WORKMEN OF ORIENT PAPER MILLS LTD. BRAJRAJNAGAR versus M/S. ORIENT PAPER MILLS LTD.

Citation: [1969] 1 S.C.R. 666 · Decided: 13-08-1968 · Supreme Court of India · Bench: J.M. SHELAT · Disposal: Case Partly allowed

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Judgment (excerpt)

• 666 
WORKMEN OF ORIENT PAPER MILI.S LTD. 
BRAJRAJNAGAR 
v. 
M/S. ORIENT PAPER MILLS LTD. 
August 13, 1968 
[J. M. SHELA°!', V. BHARGAVA Ai':D C. A. VAIDIALINGAM, JJ.J 
Industrial Dispute-Minimum 
Wag~s-Industry.cum·Renion 
princi· 
pie-Applicability whe11 there H'ere no conzparable industries in the satne 
line of business-Linking of dearness allowance elen1ent of minimuni 
wages u·ith price index-If obligatory-Industrial 
Tribunal-Duty 
to 
decide dispute ll.S referred. 
An industrial dispute regarding fixation of wages and bonus, between 
the respondent-paper mills and il• workmen, the appellants, was referred 
to the Industrial Tribunal in October, 1962, and the reference included 
a dispute about bonus payable for the years 1962-63 and 1963-64. The 
Tribuoal held: (1) that there were in the regioo no other concerns in 
lhe same line of business v.·hich could he compa-red 
\vith 
the respondent 
hut that there were three colliericc;1 a steel plant, a cement factory and an 
aluminium company in the region \vhich were comparable with the res· 
pondf:'nt, that as the minimum wage in those industries v.·hich was about 
Rs. 95 was above that of the respondent, a revision of the minimum wage 
in the respondent-mills was justified, that such minimum wage sbould be 
fixed for the price index prevailing at the time of the award taking 100 
as the basic index for the year 1939, and that on that basis, 
the basic 
wage and dearness allowance should be Rs. 73, and that Rs. 11 was pay-
able as production bonus; ( 2) that the dearness allo\Vancc clement need 
not be linked to the price index, but that wage should be fixed at the pre-
vailing price index leaving it to the workmen to ask for increase in mini· 
mum wage on any further rise in p'ricc index; (3) that the revised wages 
were payable with effect from 13th December, 1962; (4) that the three 
clements of basic wage, dearness allowance. and producHon bonus which 
make up the total minimum wage packet of Rs, 84 (Rs. 73 +Rs. 11) 
should be in the proportion of 3 : 3 : 1, and that profit bonus was pay-
able at three months' basic wage. 
The proportion of 3 : 3 : 1 was fixed 
by the Tribunal, because. under an agreement of 1959 the management 
and v..·ork.mcn accepted that proportion by mutual consent. 
On the basis 
of that agreement, the Tribunal also held that; (5) casual workers should 
not be equated to pcnnancnt Y/orkcrs for purpose of minimum \vages, and 
that casual and bad/i workers should not be allowed bonus on the same 
hasis as the permanent workers; 
(6) The appellant~ also claimed before 
the Trihunal 6 months' basic \\'age instead 
of 3 n1onths' 
ba\ic 
wage, 
which Yl-'as being paid by the respondent, on the asswnption that certain 
derical staff Y:cre being paid as bonus 3 months' consolidated wage COD· 
sisting of basic \\'age and dearness atlov.·ance; but the Tribunal rejected 
the claim. 
Jn ap!'C"l to this Court. 
HELD : ( 1) This Court laid down in Frc11c/J Motor Car Co. Ltd. v. 
Its Workmc11. [1963] Supp. 2 S.C.R. 16, that where there is no concern 
in th-e same industry in the region comparable with the ~nccrn in wh.ich 
\\'ages have to be fixed, greater emphasis should be l:ud on the reg10.n 
part of the industry-cunt-region principle. 
To give. ~ult effect t? thtS 
rule the Tribunal should have proceeded to fix the m1n1mum wage 1n the 
respondent-mills on the basis of the average minimum \vage prevailing 
-
A 
B 
c 
D 
E 
F 
G 
H 
• 
A 
B 
c 
D 
E 
F 
G 
H 
WORKMEN v. ORIENT PAPER MILLS (Bhargava, J.) 
667 
in the other industries in that region. The respondent 'Yas not p~o~ding 
any amenitk~s which should be ~a.ken into. account in fixing the ~um 
wage, different from the amen1tJ.es provided by those c~ncerns in the 
region which were being compared. Therefore, 
the Tribunal. should 
have fixed the minimum wage packet at Rs. 95 per mensem which was 
the average wage pP:!vailing in. all thnse _concerns a~d should not have 
fixed the wages on an entirely different basis. [671 F-H; 672 G-H] 
(2) The Industrial Tribunal has the discretion, in appropriate cases, 
of making a direction linking the dearness allowa.i:ce el~me~t of a w!lge 
to the price index, or to fix the wage at the preva1hng p'r1ce mde~ leavu;ig 
the labour to raise a fresh demand and, if necessary, a fresh 1ndustr1al 
dispute for further rise in wages, in case there is marked variation in the 
pric;, index and the wage fixed becomes outdated; and 
therefore. 
the 
Tribunal was not w

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