After the 2nd World War broke out the industrial employees at Ahmedabad, who had organised themselves as the Textile Labour Association (Respondent herein) raised a demand for payment of dearness allowance to meet the cost of living which had shot up as a -result of the War, and the demand became the subject-matter of arbitration and .:in award by the Industrial Court at Boµibay. As a result of petitions filed by the Parties· and references made to it, the Industrial Court had been giving directions, from time to time, regarding the payment of dearness . allowance awarded, on the basis of cost of living index number, %-1th 1926-27 as the base year. In the Second Five Year Plan, the Planning Commission recommended that the series of cost of living indices should be revised, and accordingly, the L'libour Bureau and the Central Statistical Organisation of the Government of India undertook family liYing surveys in 1958-59. One of the centres chosen was Ahmedabad and the Govornment of India began ·to publish consumer price index number for the city of Ahmedabad from 1960 with 1960 as the b.Se year. The Government of India also advised the State Government to remove various anoma1ies ~n the State series of the 'price index number and publish a new series linking the State series with that of Government of India, with 2.98 as the linking factor. The 1 Government of Gujarat set up an expert Committee to advise it on the question and. that Committee made reconlmendations for the removal of anomalies and also suggested 3.17 instead of 2.98 as the linking factor. In November 1963, the Government accepted the re· commendations for removing the anomalies and adjusted the consunler price index nfunber, and the appellants paid the dearness allowahce according to the adjusted consumer price index· number under protest. In February 1964, the Government of Gujarat announced its decisiqn-. -to adopt the linking factor at 3.17. The appellants were. ,not willing 'to pay dearness allowance according to the converted price in'dex number in spite of· a representation by the employees, and, S'6, 11ie dispute \Vas referred to the lndUS1trial Court under s. 73 of the Bombay Industrial Relations Act, 1946. The Industrial Court decided tht ihe appellants should pay dearness allowance to their employees for .fhe month of March 1964 am! for subsequent months on the consumer price index numbers for Abmeaabad published by the State Government since February 1964 by using the index numbers in the series for Ahmedabad compiled by the Labour B'ureau at Simla, and the linking factor of 3.17 adopted for linking that series to the State series with the old base, and gave directiOns as to the manner of paying the dearness allo\vance. In their appeal to this Court, the appellants contended that : ( i) the reference was invalid because, before making the reference to re· quirements of s. 42, which prescribes the procedure which has to be followed by the employer or the eillployee if either of them wants a ch:inge
