il Appeal Nos. 931 and 1149 of 1965.

Appeals from the judgment and decree dated July 31, 1964 of the Calcutta High Court in Appeal from Original Decree No. 613 of 1962.

N. C. Chatterjee, Janaradan Sharma, K. B. Rohtagi and section Balakrishnan, for the appellant (in C.A. No. 931 of 1965) and the respondent (in C. A. No. 1149 of 1965).

D.N. Mukherjee, for the respondent (in C.A. No. 931 of 1965) and the appellant (in C.A. No. 1149 of 1965).

The Judgment of the Court was delivered by Sarkar, C.J.

These appeals arise out of an election to a seat in the West Bengal Legislative Assembly from the Khargram Murshidabad constitutency reserved for members of the Scheduled Castes.

The contestants at this election were Abhoy Pada Saha and Sudhir Kumar Mondal.

Sudhir is admittedly a member of a Scheduled Caste.

Abhoy Pada described himself in the nomination paper as "a member of the Sunri caste which is a Scheduled Caste".

Sudhir objected to this nomination contending that Abhoy Pada did not belong to any Scheduled Caste.

The objection was rejected by the Returning Officer.

At the election which 388 ensued, Abhoy Pada secured 16,730 votes and Sudhir, 15,523 and the former was consequently declared elected.

Sudhir then filed a petition challenging the validity of Abhoy Pada 's election on various grounds.

At the hearing of the petition by the Election Tribunal, however, he challenged the election only on the ground that Abhoy Pada was a member of the Saha caste and not a member of a Scheduled Caste.

The Election Tribunal rejected this contention and dismissed the petition.

Sudhir then appealed to the High Court at Calcutta which reversed the decision of the Tribunal and declared the election of Abhoy Pada invalid and set it aside on the ground that he did not belong to a Scheduled Caste.

In his petition Sudhir had further claimed that he should be declared elected in the place of the appellant if the latter 's election was found to be invalid.

This prayer, however, was rejected by the High Court.

These two appeals are from the judgment of the High Court.

Appeal No. 931 of 1965 is by Abhoy Pada.

He challenges the validity of the order of the High Court setting aside his election.

Appeal No. 1149 of 1965 is by Sudhir and he challenges the validity of the order of the High Court rejecting his prayer to be declared elected.

We shall first deal with Appeal No. 931 of 1965 filed by Abhoy Pada and shall hereafter refer to him as the appellant and Sudhir as the respondent.

article 332 of the Constitution provides that seats shall be reserved for the Scheduled Castes in the Legislative Assembly of every State.

article 341 gives power to the President to specify by public notification the castes or parts of or groups within castes which shall for the purpose of the Constitution be deemed to be Scheduled Castes.

The President, on August 10, 1950, passed the Constitution (Scheduled Castes) Order, 1950 under article 341 setting out in its schedule the various castes which were declared Sche duled Castes.

This Order was amended from time to time by statutes passed by Parliament and it is agreed that at the relevant time Item 40 of Part 13 of the schedule to the Order which set out which were Scheduled Castes in West Bengal stood as follows: "Sunri excluding Saha".

Item 40 and some other items of the schedule were made applicable to the State of West Bengal except the Purulia District and the territories transferred from Purnea District of Bihar and it is with this item that we are concerned.

The question is, whether the appellant was a member of the Scheduled Caste specified in this item.

In the election petition, the respondent had stated that the appellant, was a member of the Saha caste and not a member of any Schedule Caste.

It was said that this showed that the respondent 's case was that the appellant belonged to an independent caste which had nothing to do with Sunri caste and that it was, therefore, not c open to him at the trial to contend, as he appears to have done.

389 that the appellant was a Sunri by caste but was excluded from the Scheduled Caste group because he belonged to a smaller caste group of Sunirs known as Sahas.

We are unable to take this strict view of the pleading.

The petition may, in our opinion, be reasonably read as stating that the appellant was a member of the Saha caste, a smaller caste group within the bigger caste group of Sunirs and was for that reason not a member of the Scheduled Caste specified in item 40.

We also observe that this reading of the petition which was accepted by the Election Tribunal, did not cause any surprise to the appellant at the trial or result in any injustice.

The High Court also read the petition in the same way.

In our view, it was open to the respondent to show that the appellant belonged to the Saha caste group within the Sunri caste group and did not, therefore, belong to the Schedule Caste specified in item 40 as he claimed.

The Tribunal rejected the respondent 's case that the Sunri caste was divided into certain groups of which the Sahas formed one.

It came to the conclusion that the Sahas originally belonged to the Sunri caste but for a long time past they had formed themselves into a different caste which had no connection with the Sunris.

It is not very clear whether the Tribunal thought that the Sahas were originally a smaller caste group within the Sunri caste group or were only distinguished from the other Sunris by their surname.

We are, however, inclined to think that the Tribunal thought that the Sahas were originally a smaller caste group within the Sunri caste because it rejected a contention advanced by the respondent that item 40 excluded from Sunirs those who bore the surname Saha observing that the names given in the schedule to the Order all referred to castes, subcaliber or groups.

It found that the evidence clearly established that the appellant belonged to the Sunri caste a fact which appears to have been admitted by the respondent and, therefore, did not belong to the independent caste which according to the Tribunal, the Sahas have formed for a long time past.

In that view of the matter, the Tribunal held the appellant to be a Sunri and a person belonging to the Schedule Caste specified in item 40 and, therefore, dismissed the election petition.

It took the view that item 40 had excluded Sahas from Sunirs by way of abundant caution, so that the Sahas who had originally belonged to the Sunri caste but had long 'ago severed all connections with it and developed into a distinct and independent caste, might not claim, by virtue of their origin, to belong to the Sunri caste stated in the item.

In the High Court P. N. Mookerjee, J. observed that the Tribunal had gone wrong in considering the Sahas as an independent caste.

He said that the expression "excluding" denoted that the Sahas contemplated would, but for this word, have come within the Sunri caste.

He held that the Sahas formed "a group within the Sunri caste be it a sub caste strictly so called or other 390 wise".

He also held that the evidence did not establish that the Sahas formed a sub caste strictly so called within the Sunri caste of a caste wholly independent of the Sunri caste.

His conclusion was that the expression "excluding Saba" referred to those Sunris who bore the surname Saha irrespective of whether they belonged to a sub caste strictly so called, of Sunris or not.

The learned Judge, therefore, held that as the appellant bore the surname Saha, he did not belong to the Scheduled Caste specified in item 40 though he was a Sunri.

The other learned Judge, Basu, J. held that the words "parts or groups within castes" in article 341 were wide enough to refer to any determinate part of a caste distinguished by a surname or otherwise and it was not necessary that such part must necessarily form a sub caste.

He also held that the evidence broadly supported "the conclusion that the respondent 's family belongs to the Saba sub caste or group within the Sunri caste".

The learned Judge however, appears to have set aside the decision of the Tribunal and directed the election of the appellant to be set aside on the ground that the appellant bore the surname Saha and was thereby excluded from the Scheduled Caste specified in item 40 for he said "these Saha families, within the fold of Sunri caste, distinguished themselves by their surname, whatever might be their other characteristics" and have come to form a class apart from the rest of the Sunris.

Now, the point in issue is, whether the appellant satisfied the description "Sunri excluding Saha" in item 40 of the President 's Order.

To decide that point, the description has first to be properly interpreted and understood.

As we have said, the Tribunal thought that the Sahas formed a distinct caste wholly outside the Sunri caste and they had been specifically excluded in item 40 for greater safety o prevent them from claiming to be Sunris by reason of their origin.

The learned Judges of the High Court thought that the effect of the item was to exclude from the Sunri caste those who belonged to that caste but bore the surname Saha.

We are unable to agree with either of these interpretations.

There is no doubt that Sunri is a caste.

Nobody disputes that.

That also follows from the fact that the Constitution (Scheduled Castes) Order, 1950 was promulgated to indicate those castes who are to be considered as Scheduled Castes for the purpose of the Constitution.

"Sunri" in item 40, therefore.

refers to a caste.

If Sunri is a caste, the word 'Saha ' in the expression "excluding Saha" in the item must, without more.

also refer to a caste group within the Sunri caste.

It is legitimate to think that when a statute says that a thing is to be excluded from another, both things are of the same kind; if one is a caste.

the other must be a caste.

It follows that when the item excluded Sahas from Sunris, since Sunri is a caste group, Saha must equally be another caste group.

The Tribunal appears to have taken the same view.

Now a thing can be 391 excluded from another only if it was otherwise within it.

Therefore, the correct interpretation of the item is that it indicates men of the Sunri caste but not those within that caste who formed the smaller caste group of Sahas.

This is where the Tribunal went wrong.

The Tribunal came to its conclusion that "Saha" in the item referred to a caste distinct from the Sunri caste because the evidence before it did not show that there was within the Sunri caste, a smaller caste group called Sahas.

The error of the Tribunal lay in interpreting the Order in the light of the evidence before it.

There was no justification for doing that.

After all, the evidence led in a case may be imperfect.

Suppose the evidence in another case led to the conclusion, as it might conceivably do, that there was a smaller caste group within the Sunri caste, called Sahas.

In that case, if the reasoning applied by the Tribunal is right, it has to be held that the expression "excluding Saha" meant excluding a smaller caste group called Sahas.

A method of interpreting a statutory provision which might lead to such uncertainty cannot be correct.

If the correct interpretation of item 40 was, as we think it was, that Sahas were a caste group within the Sunri caste, no question of Sahas being a distinct class independent of Sunris ,could arise.

The finding that Sahas were a wholly independent caste was altogether irrelevant to the point in issue.

Evidence cannot alter the natural interpretation of the words in the Order.

For the same reason, we are unable to agree with the interpretation of the High Court that the Sahas excluded were those Sunris who bore the surname Saha.

We think the learned Judges of the High Court also interpreted item 40 in the light of the evidence in the case.

If the intention was to exclude from Sunris those members of that caste who bore the surname Saha, the item would have said so; it would then have read "Sunri excluding those who bore the surname Saha".

In the absence of such words "Saha" must, in the context, be understood as referring to a smaller caste group within the bigger caste group of Sunris.

Surname is irrelevant as a test for applying item 40 unless it is shown that it indicated a smaller caste group of Sunris.

It is nobody 's case that there is evidence to show that.

It is of interest to remind in the connection that the Order provides that the Sunris in the Purulia District and those parts of the Purnea District which had been transferred to West Bengal were not to be considered as belonging to a Scheduled Caste.

That would show that where the exclusion is by a test other than a caste group, the Order expressly says so.

It is natural to think that if the excluded Sahas were those Sunris who bore the surname Saha, the Order would have made that clear.

In our opinion, the learned Judges of the High Court were in error in interpreting the item on the evidence in the case as they appear to have done.

L/S5SCI 27 392 If we are right in our interpretation of item 40, then the only question that has to be decided in this case is, whether the respondent has established that the appellant belonged to a smaller caste group called Sahas within the Sunri caste.

This question presents no difficulty.

The respondent called witnesses to establish that the appellant belonged to the smaller caste group of Sahas.

These witnesses were disbelieved by the Tribunal which described them as unreliable.

P.N. Mookerjee, J. said, "it has not been proved that the respondent (appellant here) belonged to any separate Saha caste or to any Saha Sunri sub caste of the Sunri caste".

Though Basu, J. said that the appellant belonged to the Saha group of Sunris, it would appear that 'he was thinking of that group as consisting of those Sunris who bore the surname Saha.

All the courts in West 'Bengal, therefore, came to the conclusion that it had not been prov ed in this case that the appellant belonged to the smaller caste group of Sahas.

We have no reason to take a different view of the evidence.

The result then is, that the appellant is a Sunri by caste and has not been proved to belong to the smaller caste group of Sahas.

He must be held to belong to the Scheduled Caste specified in item 40.

That being so, the election petition must fail.

Accordingly, we allow Appeal No. 931 of 1965 and set aside the judgment of the High Court and restore that of the Election Tribunal dismissing the petition.

The appellant will get the costs throughout.

In the view that we have taken in Appeal No. 931 of 1965, the other appeal must necessarily be dismissed and we, therefore, dismiss it with costs.

One set of hearing fees only.

Appeal No. 931 of 1965 allowed.

Appeal No. 1149 of 1965 dismissed.

Summary: When item 40 of Part 13 of the Schedule to the Constitution (Scheduled Castes) Order, 1950, declared "Sunris excluding Sahas" as a Schduled Caste, it indicates that men of Sunri caste but not those within that caste who formed the smaller caste group of Sahas, are members of a Scheduled Caste.

Summary: It does not indicate that Sahas are a caste distinct from the Sunri caste, nor was it intended to exclude from Sunris those members of that caste who bore the surname Saha.

Summary: [391 A, D].

Summary: Therefore, when the respondent challenged the election to the West Bengal Legislative Assembly, of the appellant who described himself as a member of the Sunri caste, on the ground that he was a member of the Saha caste group but failed to prove the allegation, it must be held that the appellant was a Sunri by caste and belonged to the Scheduled caste specified in the item, even though he bore the surname Saha.

Summary: [392 D].


N: Criminal Appeal No. 8 of 1951.

Appeal from an Order of the High Court of Bombay (Bavdekar and Chainani JJ.) dated 20th February, 1950, in Criminal Appeal No. 106 of 1950 arising out of an order dated 9th January, 1950, of the Presidency Magistrate, 19th Court, Esplanade, Bombay, in Case No. 10879/P of 1949.

The facts are stated in the judgment.

Iswarlal C. Dalai and R.B. Dalai, for the appellant.

C.K. Daphtary, Solicitor General for India (G. N. Joshi, with him) for the Republic of India (respondent No. 1).Jindra Lal for the respondent No. 2. 1952.

February 1.

The Judgment of the Court was deliv ered by CHANDRASEKHARA AIYAR J.

The facts out of which this Crimi nal Appeal has arisen are not long.

The appellant, W.H. King, who is carrying on a business in Bombay under the name and style of Associated Commercial Enterprises, was the tenant of a flat on the second floor of a building called "Ganga Vihar", Marine Drive, Bombay, which belongs to a lady named Durgeshwari Devi.

The tenancy was a monthly one, the rent being Rs. 215.

It is said that the appellant wanted to go to the United Kingdom for treatment of his failing eye sight and he got into touch with the complainant Mulchand Kodumal Bhatia, who is the second respondent in this appeal, through one Sayed for the purpose of making necessary ar rangements about the flat occupied by him in view of his intended departure.

The prosecution case is that the accused demanded a sum of Rs. 30,000 which was later on reduced to Rs. 29,500 as consideration for putting the complainant in vacant possession of the flat and an additional amount of Rs. 2,000 for the furniture, and that the complainant agreed to pay these sums.

The complainant actually paid the accused two sums of 420 Rs. 500 each on 7th November, 1948, and 17th November, 1948.

He, however, got into touch with the police on 1 12 1948, and in conjunction with the latter, a trap was laid for the appellant.

It was arranged that the complainant should bring with him Rs. 1,000, being the balance due in respect of the furniture and that the police would give him Rs. 29,500 to be paid to the appellant.

The complainant and a Sub Inspec tor, posing as the complainant 's brother, went to the appel lant on 4 12 1948, and paid him the two sums of money; and the keys of the flat and the motor garage were handed over to the complainant.

As the appellant and his wife were leaving the flat, the man, who masqueraded as the complain ant 's brother, threw off his disguise and disclosed his identity.

The police party, who were down below ready for the raid, held up the car of the appellant and recovered the sum of Rs. 30,500 from the rear seat of the car and also some papers, a typed draft of a partnership agreement be tween the complainant and the appellant and an application form for permission to occupy the building as caretaker.

From the complainant were recovered the bunch of keys and the documents that were handed over to him by the appellant, namely, the letter handing vacant possession (Exhibit D).

the receipt for Rs. 2,000 for the articles of furniture (Exhibit E), a letter to the Bombay Gas Company for transfer of the gas connection to the name of the complainant (Exhib it F), and the letter to the Bombay Electric Supply and Transport Committee for transfer of the telephone connec tions and the deposit of Rs. 27 (Exhibit G).

The appellant was charged under section 18(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, for receiving a pugree of Rs. 29,500 and he was further charged under section 19(2) of the said Act for receiving the said sum as a condition for the relin quishment of his tenancy.

His wife, who was the second accused in the case, was charged with aiding and abetting her husband in the commission of the two offences.

421 The defence of the appellant was that he was in search of a partner to carry on his business during his intended absence, who was also to act as caretaker of his flat anal that it was in this connection and with this object in view that he entered into negotiations with the complain ant.

The sum of Rs. 29 500 was not pugree but represented capital for 0 12 0 share in the business and as the com plainant was also to be a caretaker of the flat, the sum of Rs. 2,000 was paid and received as a guarantee against disposal and damage of the furniture and it was agreed to be paid back on the appellant 's return to India.

The wife of the appellant denied any aiding and abetting.

The Presidency Magistrate, who tried the case, disbe lieved the defence on the facts, holding that what was received by the accused was by way of pugree.

As section 18 (1) of the Act was not applicable he convicted him under section 19(2) of the Act and sentenced him, in view of his old age and blindness, to one day 's simple imprisonment and a fine of Rs. 30,000.

The wife was acquitted, the evidence being insufficient to prove any abetment.

The appellant preferred an appeal to the High Court of Bombay but it was summarily dismissed on 20 2 1950.

He asked for a certificate under article 134(1)(c) of the Constitution but this was rejected on 10 4 1950.

Thereaf ter he applied for special leave to appeal to this Court and it was granted on 3 10 1950.

A short legal argument was advanced on behalf of the appellant based on the language of section 19 (1) of the Act and this is the only point which requires our consideration.

The section which consists of two parts is in these terms:" "(1) It shall not be lawful for the tenant or any person acting or purporting to act on behalf of the tenant to claim or receive any sum or any consideration as a condi tion for the relinquishment of his tenancy of any premises; 422 (2) Any tenant or person who in contravention of the provisions of sub section (1) receives any sum or considera tion shall, on conviction, be punished with imprisonment for a term which may extend to 6 months and shall also be pun ished with fine which shall not be less than the sum or the value of the consideration received by him.

" It was urged that the offence arises only on receipt of any sum or any consideration as a condition of the relin quishment by a tenant of his tenancy and that in the present case there was no such relinquishment.

Exhibit D, which is the most material document, under which the appellant handed over vacant possession of the flat to the complainant, constitutes or evidences an assignment of the tenancy and not a relinquishment.

It says : "I, W.H. King, hereby hand over vacant possession of my flat No. 3 situated on 2nd floor and garage No. 4 on the ground floor of Ganga Vihar Building on Plot No. 55 situated on Marine Drive Road to Mr. Mulchand Kodumal Bhatia from this day onward and that I have no claim whatsoever over this flat and Mr. Mulchand Kodumal Bhatia will pay the rent directly to the landlord.

" The argument raised on behalf of the appellant appears to us to be sound and has to be accepted.

The learned Solic itor General urged that 'the word "relinquishment" was not a term of art and was used in the section not in any strict technical sense but in its comprehensive meaning as giving up of possession of the premises; and he pointed out that if it was intended by the legislature that "relinquish ment" should have the limited meaning sought to be placed upon it on behalf of the appellant, the word "surrender" used in the Transfer of Property Act would have been more appropriate.

Sections 15 and 18 of the Act were referred to in this connection but in our opinion they lend no assist ance to the argument of the learned counsel.

Any sublet ting, assignment or transfer in any other manner of his interest by the tenant is made unlawful under 423 section 15.

Section 18 deals with the grant, renewal or continuance of a lease of any premises or the giving of his consent by the landlord to the transfer of a lease by sub lease or otherwise, and it provides that the landlord, who receives any fine, premium, or other like sum or deposit, or any consideration for the grant, renewal or continuance or the accord of consent oh would be guilty of an offence and liable to the punishment therein specified.

It would thus be seen that an assignment of the lease or transfer in any other manner by a tenant is not made an offence; the statute merely says that it is not a lawful transaction.

It is the landlord 's consent to the transfer of a lease by sub lease or otherwise on receipt of consideration that has been made an offence.

Then follows section 19 which speaks of the relinquishment of his tenancy of any premises by a tenant.

If, by the expression, an assignment such as we have in the present case was meant, appropriate words could have been used, such as the transfer by a tenant of his interest, which we find in section 108, sub clause (i), of the Trans fer of Property Act.

The distinction between an assignment on the one hand and relinquishment or surrender on the other is too plain to be ignored.

In the case of an assignment, the assignor contin ues to be liable to the landlord for the performance of his obligations under the tenancy and this liability is contrac tual, while the assignee becomes liable by reason of privity of estate.

The consent of the landlord to an assignment is not necessary, in the absence of a contract or local usage to the contrary.

But in the case of relinquishment, it cannot be a unilateral transaction; it can only be in favour of the lessor by mutual agreement between them.

The relin quishment of possession must be to the lessor or one who holds his interest.

In fact, a surrender or relinquishment terminates the lessee 's rights and lets in the lessor.

It is no doubt true that the word "relinquishment" does not occur in the Transfer of Property Act but it is found in many of the Tenancy Acts in various provinces where there are Sec tions which deal with the 55 424 relinquishment of their holdings by tenants in favour of the landlord by notice given to him in writing.

The section in question, it should be further noted, does not speak of relinquishment or giving up of possession,in general terms.

The words are "the relinquishment of his tenancy of any premises".

The relinquishment of a tenancy is equivalent to surrender by the lessee or tenant of his rights as such.

Whether abandonment of a tenancy would come within the meaning of relinquishment is a question that does not arise in this appeal, because in the face of Exhibit D, there is no abandonment in the sense that the tenant disappeared from the scene altogether saying nothing and making no arrange ments about his interest and possession under the lease.

As the statute creates an offence and imposes a penalty of fine and imprisonment, the words of the section must be strictly construed in favour of the subject.

We are not concerned so much with what might possibly have been intend ed as with what has been actually said in and by the language employed.

As in our view, there has been no "relinquishment" within the meaning of section 19, sub clause (1), the conviction under sub clause (2) cannot be sustained.

It is set aside and the fine of Rs. 30,000 will be refunded if it has al ready been paid.

The other parts of the order of the learned Presidency Magistrate, as regards the disposal of Rs. 1,000 paid by the complainant to the appellant and the sum of Rs. 29,500 brought in by the police, will, however, stand.

Conviction sit aside.

Agent for respondent No. 1: P.A. Mehta.

Agent for respondent No. 2: Ganpat Rai.

Summary: Sub section (1) of sec.

Summary: 19 of the Bombay Rents, Hotel and Lodging House Rates Control Act, LVI I of 1947, provided that "it shall not be lawful for the tenant or any person acting or purporting to act on behalf of the tenant to claim or receive any sum or any consideration as a condition for the relinquishment of his tenancy of any premises"; and sub sec.

Summary: (2) provided that any tenant or person who in contravention of the provisions of sub sec.

Summary: (1) receives any sum or consideration shall on conviction be punished with imprisonment and also with fine.

Summary: A. who was a tenant of a flat, handed over vacant posses sion the flat to B on receiving "pugree", under a document which recited that A shall have no claim whatever over the flat and that B shall pay the rent directly to the landlord.

Summary: A was convicted of an offence under sec.

Summary: 19 (2).

Summary: Held, that there was no "relinquishment" of his tenancy by A, within the meaning of sec.

Summary: 19 (1) and the conviction could not be sustained.

Summary: There is a clear distinction between an assignment of a tenancy on the one hand and a relinquishment or surrender on the other.

Summary: In the case of an assignment, the assignor con tinues to be liable to the landlord for the performance of his obligations under the tenancy and this liability is contractual, while the assignee becomes liable by reason of privity of estate.

Summary: The consent of the landlord to an as signment is not necessary, in the absence of a contract or local usage to the contrary.

Summary: But in the case of relinquish ment it cannot be a unilateral transaction; it can only be in favour of the lessor by mutual agreement between them.

Summary: Relinquishment of possession must be to the lessor or one who holds his interest; and surrender or relinquishment terminates the lessee 's rights and lets in the lessor.

Summary: As sec.

Summary: 19 of Bombay Act LVII of 1947 creates an offence and imposes a penalty of fine and imprisonment, the words of the section must be strictly construed in favour of the subject.

Summary: The Court is not concerned so much with what might possibly have been intended as with what has been actually said in and by the language employed in the statute.

Summary: Judgment of the Bombay High Court reversed.


Civil Appeals Nos. 2299 and 2300 of 1979.

Appeal by Special Leave from the Award dated 20 12 1978 of the Industrial Tribunal Maharashtra in Reference (IT) No. 292 of 1975, published in Maharashtra Government Gazette dated 15th February, 1979.

G. B. Pai, Manick K. Gagrat, J. B. Dadachanji, O. C. Mathur and K. J. John for the Appellants in CA No. 2299 and Respondents in CA 2300/79.

V. M. Tarkunde, P. H. Parekh, section R. Deshpande and Miss Manik Tarkunde for the Respondents in CA 2299 and Appellants in CA No. 2300/79.

The following Judgements were delivered: PATHAK, J.

This appeal by special leave has been preferred by Tata Consultancy Engineers against an award dated 20th December, 1978 of the Industrial Tribunal, Maharashtra, Bombay revising the wage scales of certain categories of employees and granting various other benefits.

Tata Consultant Engineers, at its inception, was a partnership firm but subsequently the partnership was dissolved and in 1974 the undertaking became one of the divisions of Tata Sons Limited.

It functions as a consulting organisation and a service industry, and does not manufacture any product or carry on trade.

Its work force consists of engineers and supervisors and different categories of workmen.

Out of 665 employees at Bombay, the draftsmen and the administrative staff number 306.

These workmen are members of the Tata Consultant Employees Union.

They served a Charter of Demands in July, 1974, on the appellant, and as their demands were not accepted and conciliation proceedings proved fruitless, the State Government made a reference of the dispute under section 10(1) (d), Industrial Tribunal, Maharashtra for adjudication.

The Reference was numbered I. T. No. 292 of 1975.

170 The Union filed a statement before the Tribunal claiming an upward revision of the wage scales and dearness allowance and an increase from fifteen years to twenty years in the span for earning annual increments.

It was urged that the Efficiency Bar, as a feature of the wage scales, should be removed.

The dearness allowance, it was claimed, should be granted on a slab system.

The claim of the Union was resisted by the appellant, who maintained that the existing wage scales were fair and reasonable on a region cum industry basis and that it would not be possible for the appellant to bear the additional financial burden if the demands of the Union were accepted.

Reference was made to the political uncertainty in Iran which had placed an appreciable part of the appellant 's business in jeopardy and to various other factors, peculiar to an engineering consultancy business, beyond the appellant 's control.

There was fierce competition also, it was asserted, from other similar organisations.

The appellant had introduced various pay scales in 1973 and some time later they were revised.

There was no separate dearness allowance until January, 1977 when it was introduced for the first time.

House rent allowance was also paid.

Dearness allowance became payable at 10% of the basic wage subject to a minimum of Rs. 50/ and house rent allowance at 30% of the basic salary.

Nothing those facts, the Tribunal observed that compared with the increased paying capacity of the appellant, an inference drawn from the prosperity enjoyed by the appellant over the years, there was definite need for revising the wage scales.

It was pointed out that the dearness allowance and house rent allowance granted by the appellant made little impact in neutralising the cost of living.

The need for revising the wage scales was not disputed by the appellant.

In proceeding to revise the wage structure the Tribunal took into account the two principles involved in the process, the financial capacity of the industry to bear the burden of an increased wage bill, and the prevailing wage structure on an industry cum region basis.

Wage scale statements were filed by the parties before the Tribunal pertaining to several engineering consultancy organisations but in the absence of pertinent information concerning the strength of their labour force, the extent of their business, the financial position for some years, the capital invested, the precise nature of the business, the position regarding reserves, dividends declared and future prospects of the company, the Tribunal found that it was unable to rely on them as comparable concerns.

Holding it impossible in the circumstances to apply the principle of industry cum region basis, the Tribunal turned to a consideration of the financial capacity of the company to bear an additional burden.

171 in this connection, it proceeded on the footing that the appellant was a separate and independent division of Tata Sons Limited and had no "functional integrality" with the other divisions.

Having regard to the net profits earned by the appellant from 1968 to 1977 it found that the acceptance of the demands of the Union would result in an increased burden of Rs. 7 crores, a burden which would dry up the appellant 's resources and would be impossible for it to bear.

The Union modified its demands but even the modified terms, according to the Tribunal, appeared to be on the high side inasmuch as the resulting total burden of Rs. 1.70 crores was much higher than the average profits could sustain.

The particular character of the appellant, that it was a service industry and not a manufacturing concern, was taken into account and it was observed that unlike a manufacturing business there was little scope for diversification in the case of an engineering consultancy.

Nonetheless, the Tribunal observed, there was every reason to expect that the appellant would be able to earn sound profits in the future, and the instability in its business activities occasioned by the turbulent political situation in Iran, would be, it was expected, compensated by contracts secured in different developing countries.

For the purpose of determining the financial capacity of the appellant, the Tribunal followed Unichem Laboratories vs Their Workmen(1) where it was held that the gross profits should be computed without making deductions on account of taxation, development rebate and depreciation.

It decided also that there was no ground for deducting the notional value of gratuity.

Revising the figures on that basis, it computed the annual gross profits for the years 1968 to 1977 and determined the annual average at Rs. 26.69 lakhs.

The Tribunal took note of the elaborate scales of wages already existing in the wage structure of the appellant and decided "to modify the existing structure of the scales with flat increases in each category.

" It also observed that the category of Draughtsmen needed a special increase.

But it rejected the demand of the Union for dearness allowance on the basis of a slab system, because that would have imposed an unacceptable burden on the appellant 's financial capacity and there was no reason why the existing scheme of dearness allowance should be disturbed when a substantial increase was being made in the level of the basic wage.

Taking into account the circumstance that besides the staff of 306 workmen represented by the Union there were several other employees who would also have to be paid, the Tribunal considered it fair, in paragraph 23 of the award, to give a flat increase of Rs. 150/ in the category of Draughtsmen and Rs. 100/ in the case of other categories.

It rejected the demand of the Union 172 for abolishing the Efficiency Bar, but the span of 15 years for earning increment was expanded in some grades to 20 years and some adjustments were also made in specific grades.

The Tribunal also noted that after the salaries of the employees had been fixed in the respective scales, senior employees would have to be given some more increments in the new scales according to their completed years of service.

Taking all these factors into consideration, it made an award dated 20th December, 1978 prescribing the following revision in the existing scales of wages: Grade & Category Existing Grade/ Revised Grade/ Scale Scale I Peon/Helper/ Rs. 250 10 300 EB Rs. 350 10 450 15 Sweeper 10 400.

II Driver/Asstt.

Rs. 300 10 420 EB Rs. 400 15 520 20 House keeper/ 15 540.

660 EB 25 785.

Caretaker.

III Jr. Clerk cum Rs. 350 15 425 EB Rs. 450 20 550 25 Typist/Jr.

Steno 20 625 EB 25 725.

800 EB 30 950.

Optr./Recep tionist/Assist.

Record Keeper/ Veh.

Mechanic/ Jr. Librarian.

IV Sr.

Clerk/Steno/ Rs. 450 20 530 EB Rs. 550 25 675 30 Record Keeper/ 30 860 EB 35 1000.

975 EB 40 1175.

Operator/ Xerox Operator V Office Asstt./ Rs. 590 30 740 EB Rs. 690 35 865 40 Lib.

Asstt./ 35 1020 EB 40 1300 1265 EB 45 1490.

Assist./ Administrative Assist./Personnel Asstt./Comm.

Asstt./ Canteen Asstt.

VI Draughtsman/Site Rs. 380 30 620 40 Rs. 530 40 730 50 Supervisor/ 1020 EB 50 1320.

1230 EB 60 1530.

Surveyor/(Diploma Holder).

VII Junior Architect Rs. 760 40 1000 50 Rs. 860 50 1160 (Engineering 1300.

60 1700.

Graduate) VIII Sr.

Draughtsman Rs. 1000 50 1300 Rs. 1100 60 1340 (Diploma Holder) 60 1600 75 1750.

70 1690 80 2010.

The Tribunal maintained the existing schemes of dearness allowance and house rent allowance, and observed that in view of the revised basic wages there would be a resultant increase in the dearness allowance and house rent allowance.

The revised wage scales, the Tribunal directed, should take effect retrospectively from 1st January, 1976.

It also laid down the principle enabling the actual fitment of the workmen in their respective wage scales as on that date and also provided for the number of increments to which they would be entitled having regard to the period of completed service.

173 Two days after the award was made, an application was made by the Union stating: "In the said award, your Honour has observed, at the end of para 22, "In view of the increase that is being allowed in the basic pay, I do not propose to revise the existing scheme of Dearness Allowance.

" Further, it appears that the Tribunal intended to grant the increase of Rs. 150/ to each draughtsman and Rs. 100/ to all other workmen in their basic pay.

However, this is not clearly mentioned anywhere in the award due to accidental slip or omission.

" The Union prayed that the position may be clarified and the award corrected accordingly.

On the same date, the Tribunal disposed of the application by the following order: "There can be no doubt that a flat increase of Rs. 150/ to each of the employees in the category of Draftsmen and of Rs. 100/ to each employee in the other categories has been granted under my award.

The same has been made clear in paragraph No. 23, but it appears that the words "to each employee" after the figure "Rs. 150/ " were omitted.

Similarly, the same words "to each employee" after the figure "100" were omitted.

When the award is sent for publication, a necessary corrigendum be made in the award and the aforesaid words after the figures Rs. 150/ and Rs. 100/ be added.

It may be mentioned that only from that point of view viz. to grant flat increase of Rs. 150/ and of Rs. 100/ to the employees in the category of Draftsmen and the other categories respectively that a burden statement was called for from the company and the same was submitted (vide exhibit C 51).

The fitment has also to be done only after the flat increase is added to the present basic salary of each employee.

I do not think that any problem would arise for interpretation of the award.

Since the award has been already signed, I do not think anything further can be added to this award.

sd/ K. N. Wani INDUSTRIAL TRIBUNAL.

" In this appeal, the learned counsel for the appellant had covered a wide field, but in the end he states that the appellant is aggrieved by two matters only.

One is the retrospectivity attached to the revised wage scales, and the other is the flat increase given to each 174 employee of Rs. 150/ in the category of Draughtsmen and Rs. 100/ in other categories resulting from the order dated 22nd December, 1978.

The workmen have filed an appeal by special leave, Civil Appeal No. 2300 of 1979, in which they have challenged the rejection by the Tribunal of their claim in respect of dearness allowance which, they contend, should be pegged to the cost of living index and should not be a fixed amount.

Considering the appeal of Tata Consulting Engineers first, the contention of learned counsel for the appellant is that having regard to the financial capacity of the appellant the Tribunal erred in making the wage scales retrospective and, in any event, in ranging the retrospectivity back to 1st January, 1976.

We have been taken through some of the material on the record in the attempt to support the contention, but after giving careful thought to the matter, I think there is ample justification for what the Tribunal did.

It must be remembered that although the wage scales were introduced as long ago as 1973 they were maintained at that level except for a slight revision some time thereafter.

No dearness allowance was 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, as the Tribunal has found, the dearness allowance and house rent allowance made no appreciable impact in neutralising the increasing cost.

During all these years, the appellant had continued to enjoy increasing profits; nonetheless the emoluments received by the workmen did not receive the impress of the appellant 's growing prosperity.

The Charter of Demands was presented by the Union in July, 1974 and when conciliation proceedings failed the State Government made the reference to the Industrial Tribunal in 1975.

The Tribunal has referred to various considerations which prevailed with it in giving retrospectivity to the revised pay scales.

They are considerations which cannot be ignored.

Accordingly, the contention raised on behalf of the appellant against retrospectivity of the wage scales must be rejected.

The challenge embodied in the second contention against the amendment of the award is more serious.

It is urged that the amendment results in the inclusion of a flat increase of Rs. 150/ to each workman in the case of Draughtsman and Rs. 100/ to each workman in the case of other categories, a result wholly unwarranted, it is said, by the intent of the original award and, therefore, falling beyond the jurisdiction of the Tribunal.

In making the application of 22nd December, 1978, the Union invoked the jurisdiction of the 175 Tribunal under rule 31 of the Industrial Disputes (Bombay) Rules, 1957.

Rule 31 provides: "31.

The Labour Court, Tribunal or Arbitrator may correct any clerical mistake or error arising from an accidental slip or omission in any award it or he issues.

" The jurisdiction given to the Tribunal by rule 31 is closely circumscribed.

It is only a clerical mistake or error which can be corrected, and the clerical mistake or error must arise from an accidental slip or omission in the award.

An accidental slip or omission implies that something was intended and contrary to that intention what should not have been included has been included or what should have been included has been omitted.

It must be a mistake or error amenable to clerical correction only.

It must not be a mistake or error which calls for rectification by modification of the conscious adjudication on the issues involved.

Is the instant case one where the amendment made by the Tribunal in the original award can be said to correct a mere clerical mistake or error arising from an accidental slip or omission? To answer the question, it is necessary to examine the basis of the award and the intent which flows from that basis.

The terms of reference in the State Government 's order required the Tribunal to revise the scales of pay and dearness allowance, and there was no mention of giving any ad hoc increase in the basic pay of individual workman.

It would do well to recall that the claim of the Union filed before the Tribunal also centered on the need to revise the wage scales.

That was the main issue between the parties.

It is to the task of revising the pay scales that the Tribunal addressed itself, and throughout the material part of the award it is that task which held its focussed attention.

The financial capacity of the appellant, and the related study of its annual profits from 1968 to 1977, were examined from that view point.

The sufficiency of the existing pay scales was considered in detail, and regard was had to their original structure and the accretions made subsequently by way of dearness allowance and house rent allowance.

For the purpose of restructuring the pay scales the Tribunal ruled on the paying capacity of the appellant, both with reference to the profits of the preceding year as well as the prospects of the future.

The financial capacity, as the Tribunal observed, constituted one of "the principles which are required to be followed in the fixation of the wage structure." A clear statement of its intention is found in paragraph 22 of the award, where the Tribunal stated: "I only propose to modify the existing structures of the scales with flat increases in each category." 176 No ad hoc increase to the pay of each individual workman was intended.

And that is confirmed by what was stated in paragraph 23 of the award: "Considering this outgoing the flat increase of Rs. 150/ in the category of Draughtsman and Rs. 100/ in the case of the other categories would be fair.

" It will be noted that the pay scales of different categories were being restructured, and the flat increase envisaged there related to an increase in the general pay scales of different categories.

Individual workmen were not present to the mind of the Tribunal.

That the increase was pertinent to the general pay scales in the revised wage structure is patently clear from a comparison of the existing pay scales and the revised pay scales.

The comparative table of existing pay scales and the revised pay scales has been reproduced earlier.

The revised pay scales of all categories, except the category of Draughtsmen, shows an increase of Rs. 100/ in the initial pay fixed in each scale, the increase in the case of the category of Draughtsmen being Rs. 150/ .

There was only one increase contemplated in the award, in paragraph 23 of award, and it is more than plain that the increase was the one incorporated in the revised pay scales pertaining to different categories.

No second flat increase was envisaged at all.

The amendment made by the Tribunal has the effect of providing a second increase, this time to each individual workmen.

If, as the Tribunal has stated in the amendment order, the increase in paragraph 23 was intended to apply to each individual workmen, there is nothing in the body of the award to form the foundation on which the actual figures in the restructured pay scales can be made to rest.

There will be no explanation why the initial start of the revised pay scales has been increased by Rs. 150/ in the case of the category of Draughtsmen and Rs. 100/ in the case of other categories.

Considering the fitment of the workman in the revised scales, it was stated in the award that a workman found drawing a salary less than the beginning of the grade would be stepped up to the beginning of the grade and if his pay fell between two steps in the reclassified pay scales the basic pay was to be fixed at the step higher in the revised scale.

Conspicuous by its absence is any reference to a flat increase in the pay of an individual workmen.

Even when considering the range of permissible retrospectivity the Tribunal stated in the award: "In view of the revision of the wage scales, there would be consequent increase in the dearness allowance and the house rent allowance.

" 177 And the clinching circumstances of all is that the award was made on the basis that the overall financial load according to paragraph 33 of the award would be to the tune of about Rs. 5 lakhs.

It was that figure which the Tribunal had in mind against the backdrop of the gross annual figures when it made the revised pay scales retrospective from 1st January, 1976.

This liability taken with the liability accruing on the need to increase the salaries of the other staff determined the Tribunal 's deliberations in regard to the several features of the award, including the grant of increments related to completed periods of service, the expansion of the span from 15 years to 20 years for earning increments, and other benefits.

It cannot be the case of the Union that the figure of Rs. 5 lakhs mentioned in paragraph 33 of the award represented the result of adding a flat increase to the pay of each workman in addition to the benefits conferred by the revised pay scales and other awarded reliefs.

In its order of 22nd December, 1978, the Tribunal has referred to the statement (Exhibit C 51) filed by the appellant when called upon to indicate the increased financial burden apprehended by it.

The Tribunal has relied on this statement as evidence showing that the appellant knew that a flat increase of Rs. 150/ and Rs. 100/ was intended to each of the employees in the category of Draughtsmen and the other categories.

In so construing the statement, Exhibit C 51, the Tribunal has grievously erred.

It seems from a perusal of the document, Exhibit C 51, that it is a statement giving trial figures of the increased financial load on different bases.

On the basis that a sum of Rs. 150/ per month was added to the pay of each Draughtsman and a sum of Rs. 100/ was added to the pay of every other workman, who belonged to the Union staff, the financial load would increase to Rs. 9,22,032/ .

Likewise, if a flat increase of Rs. 100/ was given to individual workmen of all categories, including Draughtsmen, the increased financial load would total Rs. 7,64,256/ .

The statement then goes on to indicate that if a flat increase of Rs. 75/ per month were given to individual workmen of all categories the total increase would be Rs. 5,78,220/ .

Again, if the flat increase is Rs. 65/ per month to the individual workmen of all categories, the additional load would total Rs. 4,97,772/ .

Finally, on the basis that the individual Draughtsman would be given an increase of Rs. 75/ per month and the individual workmen of other categories Rs. 50/ per month, the additional load was calculated at Rs. 4,63,092/ .

It will be noted that the statement, Exhibit C 51, was prepared on the basis of the employees ' strength as in December, 1971.

A similar statement was prepared on the basis of the employees ' strength as in September, 1978.

These statements cannot be regarded as evidence 178 that the appellant was cognizant of the intention of the Tribunal to provide a flat increase to the pay of each workman.

The statement afforded an indication merely of what the additional financial load would be if a flat increase was given to the individual workman on the alternative basis set forth therein.

None of the alternatives was actually adopted by the Tribunal, because when the award was made the Tribunal proceeded instead to restructure the wage scales by the addition of Rs. 150/ in the case of the category of Draughtsmen and Rs. 100/ in the case of other categories to the initial pay in the wage scales pertaining to those categories.

The addition was integrated as a feature of the wage scales; it was not regarded as an addition to the pay of each individual workman.

It seems that the Tribunal was betrayed by a curious confusion in accepting the plea of the Union that a flat increase to the pay of each workman was intended in the original wage and, consequently, it fell into the error of amending the award.

The evidence contained in the award throughout provides incontrovertible proof that this flat increase was never originally intended in the award.

The amendment has resulted in the Tribunal making, as it were, a supplementary award, whereby a further relief is being granted beyond that granted in the original award.

The original award was completed and signed by the Tribunal, and it cannot be reopened now except for the limited purpose of Rule 31.

In travelling outside and beyond the terms of the original award, the Tribunal has committed a jurisdictional error.

Our attention has been drawn to what purports to be an endorsement by counsel for the appellant on the application dated 22nd December, 1978 filed by the Union before the Tribunal to the effect that the appellant would submit to whatever the Tribunal decided, and it is urged that the appellant is bound by the order made on the application.

It is an accepted principle that consent by a party cannot confer jurisdiction on a court.

What is without jurisdiction will remain so.

In the circumstances the order of 22nd December, 1978 is invalid so far as it amends paragraph 23 of the original award.

The corrigendum amending the award in consequence is liable to be quashed.

The second contention of the appellant is entitled to succeed.

I shall now consider Civil Appeal No. 2300 of 1979 filed by the workmen.

The only contention of the workmen is that the Tribunal should have fixed the dearness allowance in communion with the cost of living index.

It is wrong in principle, it is said, to provide a fixed dearness allowance.

Reliance was placed on The Hindustan Times Ltd., New Delhi vs Their Workmen where it was observed by this Court that dearness allowance should not 179 remain fixed at any figure but should be on a sliding scale in order to neutralise a portion of the increase in the cost of living.

Reference was also made to Bengal Chemical & Pharmaceutical Works Limited vs Its Workmen.

Now, it is not a universal rule that the dearness allowance should in all cases be correlated with the cost of living index.

The Tribunal, in the present case, considered the matter and found it sufficient and in accord with justice that the wage scales should be restructured with suitable increments provided therein.

It noted that dearness allowance was being granted by the appellant at 10% of the salary subject to a minimum of Rs. 50/ and house rent allowance at 30% of the basic salary.

Having regard to the not inconsiderable improvement in the level of the basic wage, it observed that there would be a consequent increase in the dearness allowance and house rent allowance.

In view of the increase so secured, the Tribunal rejected the suggestion that a slab system should be introduced in the dearness allowance or that there should be any other modification of the principle on which dearness allowance was being presently granted.

It declared that the cumulative effect of an improved 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 will have to be reopened and the entire basis on which it has been made will have to be reconsidered.

The award is a composite document in which the several elements of increased wage scales, larger increments, longer span of 20 years for earning increments, dearness allowance at 10% of the basic wage, besides several other benefits, have been integrated into a balanced 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.

Accordingly, the appeal filed by the workmen must fail.

In the result, Civil Appeal No. 2299 of 1979 is allowed in part insofar that the order dated 22nd December, 1978 of the Industrial Tribunal, Maharashtra Bombay is quashed to the extent that it modifies the original award dated 20th December, 1978, and the corrigendum made consequent thereto is also quashed.

Civil Appeal No. 2300 of 1979 is dismissed.

There is no order as to costs.

CHINNAPPA REDDY, J. We have had the advantage of perusing the judgment prepared by our learned brother Pathak, J. we agree with 180 him that Civil Appeal No. 2300 of 1979 should be dismissed.

We also agree with him that Civil Appeal No. 2299 of 1979 should also be dismissed in so far as it relates to the award dated December 20, 1978.

However, we do not agree with our learned brother that Civil Appeal No. 2299 of 1979 should be allowed in so far as it relates to the order dated December 22, 1978 of the Industrial Tribunal which purports to correct the award dated December 20, 1978.

In our opinion Civil Appeal No. 2299 of 1979 should be dismissed in its entirety.

We do not propose to give our reasons to the extent we are in agreement with Pathak, J. and we propose to state our reasons for the disagreement only.

It is needless to recapitulate all the basic facts which have been set out in the judgment of Pathak, J. The Award of the Industrial Tribunal was made on December 20, 1978.

On December 22, 1978 that is to say, two days after the Award was made and when everything must have been fresh to the minds of the Tribunal, the respective parties and their Advocates, the employees Union made an application under Rule 31 of the Industrial Disputes (Bombay) Rules, 1957 seeking a correction of an error, which it was claimed, had crept into the Award.

The application was as follows: "In the above reference your honour was pleased to pass an award on 20th December, 1978.

In the said award, Your Honour has observed, at the end of Para 22, 'In view of the increase that is being allowed in the basic pay, I do not propose to revise the existing scheme of Dearness Allowance '.

Further, it appears that the Tribunal intended to grant the increase of Rs. 150/ to each draughtsman and Rs. 100/ to all other workmen in their basic pay.

However, this is not clearly mentioned anywhere in the award due to accidental slip or omission.

The Union therefore prays the honourable Tribunal to clarify the position and correct the award accordingly".

On this application, the Advocate for the employer company made the following endorsement: "Submitted to whatever this Hon 'ble Tribunal desires to do".

Thereafter the Tribunal made an order on the same day in the following terms: "There can be no doubt that a flat increase of Rs. 150/ to each of the employees in the category of Draftsmen and 181 of Rs. 100/ to each employee in the other categories has been granted under my award.

The same has been made clear in paragraph No. 23, but it appears that the words "to each employee" after the figure "Rs. 150/ " were omitted.

Similarly, the same words "to each employee" after the figure "100" were omitted.

When the award is sent for publication, a necessary corrigendum be made in the award and the aforesaid words after the figures Rs. 150/ and Rs. 100/ be added.

The fitment has also to be done only after the flat increase is added to the present basic salary of each employee.

I do not think that any problem would arise for interpretation of the award.

Since the award has been already signed, I do not think anything further can be added to this award".

This order was made in the presence of Shri Manak Gagrat, Advocate for the Company and Shri N. P. Mehta, Advocate for the workmen.

The endorsement made on the application by the Advocate for the company does not indicate that the company had any objection to the award being corrected as sought by the employees union.

On the other hand the endorsement reads as if there was tacit agreement on the part of the Company to the correction sought by the union.

The order dated December 22, 1978 of the Tribunal also does not reveal that there was any opposition by the company to the application for correcting the award.

Even so we propose to examine whether the correction sought by the employees union was within the bounds of the authority of the Tribunal or whether it was in effect a fresh award.

The primary and basic question considered by the Industrial Tribunal, in making the award dated December 20, 1978 was the question of revision of the wage scales.

Implicit and intrinsically connected with the question of revision of the wage scales were the questions of fitment of employees into the wage scales and flat or ad hoc increase of salaries of workmen wherever considered necessary.

It cannot possibly be doubted that an Industrial Tribunal deciding upon the wage scales of the employees of an establishment would have full liberty to propose ad hoc increase of salaries as part of the revision of wages.

Nor can it be doubted that fitment into the revised pay scales is certainly a part of the revision of pay scales.

This in our opinion is 182 elementary and fundamental to the jurisdiction of the Industrial Tribunal in revising wage scales.

In the present case the Industrial Tribunal on a consideration of the material placed before it came to the conclusion that the company was in an undoubted position to bear the additional financial burden.

At the end of paragraph 15 of the Award, the Tribunal stated: "But there can be no doubt that the company can very well bear the additional burden.

The question is what should be the extent of such burden?" At the end of paragraph 18 of the award the Tribunal said: A" mere reading of Exhibit U 15 will immediately dispel the misgivings about the future of the present company.

For some years to come this is likely to be one of the few Consulting Engineers who will be securing major contracts".

Again in Paragraph 19 it was said: "I have no doubt that the present Company would be able to bear the additional burden for the years to come.

This is further borne out from the trading results of the Company for the year 1968 69 to 1977.

The profits have increased all along.

The copy of the letter dated July 23, 1973, alongwith the Annexures from the Company to the Director General, Posts & Telegraphs, Delhi (exhibit C 27) indicates the important projects the Company was handling in India and abroad, and the amount of foreign exchange earned and repatriated.

I will; therefore, proceed on the ground that the present Company can bear the additional financial burden".

Finally at the end of paragraph 21 the Tribunal said : In view of this position, the Company can easily bear some burden that might fall as a result of the upward revision of the wage scales.

The question is to what extent the relief should be given to the employees ?" After expressing himself in categoric terms about the capacity of the company to bear the additional financial burden, the Tribunal went on to say: "I only propose to modify the existing structure of the scales with flat increases in each category".

The Tribunal then considered the question whether Draftsmen should get a higher flat increase and the question whether the existing scheme of Dearness Allowance should be revised.

The Tribunal then observed: ". the flat increase of Rs. 150/ in the category of Draftsmen and Rs. 100/ in the case of the other categories would be fair".

Thereafter various other matters were considered and finally the Tribunal revised the wage scales in the manner already mentioned by my brother Pathak, J.

The question of "Fitment" was then considered in the following manner: 183 "34.

Fitment: If as on 1st January, 1976, an employee is drawing a salary less than the beginning of the respective grade, he should be first stepped up to the beginning of the grade.

If the pay of an employee does not coincide with any step in the revised pay scale, and falls between two steps in the reclassified pay scales, the basic pay of that employee shall be fixed at the step higher in the revised scale.

After fixing the salary of the employees in the scales as above, the employees should be given increments in the new scales as noted below: (i) Employees who have completed 5 years or more as on 1st January, 1976, 3 increments.

(ii) Employees who have completed 4 years of service as on 1st January, 1976, 2 increments.

(iii) All other employees with more than one year 's service shall be given one increment".

Now, if, without any flat or ad hoc increase of salary, the workmen were to be fitted into the revised scales of pay, it would obviously result in serious anomalous situations.

In the case of several senior employees, the revised scale would yield but a very small and almost a token increase in the size of the pay packet whereas the junior employees would get a large benefit.

While workmen raising industrial disputes for revision of wage scales are certainly minded about their future prospects in the matter of wages, they, surely would be more concerned with the immediate benefits according to them That was why the Industrial Tribunal thought that an all round flat increase of Rs. 150/ in the case of Draftsmen and Rs. 100/ in the case of other workmen was called for.

It was clearly so intended by the Tribunal as is evident from the reference to "flat increase of Rs. 150/ in the category of Draftsmen and Rs. 100/ in the case of the other categories".

Since there was to be a flat increase of Rs. 150/ and Rs. 100/ in the case of draftsmen and other workmen respectively, the revised wage scale had necessarily to commence with figures Rs. 150/ and Rs. 100/ above the existing wage scales.

Immediately after the award was pronounced, while the iron was still hot as it were, the employees apparently realised that the employer might take advantage of the circumstance that it was not clearly mentioned in the award that all the employees were to get additional pay of Rs. 150/ and Rs. 100/ respectively and might contend that the Tribunal had only revised the wage scales by increasing the salary on entry into the service and res 184 tructuring the scale of pay and never granted any ad hoc increase of salary to all employees.

Therefore, they filed an application before the Tribunal for correcting the award so as to bring out what was intended.

As it has now turned out what the employees apparently suspected the employer might contend, is precisely what the employer is not contending, though the employer did not choose to so contend before the Industrial Tribunal itself when the employees filed the application for rectification.

The application before the Tribunal was filed under Rule 31 of the Bombay Industrial Disputes Rules 1957, which is as follows: "A Board, Court, Labour Court, Tribunal or Arbitrator may, at any time, suo moto or on an application made by any of the parties concerned, may correct any clerical mistake or error arising from an accidental slip or omission in any proceedings, report, award or as the case may be, decision".

The omission of the words to each employee first after the figure Rs. 150/ and again after the figure Rs. 100/ was clearly an accidental slip or omission which the Tribunal was entitled to correct.

We are unable to see how it can be held to be otherwise.

We are not impressed with the submission of the learned counsel for the Company that the corrigendum was in effect a fresh award.

We, therefore, see no ground for quashing the order dated December 22, 1978 of the Tribunal.

The result of the foregoing discussion is that Civil Appeal No. 2299 of 1979 has to be dismissed in its entirety.

We have already indicated that we agree with our brother Pathak, J., that the appeal (Civil Appeal No. 2300 of 1979) filed by the workmen should also be dismissed.

While we find lot of force in the submission of Shri V. M. Tarkunde, learned counsel for the workmen that Dearness Allowance linked to cost of living index is ordinarily the best and the most scientific method of computing dearness allowance, it cannot always be said that an illegality warranting interference under Article 136 is committed if some other method is adopted.

The Tribunal has given satisfactory reason for adopting a different mode and we are not disposed to interfere with the award of the Tribunal.

In the result both the appeals are dismissed without any order as to costs.

ORDER In view of the opinion of the majority both the appeals are dismissed and there is no order as to costs.

S.R. Appeals dismissed.

Summary: Dismissing the appeals by special leave, the Court. ^ HELD: Per Pathak, J. (Krishna Iyer and Chinnappa Reddy, JJ.

Summary: concurring) (1) Having regard to the financial capacity of M/s. Tata Consulting Engineers, the appellant, and the material on the record and the various other considerations which prevailed with the Tribunal, the granting of revised wage scales is in order.

Summary: Although the wage scales were introduced as long ago as 1973 they were maintained at that level except for a slight revision some time thereafter.

Summary: No dearness allowance was paid until the beginning of 1977 and the house rent allowance also was introduced about that time.

Summary: The cost of living had gone on increasing from 1972 onwards and the dearness allowance and house rent allowances made no appreciable impact in neutralising the increasing cost.

Summary: During all these years, the appellant had continued to enjoy increasing profits; nonetheless the emoluments received by the workmen did not receive the impress of the appellant 's growing prosperity.

Summary: The Charter of Demands was presented by the Union in July, 1974 and when conciliation proceedings failed the State Government made a reference to the Industrial Tribunal in 1975.

Summary: The several considerations which prevailed with the Tribunal giving retrospectivity to the revised pay scales and referred to by it cannot be ignored.

Summary: [174C G] (2) It is not a universal rule that the dearness allowance should in all cases be correlated with the cost of living index.

Summary: The Tribunal, in the present case, considered the matter and found it sufficient and in accord with justice that the wage scales should be restructured with suitable increments provided therein.

Summary: It noted that dearness allowance was being granted by the appellant at 10% of the salary subject to a minimum of Rs. 50/ and house rent allowance at 30% of the basic salary.

Summary: Having regard to the not inconsiderable improvement in the level of the basic wage, it observed that there would be a consequent increase in the dearness allowance and house rent allowance.

Summary: It declared that the cumulative effect of an im 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.

Summary: It was open to the Tribunal to adopt the position which it did.

Summary: If the dearness allowance is linked with the cost of living index the whole award will have to be reopened and the entire basis on which it has been made will have to be reconsidered.

Summary: The award is a composite document in which the several elements of increased wage scales, larger increments longer span of 20 years for earning increments, dearness allowance at 10% of the basic wage, besides several other benefits, have been integrated into a balanced arrangement in keeping with what the Tribunal has found to be the financial capacity of the appellant.

Summary: It is not possible to maintain one part of the award and supersede another.

Summary: [179 E F] The Hindustan Times Ltd, New Delhi vs Their Workmen, [1964] 1 SCR 234, 247 and Bengal Chemical & Pharmaceutical Works Limited vs its Workmen; , , distinguished.

Summary: (3) The jurisdiction given to the Tribunal by rule 31 of the Industrial Disputes (Bombay) Rules, 1957, is closely circumscribed.

Summary: It is only a clerical mistake or error which can be corrected and the clerical mistake or error must arise from an accidental slip or omission in the award.

Summary: An accidental slip or omission implies that something was intended and contrary to that intention what should not have been included has been included or what should have been included has been omitted.

Summary: It must be a mistake or error amenable to clerical correction only.

Summary: It must not be a mistake or error which calls for rectification by modification of the conscious adjudication on the issues involved.

Summary: [175 A C] Per contra The order of 22nd December, 1978 is invalid so far as it amends paragraph 23 of the original award.

Summary: The amendment has resulted in the Tribunal making, as it were, a supplementary award, whereby a further relief is being granted beyond that granted in the original award.

Summary: The original award was completed and signed by the Tribunal, and it cannot be reopened now except for the limited purpose of Rule 31.

Summary: In travelling outside and beyond the terms of the original award, the Tribunal has committed a jurisdictional error.

Summary: The evidence contained in the award throughout provides incontrovertible proof that this flat increase (ad hoc) was never originally intended in the award.

Summary: There was only one increase contemplated in the award, in paragraph 23 of the award and it is more than plain that the increase was the one incorporated in the revised pay scales pertaining to different categories.

Summary: No second flat increase was envisaged at all.

Summary: The amendment made by the Tribunal has the effect of providing a second increase, this time to each individual workmen.

Summary: If, as the Tribunal has stated in the amendment order.

Summary: the increase in paragraph 23 was intended to apply to each individual workmen, there is nothing in the body of the award to form the foundation on which the actual figures in the restructured pay scales can be made to rest.

Summary: There will be no explanation why the initial start of the revised pay scales has been increased by Rs. 150/ in the case of the category of Draughtsmen and Rs. 100/ in the case of other categories.

Summary: Considering the fitment of the workmen in the revised scales, it was stated in the award that workman found drawing a salary less than the beginning of the grade would be stepped up to the beginning of the grade and if his pay fell between two steps in the reclassified pay scales the 168 basic pay was to be fixed at the step higher in the revised scale.

Summary: Further the award was made on the basis that the overall financial load according to paragraph 33 of the award would be to the tune of about Rs. 5 lakhs.

Summary: It was that figure which the Tribunal had in mind against the backdrop of the gross annual figures when it made the revised pay scales retrospective from 1st January, 1976.

Summary: [176 D G, 177A, 178 D F] The statement, Exhibit C 51 afforded an indication merely of what the additional financial load would be if a flat increase was given to the individual workmen on the alternative basis set forth therein.

Summary: None of the alternatives actually adopted by the Tribunal, because when the award was made the Tribunal proceeded instead to restructure the wage scales by the addition of Rs. 150/ in the case of the category of Draughtsmen and of Rs. 100/ in the case of other categories to the initial pay in the wage scales pertaining to these categories.

Summary: The addition was integrated as a feature of the wage scales, it was not regarded as an addition to the pay of each individual workmen.

Summary: [178A C] It is an accepted principle that consent by a party cannot confer jurisdiction on a court.

Summary: What is without jurisdiction will remain so.

Summary: [178 E F] Per O. C. Reddy, J. (Majority view, Iyer and Reddy, JJ.) The order dated December 22, 1978 of the Industrial Tribunal which purports to correct the award dated December 20, 1978 cannot be considered in effect to be a fresh award and it is in order.

Summary: The omission of the words "to each employee" after the figure Rs. 150/ and again after the figure Rs. 100/ was clearly an accidental slip or omission which the Tribunal was entitled to correct.

Summary: The application for the correction was made immediately, that is to say, two days after the Award, while iron was still hot or when everything must have been fresh to the minds of the Tribunal.

Summary: Even the endorsement made on the application by the Advocate for the Company to the effect "submitted to whatever this honourable Tribunal desires to do, does not indicate that the Company had any objection to the award being corrected as sought by the employees union.

Summary: On the other hand the endorsement reads as if there was tacit agreement on the part of the Company to the correction sought by the union; it cannot possibly be doubted that an Industrial Tribunal deciding upon the wage scales of the employees of an establishment would have full liberty to propose ad hoc increase of salaries as part of the revision of pay scales, not can it be doubted that fitment into the revised pay scales is certainly a part of the revision of pay scales.

Summary: This is elementary and fundamental to the jurisdiction of the Industrial Tribunal in revising wage scales.

Summary: If without any flat or ad hoc increase of salary the workmen were to be fitted into revised scales of pay, it would, obviously, result in serious anomalous situations.

Summary: In the case of several senior employees, the revised scale would yield but a very small and almost a token increase in the size of the pay packet whereas the junior employees would get a large benefit.

Summary: While workmen raising industrial disputes for revision of wage scales are certainly minded about their future prospects in the matter of wages, they, surely would be more concerned with the immediate benefit accruing to them.

Summary: That was why the Industrial Tribunal thought that all round flat increase of Rs. 150/ in the case of Draughtsmen and Rs. 100/ in the case of other workmen to each employee was called for.

Summary: [180C, 181D E, G H, 182A, 183D E, G H, 184A B] 169 (4) While it is true that Dearness Allowance linked to cost of living index is ordinarily the best and the most scientific method of computing dearness allowance, it cannot always be said that an illegality warranting interference under Article 136 is committed if some other method is adopted.

Summary: In the instant case, the Tribunal has given satisfactory reasons for adopting a different mode.

Summary: [184 F G]


Appeal No. 251 of 1963.

Appeal by special leave from the judgment and order dated March 20, 1957, of the Patna High Court in Civil Revision No. 40 of 1956.

M. C. Setalvad, and R. C. Prasad, for the appellants.

The respondent did not appear.

March 24, 1964.

The short question which arises in this appeal is whether the term "wages" as defined by section 2(vi) of the (No. 4 of 1936) (hereinafter called 'the Act ') includes wages fixed by an award in an industrial dispute between the employer and his employees.

This question has to be answered in the light of the definition prescribed by section 2(vi) before it was amended in 1958.

The subsequent amendment expressly provides by section 2(vi) (a) that any remuneration payable under any award or settlement between the parties or order of a Court, would be included in the main definition under section 2(vi).

The point which we have to decide in the present appeal is whether the remuneration payable under an award was not already included in the definition of wages before the said definition was amended.

It is common ground that between the appellant, Sasamusa Sugar Works Ltd., and its workmen, the respondents, an award had been made by an Industrial Tribunal fixing the pay of the employees at Rs. 2/2/ per day, and in pursuance of the said award, the management of the appellant had entered into an agreement with the respondents that effect would be given to the wage structure, prescribed by the said award.

This agreement was subsequently published in the Bihar Gazette as a part of the award.

In spite of the award and the agreement, the appellant paid its employees only As.

/ 10 / per day and that led to the present claim made by the respondents under section 15 of the Act.

The respondents contended before the payment of wages authority that the refusal of the appellant to pay to them wages at the rate awarded, in substance, amounted to an illegal deduction from their wages and on that basis, they asked for an order from the authority directing the appellant to pay to the respondents the said prescribed wages.

The appellant raised two pleas against the respondents ' claim.

It urged that section 15 of the Act was inapplicable, because the rates of wages fixed by the award did not fall within the definition of wages prescribed by section 2(vi) and it also argue,, that the claim of the respondents was barred by limitation.

421 The authority has found that section 2(vi) includes wages prescribed by the Industrial Tribunal, and so, it has rejected the appellants ' contention that the applications made by the respondents were incompetent under section 15 of the Act.

In regard to the question of 'limitation, the authority did not decide the said question as a preliminary question, because it held, and, in our opinion, rightly, that it was a mixed question of fact and law, and so, it had to be tried after recording evidence.

The appellant challenged the correctness of the conclusion of the authority that the applications made by the res pondents were competent under section 15 of the Act before the Patna High Court by filing a petition under article 226 of the Constitution.

The High Court has affirmed the finding of the authority and held that section 15 was applicable to the case, because the wages prescribed by the award did amount to wages as defined by section 2(vi) of the Act.

On that view, the writ petition filed by the appellant was dismissed.

It is this order which the appellant seeks to challenge before us by its present appeal by special leave.

Section 2(vi) as it stood at the relevant time, provides, inter alia, that wages means all remuneration, capable of being expressed in terms of money, which would, if the terms of the ,contract of employment, express or implied, were fulfilled, be payable.

Mr. Setalvad for the appellant contends that before it is held that the wages prescribed by the award fall under section 2(vi), it must be shown that they constitute part of the terms of the contract of employment, either express or implied.

The terms in question need not be express and can be implied; but they must be terms which arise out of the contract of employment, and since an award made by an Industrial Tribunal cannot be said to amount to a contract of employment, the wage structure prescribed by the award cannot fall within the definition prescribed by section 2(vi).

That, in brief, is the substance of the argument raised by the appellant.

We are not inclined to hold that even under the unamended definition of wages, rates of remuneration prescribed by an award could not be included.

In dealing with the question of construing the unamended definition of the term "wages", it is essential to bear in mind the scope and character of the powers conferred on Industrial 'Tribunals when they deal with industrial disputes under the provisions of the Indus trial Disputes Act.

It is now well settled that unlike ordinary civil courts which are bound by the terms of contract between the parties when they deal with disputes arising between them in respect of the said terms, Industrial adjudication is not bound to uphold the terms of contract between the employer and the employees.

If it is shown to the satisfaction of Industrial adjudication that the terms of contract of employment, 422 for instance, need to be revised in the interests of social justice. it is at liberty to consider the matter, take into account all relevant factors and if a change or revision of the terms appears to be justified, it can, and often enough it does, radically change the terms of the contract of employment.

The development of industrial law during the last decade bears testimony to the fact that on references made under section 10(1) of the Industrial Disputes Act, terms of employment have constantly been examined by industrial adjudication and wherever it appeared appropriate to make changes in them, they have been made in accordance with the well recognised principles of fair play and justice to both the parties.

Therefore the basic assumption made by Mr. Setalvad in contending that section 2(vi) cannot take in the wages prescribed by the award, is not well founded.

When an award is made and it prescribes a new wage structure, in law the old contractual wage structure becomes inoperative and its place is taken by the wage structure prescribed by the award.

In a sense, the latter wage structure must be deemed to be a contract between the parties, because that, in substance, is the effect of industrial adjudication.

The true legal position is that when industrial disputes are decided by industrial adjudication and awards are made, the said awards supplant contractual terms in respect of matters covered by them and are substituted for them.

That being so, it is difficult to accede to the argument that the wages prescribed by the award cannot be treated as wages under section 2(vi) of the Act before it was amended.

The amendment has merely clarified what, in our opinion, was included in the unamended definition itself.

In this connection,we may incidentally refer to the decision of this Court in the South Indian Bank Ltd. vs A. R. Chacko(1), where it has been observed by this Court that the very purpose for which industrial adjudication has been given the peculiar authority and right of making new contracts between employers and workmen makes it reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties may elapse in respect of both of which special provisions have been made under sections 23 and 29 respectively the new contract would continue to govern the relations between the parties till it is replaced by another contract.

This observation clearly and emphatically bring out that the terms prescribed by an award, in law, and in substance, constitute a fresh contract between the parties.

This question appears to have been considered by the Bombay and the Calcutta High Courts.

In Jogendra Nath (1) A.I.R. 1964 S.C. 15.

423 Chatterjee and Sons vs Chandreswar, Singh(1), the Calcutta High Court appears to have taken the view which supports Mr. Setalvad 's argument, whereas in the Modern Mills Ltd. vs V. R. Mangalvedhkar(2), and in V. B. Godse, Manager, Prabha Mills Ltd., vs R. M. Naick, Inspector, under the Payment of Wages Act(3), the Bombay High Court has interpreted section 2(vi) to include wages directed to be paid by industrial adjudication.

In our opinion, the Bombay view correctly represents the true legal position in the matter.

The result is, the appeal fails and is dismissed.

The matter will now go back to the authority under the Act for disposal in accordance with law.

There would be no order as to costs.

Appeal dismissed (1) A.I.R. 1951 Cal. 29.

(2) A.I.R. 1930 Bom.

Summary: In pursuance of an award made by an Industrial Tribunal fixing the pay of the employees at Rs. 2/2/ per day, the management of the appellant had entered into an agreement with its workmen, that the effect would be given to the wage structure prescribed by the said award.

Summary: /10/ per day and that led to the present claim made by the respondents under section 15 of the Payment of Wages Act.

Summary: They asked for an order from the payment of wages authority directing the appellant to pay the said prescribed wages.

Summary: Against the respondent 's claim it was urged by the appellant that section 15 of the Act was inapplicable, because the rates of wages fixed by the award did not fall within the definition of wages prescribed by section 2(vi) of the Act.

Summary: The authority rejected the appellant 's contention.

Summary: The appellant then challenged the correctness of the conclusion of the authority before the High Court under article 226 of the Constitution.

Summary: The High Court dismissed the writ petition and affirmed the finding of the authority.

Summary: It held that section 15 was applicable to the case, because the wages prescribed by the award did amount to wages as defined by section 2(vi) of the Act.

Summary: On appeal by Special Leave the appellant contended that before it is held that the wages prescribed by the award fall under section 2(vi), it must be shown that they constitute part of the terms of the contract of employment, either express of implied.

Summary: Held: The argument is not well founded.

Summary: In a sense, the latter wage structure must be deemed to be the contract between the parties, because that, in substance, is the effect of industrial adjudication.

Summary: The true legal position is that when industrial disputes are decided by industrial adjudication and awards are made, the said awards supplant contractual terms in respect of matters covered by them and are substituted by them.

Summary: That being so, it is difficult to hold that the wages prescribed by the award cannot be treated as wages under section 2(vi) of the Act before it was amended.

Summary: The amendment has merely clarified what was included in the unamended definition itself.

Summary: South Indian Bank Ltd. vs A. R. Chacko, A.I.R, 1964 S.C. 1522, referred to.

Summary: Jogindra Nath Chatterjee and Sons, V. Chandreswar Singh, A.I.R., , inapplicable.

Summary: Modern Mills Ltd. vs V. R. Mangalvedhikar, A.I.R., 1950 Bom.

Summary: 342 and V. B. Godse, Manager, Prabha Mills Ltd. vs R. M. Naick , approved L/P(D)lSCI 14(a) 420