (1964] I S.C.R. 
234 referred to. 
Although the deficit inherited by the Board 
from its predecessor 
could not be treated as o revenue loss for determining the Board's financial 
capacity and was in the nature of a capital loss, even this loss could 
not be completely ignored. Apart from this, it was clear on the facts 
that during three years after its formation the Board had incurred heavy 
losses of about Rs. 110 !aldu and it did not, therefore, have the capacity 
of bearing the additional financial burden invoked in meeting the ap-
pellants' demands. (179 D-F; 180 E] 
(ii) When the Board was co

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