SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.

Page 1 Monday, February 03, 2025

Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

1963 SCC OnLine SC 161 : (1964) 5 SCR 362 : AIR 1964 SC 689 :
(1964) 1 LLJ 342

In the Supreme Court of India

(BEFORE P.B. GAJENDRAGADKAR, K.N. WANCHOO AND K.C. DAS GUPTA, JJ.)

1 GREAVES COTTON AND CO. LTD. (IN CAs NOs.

272 AND 273 OF 1962)
2. GREAVES COTTON AND CROMPTON PARKINSON
PRIVATE LTD. (IN CAs NOs. 274 AND 275 OF
1962)
3. KENYON GREAVES PRIVATE LTD. (IN CAs NOs.
276 AND 277 OF 1962)
4. RUSTON AND HORNSBY (INDIA) PRIVATE LTD.
(IN CAs NOs. 278 TO 280 OF 1962) …
Appellants;
Versus
WORKMEN EMPLOYED BY THE APPELLANTS,
REPRESENTED BY THE GREAVES COTTON AND
ALLIED COMPANIES EMPLOYEES' UNION (IN ALL
THE APPEALS) … Respondents.
Civil Appeals Nos. 272 to 280 of 1962*, decided on November 14,
1963
Advocates who appeared in this case:
S.V. Gupte, Additional Solicitor-General of India (N.V. Phadke,
Advocate and J.B. Dadachanji, O.C. Mathur and Ravinder Narain,
Advocates of J.B. Dadachanji and Co., with him), for the Appellants (In
all the Appeals);
M.C. Setalvad, Senior Advocate (K.T. Sule, Madan G. Phadnis,
Jitendra Sharma and Janardan Sharma, Advocates, with him), for the
Respondents (In CA No. 272 of 1962);
K.T. Sule, Madan G. Phadnis, Jitendra Sharma and Janardan Sharma,
Advocates, for the Respondents (In CAs Nos. 273 to 280 of 1962).
The Judgment of the Court was delivered by
K.N. WANCHOO, J.— These nine appeals by special leave arise out of
the awards of the Industrial Tribunal, Bombay and will be dealt with
together. There were disputes between the four appellants-companies
and the respondents their workmen, which were referred for
adjudication to the Industrial Tribunal by nine reference-orders on
various dates between April to December 1959. The main dispute which
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 2 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

gave rise to the references was with respect to wages, dearness

allowance and gratuity. The references included other items also but we
are not concerned in the present appeals with those items. Of the four
companies who are the appellants before us, Greaves Cotton and Co. is
the first company and its main activity is to invest money in
manufacturing concerns. The second company is Greaves Cotton and
Crompton Parkinson Private Limited and its main business is
distribution of the products of a manufacturing concern known as
Crompton Parkinson (Works) India Limited and service and repair to the
said products at its workshop. The third company is Kenyon Greaves
Private Limited and its main business is to manufacture high grade
interstranded ropes for the textile industry. The last company is Ruston
and Hornsby (India) Private Limited and its main business is to
manufacture oil engines and pumps. The last three companies are
controlled by the first company, namely Greaves Cotton and Co. in one
way or the other and that is how the main dispute relating to wages
and dearness allowance was dealt with together by the Tribunal. There
were two references each with respect to the first three companies and
three references with respect to Ruston and Hornsby Private Limited;
and that is how there are nine appeals before us. There were nine
awards, though the main award dealing with the main dispute relating
to wages and dearness allowance was common.
2. It appears that wages and dearness allowance prevalent in the
four companies had been continuing since 1950 when the last award
was made between the parties. It may also be stated that there was no
serious dispute before the Tribunal as to the financial capacity of the
companies and further, as the first Company controls the other three
companies, the wages and dearness allowance are the same so far as
the clerical and subordinate staff are concerned. The same appears to
be the case with respect to factory-workmen.
3. The Tribunal dealt with clerical and subordinate staff separately
from the factory-workmen. So far as the clerical and subordinate staff
are concerned, the Tribunal, after a comparison of wages and dearness
allowance prevalent in the four companies with wages and dearness
allowance prevalent in comparable concerns revised them. Further it
provided how the clerical and subordinate staff would be fitted in the
new scales after making certain adjustments and in that connection it
gave one to three extra increments depending upon length of service
between 1950 to 1959. Finally it ordered that the award would have
effect from April 1, 1959, which was a week before the first reference
was made with respect to the first Company. The Tribunal then dealt
with the case of the factory-workmen and prescribed certain rates of
wages. Further it gave the same dearness allowance to the factory-
workmen as to the clerical and subordinate staff and directed
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 3 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

adjustments also on the same basis. Finally it considered the question

of gratuity and the main provision in that respect was that the
maximum gratuity allowable would be up to 20 months and a provision
was also made to the effect that if and employee was dismissed or
discharged for misconduct which caused financial loss to the employer,
gratuity to the extent of that loss only will not be paid to the employee
concerned.
4. The main attack of the appellants is on the award as regards
wages and dearness allowance. It is urged that the industry-cum-
region formula, which is the basis for fixation of wages and dearness
allowance has not been properly applied by the Tribunal and it had
been carried away by the recommendations of the tripartite conference
which suggested need-based minimum wages. It is also urged that
whatever comparison was made was with concerns which were not
comparable and the wages awarded were even higher than those
prevalent in any comparable concern. It is also urged that the Tribunal
did not consider the total effect of the increase it was granting in basic
wage and dearness allowance together as it should have done, for the
purpose of finding out whether the total pay packet in the appellants'
concerns can bear comparison with the total pay packet of the concerns
with which the tribunal had compared the appellants' concerns. In this
connection it is urged that in fixing scales of wages the Tribunal
increased the maximum and the minimum and the annual rate of
increment and decreased the span of years in which the maximum
would be reached. Adjustments made by the Tribunal are also attacked
and so is the order making the award enforceable from April 1, 1959.
As to the factory-workmen it is urged that the Tribunal made no
attempt to make a comparison with wages prevalent even in what it
considered to be comparable concerns. Lastly it is urged that the
Tribunal created a new category of factory workmen called higher
unskilled which was not demanded and which in any case did not exist
in any comparable concern.
5. The first question therefore which falls for decision is whether the
Tribunal went wrong in not following the industry-cum-region principle
and in leaning on the recommendations of the tripartite conference. It
is true that the Tribunal begins its award with a reference to the
recommendations of the tripartite conference wherein the need-based
minimum wage was evolved. It is urged that this disposed the Tribunal
to pitch wage-scales too high. It is however clear from the award that
though the Tribunal discussed the recommendations of the tripartite
conference at some length, when it actually came to make the award it
did not follow those recommendations. The reason why it referred to
those recommendations was that the respondents-workmen based their
claim on them and wanted that the Tribunal should fix wage-scales
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 4 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

accordingly. But the tribunal's conclusion was that it was not feasible to
do so, though looking at the financial stability of the appellants,
emoluments needed upgrading. It then went on to consider the wages
prevalent in comparable concerns and finally fixed wages for the
appellants on the basis of wages prevalent in such concerns. Though
therefore the recommendations of the tripartite conference are referred
to in the tribunal's award, its final decision is not based on them and
what the Tribunal has done is to make comparisons with what it
considered comparable concerns so far as clerical and subordinate staff
are concerned. We are therefore not prepared to say that reference to
the recommendations of the tripartite conference in the opening part of'
the award was irrelevant and therefore the rest of the award must be
held to be vitiated on that ground alone.
6. The main contention of the appellants however is that the Tribunal
has gone wrong in applying the industry-cum-region formula which is
the basis for fixing wages and dearness and has made comparison with
concerns which are not comparable. It is also urged that the Tribunal
has relied more on the region aspect of the industry-cum-region
formula and not on the industry aspect when dealing with clerical and
subordinate staff and in this it went wrong. Reference in this connection
is made to two decisions of this Court, namely, Workmen of Hindusthan
Motors v. Hindusthan Motors1 and French Motor Car Company v.
2
Workmen and it is emphasised that the principles laid down in
Hindusthan Motors case1 were more applicable to the present case than
2
the principles laid down in French Motor Car Co. case . In the
Hindusthan Motors case1 this Court observed that it was ordinarily
desirable to have as much uniformity as possible in the wage-scales of
different concerns of the same industry working in the same region, as
this puts similar industries more or less on an equal footing in their
production struggle. This Court therefore applied the wage-scales
awarded by the Third Major Engineering Tribunal in Bengal in the case
1
of Hindusthan Motors also. It is urged that the Tribunal should have
taken into account comparable concerns in the same industry and
provided wage-scales on the same lines so that, so far as
manufacturing concerns in the present appeals are concerned, there
will be equality in the matter of competition. In French Motor Car Co.'s
case2 however this Court held so far as clerical staff and subordinate
staff are concerned that it may be possible to take into account even
those concerns which are engaged in different lines of business for the
work of clerical and subordinate staff is more or less the same in all
kinds of concerns. We are of opinion that there is no inconsistency as
urged in the principles laid down in these two cases. As we have
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 5 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

already said the basis of fixation of wages and dearness allowance is

industry-cum-region. Where there are a large number of industrial
concerns of the same kind in the same region it would be proper to put
greater emphasis on the industry part of the industry-cum-region
principle as that would put all concerns on a more or less equal footing
in the matter of production costs and therefore in the matter of
competition in the market and this will equally apply to clerical and
subordinate staff whose wages and dearness allowance also go into
calculation of production costs. But where the number of comparable
concerns is small in a particular region and therefore the competition
aspect is not of the same importance, the region part of the industry-
cum-region formula assumes greater importance particularly with
reference to clerical and subordinate staff and this was what was
2
emphasised in French Motor Car Co. case where that company was
already paying the highest wages in the particular line of business and
therefore comparison had to be made with as similar concerns as
possible in different lines of business for the purpose of fixing wage-
scales and dearness allowance. The principle therefore which emerges
from these two decisions is that in applying the industry-cum-region
formula for fixing wage-scales the Tribunal should lay stress on the
industry part of the formula if there are large number of concerns in the
same region carrying on the same industry; in such a case in order that
production cost may not be unequal and there may be equal
competition, wages should generally be fixed on the basis of the
comparable industries, namely, industries of the same kind. But where
the number of industries of the same kind in a particular region is small
it is the region part of the industry-cum-region formula which assumes
importance particularly in the case of clerical and subordinate staff, for
as pointed out in French Motor Car Co. case2 there is not much
difference in the work of this class of employees in different industries.
In the present cases it does appear that the Tribunal has leaned more
on the region part of the industry-cum-region formula and less on the
industry part. But we think that it cannot be said that the Tribunal was
wrong in doing so for two reasons. In the first place these four
companies are not engaged in the same line of industry; but on
account of certain circumstances, namely, that Greaves Cotton and Co.
is the controlling Company of the other three, it has been usual to keep
the same scales for clerical and subordinate staff in all these concerns.
In the second place, it is not clear, as was clear in the Hindusthan
1
Motors case that there are a large number of comparable concerns in
the same region. As a matter of fact the main company out of these
four is Greaves Cotton and Co, Limited, which is in the main an
investment and financial company and the Tribunal was therefore right
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 6 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

in taking for comparison such companies as would stand comparison

with the main company in the present appeals (namely, Greaves Cotton
and Co.).
7. Both parties filed scales of wages prevalent in what they
considered to be comparable concerns and it is clear from the
documents filed that some of the comparable concerns were the same
in the documents filed by the two parties. On the whole therefore we do
not think the Tribunal was wrong in putting emphasis on the region
aspect of the industry-cum-region formula in the present case insofar
as clerical and subordinate staff was concerned, for the four companies
before us do not belong to the same industry and Greaves Cotton and
Co. controls the other three. Considering therefore the standing of the
main company (namely, Greaves Cotton and Co. Ltd.), it was not
improper for the Tribunal in the present cases to rely on the comparable
concerns which were cited on behalf of the respondents, some of which
were common with the comparable concerns cited on behalf of the
appellants. What the Tribunal did thereafter was to consider the
minimum for various categories of clerical and subordinate staff
prevalent in these comparable concerns and the maximum prevalent
therein and also the annual increments and the span of years in which
the maximum would be reached. The Tribunal then went on to fix
scales for various categories of clerical and subordinate staff of the
appellants which were in-between the scales found in various concerns.
Further, as the financial capacity of the appellants was not disputed,
the Tribunal pitched these scales nearer the highest scales taking into
account the fact that for nine years after 1950 there had been no
increase in wage scales. We do not think therefore that the wage-scales
fixed by the tribunal, leaning as it did, on the region aspect of the
industry-cum-region formula, for the clerical and subordinate staff can
be successfully assailed by the appellants.
8. It has however been urged that the Tribunal overlooked
considering what would be the total wage packet including basic wages
and dearness allowance and that has made the total wages (i.e. basic
wage and dearness allowance) fixed by the Tribunal much higher in the
case of the appellants than in comparable concerns which it took into
account. It is true that the Tribunal has not specifically considered what
the total wage packet would be on the basis of the scales of wages and
dearness allowance fixed by it as it should have done; but considering
that wage-scales fixed are less than the highest in the comparable
concerns though more than the lowest, it cannot be said that the total
wage packet in the case of the appellants would be necessarily higher
than in the case of the other comparable concerns. This will be clear
when we deal with the dearness allowance which has been fixed by the
tribunal, for it will appear that the dearness allowance fixed is more or
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 7 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

less on the same lines i.e. less than the highest but more than the
lowest in other comparable concerns. On this basis it cannot be said
that the total wage packet fixed in these concerns would be the highest
in the region. Though therefore the Tribunal has not specifically
considered this aspect of the matter — which it should have done — its
decision cannot be successfully assailed on the ground that the total
wage packet fixed is the highest in the region.
9. This brings us to the case of factory — workmen. We are of
opinion that there is force in the contention of the appellants insofar as
the fixation of wage-scales for factory-workmen is concerned. The
respondents wanted that separate wages should be fixed for each
category of workmen. The Tribunal however rejected this contention
and held that the usual pattern of having unskilled, semi-skilled and
skilled grades should be followed and the various workmen, though
they should be known by their designation and not by the class in
which they were being placed, should be fitted in these categories. In
the present concerns, there were six categories from before, namely (i)
unskilled, (ii) semi-skilled I (iii) semi-skilled II, (iv) skilled I, (v) skilled
II, and (vi) skilled III. The Tribunal kept these categories though it
introduced a seventh category called the higher unskilled. It is not
seriously disputed that this category of higher unskilled does not exist
in comparable concerns; nor have we been able to understand how the
unskilled category can be sub-divided into two, namely, lower and
higher unskilled, though we can understand the semi-skilled and skilled
categories being sub-divided, depending upon the amount of skill. But
there cannot be degrees of want of skill among the unskilled class. The
Tribunal therefore was not justified in creating the class of higher
unskilled. It is neither necessary nor desirable to create a higher
unskilled category and only the six categories which were prevalent
from before should continue.
10. The main attack of the appellants on the wages fixed for these
six categories is that in doing so, the Tribunal completely overlooked
the wages prevalent for these categories in concerns which it had
considered comparable. A look at the award shows that it is so. The
Tribunal has nowhere considered what the wages for these categories in
comparable concerns are, though it appears that some exemplars were
filed before it; but the way in which the Tribunal has dealt with the
matter shows that it paid scant regard to the exemplars filed before it
and did not care to make the comparison for factory-workmen in the
same way in which it had made comparison for clerical and subordinate
staff. In these circumstances, wage-scales fixed for factory-workmen
must be set aside and the matter remanded to the Tribunal to fix wage-
scales for factory-workmen dividing them into six categories as at
present and then fixing wage after taking into account wages prevalent
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 8 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

in comparable concerns. The parties will be at liberty to lead further

evidence in this connection.
11. Then we come to the question of dearness allowance. So far as
clerical staff is concerned, dearness allowance prevalent in the
appellants' concerns was as follows on the costs of living index of 411-
420:
Basic salary DA at cost of living index group Variation for every
in Rs 411-420 10 point movement
1 to 100 115% of basic salary or the textile 5%
scale on 30 day month whichever
is higher
101 to 200 35% 1½%
201 to 300 25% 1%
301 and 17½% ¾%
above
The Tribunal fixed the dearness allowance as follows:
Salary slab When the consumer price index is Variation for each
between 411-420 10 point rise or fall
in the index
On 1st Rs 115% 5%
100
On 2nd Rs 50% 2%
100
On 3rd Rs 25% 1%
100
Balance up 20% 1%
to Rs 600
A comparison of these figures will show that on the first hundred and
the third hundred there is no difference in the scale fixed by the
tribunal; but there is a slight improvement on the second hundred and
a very slight one above three hundred. This scale fixed by the Tribunal
is in line with some scales of dearness allowance recently fixed by
tribunals in that region. The main improvement is on the second
hundred and it cannot really be said that employees in that wage range
do not require the higher relief granted to them by tribunals in view of
the rise in prices. We do not think therefore that the dearness
allowance fixed by the tribunal, taking into account what was already
prevalent in these concerns and also taking into account the trend in
that region can be successfully assailed so far as clerical staff is
concerned.
12. This brings us to the case of subordinate staff. It appears that in
these concerns, subordinate staff was getting dearness allowance on
different scales based on the old textile scale of dearness allowance.
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 9 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

The Tribunal has put the subordinate staff in the same scale of
dearness allowance as clerical staff. The reason given by it for doing so
is that incongruity in the payment of dearness allowance between
clerical and subordinate staff should be removed. It appears that on
account of different scales of dearness allowance for subordinate and
clerical staff, a member of the subordinate staff drawing the same
wages would get less dearness allowance than a member of the clerical
staff. The discrepancy is very glaring as between clerical staff and
factory-workmen who also have different scales of dearness allowance.
The Tribunal therefore thought that dearness allowance which is meant
to neutralise the rise in cost of living, should be paid to clerical staff,
subordinate staff as well as factory workmen on the same scale, for the
need for neutralisation was uniformly felt by all kinds of employees. It
also pointed that there was a trend towards uniformity in the matter of
scales of dearness allowance as between clerical staff and other staff
and factory workmen and referred to a number of firms where same
scales prevailed for all the staff. It has however been urged on behalf of
the appellants that the pattern in the region is that there are different
scales of dearness allowance for clerical staff and other staff including
factory workmen and the Tribunal therefore should have followed this
pattern. The reasons given by the Tribunal for giving the same scales of
dearness allowance to all the categories of staff, including the factory-
workmen, appear to us to be sound. Time has now come when
employees getting same wages should get the same dearness
allowance irrespective of whether they are working as clerks, or
members of subordinate staff or factory-workmen. The pressure of high
prices is the same on these various kinds of employees. Further
subordinate staff and factory workmen these days are as keen to
educate their children as clerical staff and in the circumstances there
should be no difference in the amount of dearness allowance between
employees of different kinds getting same wages. Further an employee
whether he is of one kind or another getting the same wage hopes for
the same amenities of life and there is no reason why he should not get
them, simply because he is for example, a factory workman though he
may be coming from the same class of people as a member of clerical
staff. On the whole therefore the Tribunal was in our opinion right in
following the trend that has begun in this region and in fixing the same
scale of dearness allowance for subordinate staff and factory-workmen
as in the case of clerical staff. So far therefore as subordinate and
clerical staff are concerned, we see no reason to disagree with the rate
of dearness allowance fixed by the tribunal.
13. This brings us to the case of the dearness allowance for factory-
workmen. In their case we have set aside the award relating to wage
scales. It follows that we must also set aside the award relating to
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 10 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

dearness allowance as we have already indicated that the Tribunal has

to take into consideration the total pay packet in fixing wages and
dearness allowance. When therefore the case goes back to the Tribunal
for fixing wages and dearness allowance for factory-workmen, it will be
open to the Tribunal to fix the same rates of dearness allowance for
factory-workmen as for clerical staff; but in doing so the Tribunal must
when making comparisons take into account the total wage packet (i.e.
basic wages fixed by it as well as dearness allowance) and then
compare it with the total wage packet of comparable concerns and thus
arrive at a just figure for basic wage, for each category of factory-
workmen. But the entire matter is left to the Tribunal and it may follow
such method as it thinks best so long as it arrives at a fair conclusion
after making the necessary comparison.
14. This brings us to the question of adjustment. We have already
said that the Tribunal allowed one to three increments depending upon
the length of service between 1950 and 1959. It has been urged that
no adjustment should have been allowed taking into account the fact
that incremental scales were in force previously also in these concerns
and the Tribunal has increased both the minimum and the maximum in
its award and has granted generous annual increments reducing the
total span within which a particular employee belonging to clerical and
subordinate staff will reach the maximum. Reliance in this connection
2
has been placed on the French Motor Car Co. case . It is true that the
Tribunal has given larger increments thus reducing the span of years
for reaching the maximum. That alone however is no reason for not
granting adjustment. But it is said that in French Motor Co. case2 this
Court held that where scales of pay were existing from before no
adjustment should be granted by giving extra increments and that that
case applies with full force to the facts of the present case. Now in that
case this Court pointed out on a review of a large number of awards
dealing with adjustments that “generally adjustments are granted
when scales of wages are fixed for the first time. But there is nothing in
law to prevent the Industrial Tribunal from granting adjustments to the
employees in the revised wage-scales even in a case where previously
pay-scales were in existence; but this has to be done sparingly taking
into consideration the facts and circumstances of each case. The usual
reason for granting adjustment even where wage-scales were formerly
in existence is that the increments provided in the former wage-scales
were particularly low and therefore justice required that adjustment
should be granted a second time”. Another reason for the same was
that the scales of pay were also low. In those circumstances
adjustments have been granted by tribunals a second time. This Court
then pointed out in that case that the incremental scales prevalent in
that Company were the highest for that kind of industry and therefore
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 11 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

struck down the adjustments granted and ordered that clerical staff
should be fixed on the next higher step in the new scales if there was
no step corresponding to the salary drawn by a clerk in the new scale.
The question therefore whether adjustment should be granted or not is
always a question depending upon the facts and circumstances of each
case.
15. Let us therefore see what the circumstances in the present cases
are? Tables of comparative rates of increments were filed before the
Tribunal for various grades of clerks. It is clear from the examination of
these tables and pay-scales prevalent in the appellants concerns from
1950 that pay scales were not high as compared to pay scales in
comparable concerns. If anything, they were on the low side. Further,
as an example, in the case of junior clerks, the first rate of increment
was Rs 5 in the appellants' concerns and this rate went on for 13 years;
in other concerns where the first rate of increment was Rs 5 it lasted for
a much shorter period, which in no case exceeded eight years and was
in many cases three or four years. In some concerns the first rate of
increment was higher than Rs 5. Almost similar was the case with
senior clerks. So it appears that in the appellants' concerns the first
rate of increment was generally on the low side and lasted for a longer
period then in the case of comparable concerns. In these circumstances
if the Tribunal decided to give increments by way of adjustments it
cannot be said that the Tribunal went wrong. The facts in these cases
are different from the facts in the case of French Motor car Co.'s case2
and therefore we see no reason for interfering with the order of
adjustment. After the change in wage-scales, dearness allowance and
adjustment, the employees of the appellants concerns will stand
comparison with some of the best concerns in that region. But
considering that there is no question of want of financial capacity and
that Greaves Cotton and Co. which is the main Company concerned in
these appeals, has a high standing in that region, we do not think that
the total wage packet fixed is abnormal or so disproportionate as
compared to the total wage packet in other comparable concerns as to
call for any interference with adjustments.
16. The next question is about the so-called retrospective effect of
the award. The first reference was made to the Tribunal on April 8,
1959 while the last was in December 1959. What the Tribunal has done
it to grant wage-scales etc. from April 1, 1959. This cannot in our
opinion be said to be really retrospective, because it is practically from
the date of the first reference in the case of the main company. On the
whole therefore we see no reason to interfere with the order of the
Tribunal fixing the date from which the award would come into force.
17. Lastly we come to the question of gratuity. The attack in this
connection is on two aspects of the gratuity scheme. The first is about
SCC Online Web Edition, © 2025 EBC Publishing Pvt. Ltd.
Page 12 Monday, February 03, 2025
Printed For: Siddharth Garg, Vivekananda Institute of Professional Studies
SCC Online Web Edition: https://www.scconline.com
© 2025 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------

the fixation of 20 months as the maximum instead of 15 months, which

was usual so far. The second is with respect to deduction from gratuity
only to the extent of the financial loss occasioned by misconduct in case
of dismissal for misconduct. So far as the second provision is concerned
it cannot be disputed that this is the usual provision that is being made
in that region. So far as the increase in the maximum from 15 months
to 20 months is concerned, it appears that the Tribunal has relied on a
number of cases in which the maximum is higher than fifteen months
wages. In these circumstances considering that tribunals have now
begun to give a higher ceiling and in one concern, namely, Mackinnon
Mackenzie, the ceiling has been next even so high as thirty months by
agreement, we do not think that any interference is called for in the
present case.
18. We therefore dismiss the appeals so far as retrospective effect
and adjustments as also fixation of wages and dearness allowance with
respect to clerical and subordinate staff are concerned. We allow the
appeal with respect to factory-workmen and send the cases back to the
Tribunal for fixing the wage structure including basic wage and
dearness allowance and for granting adjustments in the light of the
observations made by us. The new award pursuant to this remand will
also come into force from the same date, namely, April 1, 1959. The
appeals with respect to gratuity are dismissed. In the circumstances we
order parties to bear their own costs. Two months from today is allowed
to pay up the arrear.
———
*
Appeals by Special Leave from the Award dated 3rd June 1960 in References (IT) Nos. 84
and 251 of 1959, 16th June 1960 in References (IT) Nos. 112 and 252 of 1959, 15th June
1960 in References (IT) Nos. 121 of 1959 and 7 of 1960, 15th June 1960 in References (IT)
Nos. 123, 180 and 236 of 1959 of the Industrial Tribunal, Maharashtra at Bombay

1
(1962) 2 LLJ 352

2
(1962) 2 LLJ 744

Disclaimer: While every effort is made to avoid any mistake or omission, this casenote/ headnote/ judgment/ act/ rule/
regulation/ circular/ notification is being circulated on the condition and understanding that the publisher would not be
liable in any manner by reason of any mistake or omission or for any action taken or omitted to be taken or advice
rendered or accepted on the basis of this casenote/ headnote/ judgment/ act/ rule/ regulation/ circular/ notification. All
disputes will be subject exclusively to jurisdiction of courts, tribunals and forums at Lucknow only. The authenticity of
this text must be verified from the original source.