Management of the Kirlampudi Sugar Mills Ltd. versus Industrial Tribunal, A.P. & Anr.

¶1

428

¶2

MANAGEMENT OF THE KIRLAMPUDI SUGAR MILLS A. LTD.

¶3

v.

¶4

INDUSTRIAL TRIBUNAL, A.P. & ANR.

¶5

August 26, 1971

¶6

[G. K. MITTER, C. A. VAIDIALINGAM AND P. )AGANMOHAN REDDY, JJ.]

¶7

"-,

¶8

Industrial D'ispute-Recommendations of Central Wage Board for sugar whether vitiated by fact tha1 it had 'fixed uniform wages region ~i$e without further classification within each regidn-Tribunal's jurisdictio" to go into question of financial cupacity of cq"tnpqny to implenient recommendations of Wage Board--Con1pany whether .. had financial capacity,

¶9

·The Kirlampudi Sugar Mills Ltd. was started in !951 as a small unit and later was increased to a ]arger c!rush(ng capacity of 1000 tons. BY 1963" the factory got into financial embarTassment. In the middle of that year the present managemen:t took over the factory~ on the specific assur .. ance of the Government that tey would provide for 3nd give all facilities to enable them to run the factory. After the management was taken over there were disputes between the management and workers with the result that they referred various matters for adjudication incWding the claim for implementation of the recon1mendations of the Central \Vage Board for sugar. The disputed items related to categorisation of workers their fitments, fixation of work load, the demand. for increase of Rs. 10 to be given to every v.·orke·r over the basic wage implementation of weightage, dearness allowance. the demand for giving grades and for giving retrospective effect etc. On issue No. IA the Tribunal held that categorisation of workers and their fitments and work load should ~ in accordance with the recommendations of the Wage Board; it deciC.ed in favpur of the management in respect of certain categories of workers but in respect of some others it gave relief to the workers. The Tribunal furiher heltl in respect of isue 2 and 5 before it that the financial capacity of the Appellant was not such as to justify an increase of Rs. IO to,all the workers over the basic wag.e and dearness allowance or the payment f Rs. 5 to workmen for implementation of the weightage recommended by e Wage Board. Appeal No. 1602 of ,.! \166 was filed in this Court by special leave bv the management 3.gainst tlle Award of the Tibunal in respect of issue !A in so far as it went against them. Appeal No. 1603 of 1966 was filed by the workers against the Tribunal's decision 9n issues 2 and 5 and that part of issue tA which went against them. The questions ttiat fell for consiera tion were : (i) whether the recommendations of th€ Wage Board were vitiated by the fact that they had fixed the wages uniformly region-wise without further classification·within each region: (ii) If they were valid, whether the Tribunal could go into the auestiofl of the financial capacity of the company to implement them; (iii) whether the company had the financial capacity to implement the recon1mendations. ·

¶10

HELD : The Wage Board following the principles' laid down by this Court has considered the capacity of the industry region-wise and has also fixed wages different from region to region having regard to the difference in the capacity of the Industry region-wise. Further it' has given good reason for not furnishing: a criteria for further classification of the industry within the region. In these circumstances prescribing the same wage ,for all units of industry in the sam.e region was justified ·and the fact that the

B

c

D

E

F

G

H

.,

429

KIRLAMPUDI SUGAR MILLS V. IND, TRIB.

¶22

(Jaganmohan Reddy, J.)

¶23

industry in the region had not been dlvicled into classes could not vitiate the recommendation of the Wage Board, [441 F-G]

¶24

Workmen of Sltri Bajrang Jute Mills Ltd, V. Employers of Sh1·i Bajrang .lute Mills Lid., [1969] 2 S.C.R. 593, explained and distinguished.

¶25

Express Newspaper (P) Ltd. v. Union of India & Ors., [1959] S.C.R. 12 and French Motor Car Co. Ltd. v. Workmen, [1963] Supp. 2 S.C.R. 16, B referred to

¶26

However, notwithstanding the fact that a fair wage has been fixed by the Board which would be applicable to all the units in the region for which wage has been fixed, it may be open to any particular unit to plead that in fact its financial position is not such that it can bear the burden of implementing the recon1mendations. ~he justification of the plea of want of financial capacity will depend upon the evidence of its financial position ·C over a period of years, to show that it cannot bear the burden or that it is only a temporary or fortuitous situation \t'ith every po:.sibility of financial improvement in the immediate future [442 E; 443 CJ

¶27

Ahmedabad Mill Owners' Association. etc. v. Textile Labour As ... ociation, 1.1966] I S.C.R. 382, relied on.

¶28

The Appellant's balance sheets for the years 1960 to 1970 for a period D of JO years showed that except for the year ending 30-6-69 the compan) was not in a position to declare any dividends. Though the factory appeared to ha\·e been expanded after 1964 to 300 tons capacity it did not show uniform net profits; on the other hand losses continued. The profits that it made in any year seemed to be consumed by losses of the orevjous years. Various factors contributed to financial unsteadiness. [448 G-Hl

¶29

This being the position the Tribunal wi:' justified in holding that the E Appellant did not have the financial capacity to bear the. hurde.n of payment of Rs. 10 increase and Rs. 5 as V.'eightage in accordance with the recommendations of the Wage Board. On this .conclusion and also on an examination of the relevant material it was evident that the con1pany was not in a financial position to nleet the burden of iinplernenting the recommendations of the Wage Board. Despite this the company had in1plcmented the a\l,'ar<l in respect of a large number of workers both as to categorisation and fitmcnt except in regard to four categories. 'fhe clain1 of the ResF pondent workmen for categorisation and fitment in accordance with the Award in regard to these could not. in the circunl';tanccs. be accepted. [448 H-4i9 Gl

¶30

CAVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1602 and 1603 of 1966.

¶31

'G Appeals by special leave from the Award dated November 19. 1965 of the Industrial Tribunal, Andhra Pradesh, Hyderabad in l.D. No. 23 of 1965.

¶32

K. Srinivasamurthy, Naunit Lal and Swaranjit Sodhi for the appellant (in C.A. No. 1602 of 1966) and 'the respondent in C.A. No. 1603 of 1966).

¶33

H M. K. Ramamurthi and Vineet Kumar, for respondent No. 2 (In C.A. No. 1602 of 1966) and the appellant (in C.A. No. 1603 · o.f 1966). ·

¶34

9-L1340Sup.Cl/71

¶35

[1972] I S.C.K

¶36

SUPREME COURT REPORTS

¶37

430

¶38

A

¶39

The Judgment of the Court was delivered by

¶40

P. Jagamnohan Reddy, J. These are two appeals by Special Leave. Civil Appeal No. 1602 of 1966 is by the Management against the Award passed by the Industrial Tribunal on a reference made by the Government for categorisation of workers,. their fitments, fixation of work load, the demand for incpase of Rs. 10/- to be given to every worker over the basic wage, implementation of weightage, dearness allowance, the demand for giving grades and for giving re'trosp.ective effect etc. Civil Appeal No. I603 of 1966 by the Workmen is against the same Award for disallowing the increase of Rs. 10/- and the weightage of Rs. 51- and also against ithe fitment of certain categories of workers. The Tribunal held that the financial capacity of the Appellant was not such as to justify an increase of Rs. l 01- ito all the workers over the basic wage and dearness allowance. On ithe same grounds it also disallowed the payment of Rs. 51- to workmen for implementation of the weightage pcommended by the Wage Board for Sugar Industry. These were the subjeot matter of issue 2 and 5 of the reforence made to the Tribunal. So far as issue IA is concerned, it held that categorisation of workers and their fitments and work load should be in accordance with the recommendations of the Wage Board for Sugar and even as to these it decided in favour of the management in respect of certain categories of workers but in respect of some others, it gave relief to the workers. The employers appealed against that part of issue IA which was decided against 1th.em, while the Workmen's Appeal is against the finding of issues 2, 5 and part of IA which was against them. We will first take up the appeal of the Management.

¶41

It appears that the Kirlampudi Sugar factory was started in I95I as a small unit and later was increased to a larger crushing capacity of 1,000 tons which according to the Tariff Commission would not be considered economically profitable, though according to the Sugar Wage Board H would be. By 1963 the factory got into financial embarrassment as it had to pay heavy debts to the Government on account of Sugar cess, cane prio~ payable to the growers and Income-tax. These demands it is alleged practically brought 1the factory to a stop, when in the middle of G 1963 the present management took over the factory on the specific assurance from the Government that they will provide for and give all facilities to enable them ito run the factory. After the inana.rement was taken over there were disputes between the Management and workers with the result that they referred various ma'tters for adjudication including the claim for implemcntation of the wage Board's recommendation which was alleged to have been implemented by the former management as early as 1961-62. It was the case of the workers that that implementa•

B

C

D¹

E

F

H

KIRLAMPUDI SUGAR MILLS v. IND. TRIB.

¶49

431

¶50

(Jaganmohan Reddy, J.)

¶51

A

¶52

tion was not satisfactory and it was their demand that the sugar wage board's recommendations should be implemented. The management raised a specific objection before the Industrial Tribunal that the reference relates to a wholesale promotion of workers from one grade to the other under the guiw of frtment under the Wage Board's recommendations which is illegal and B without jurisdiction; and in any case the question of promotion, categorisation and fitment is a managerial function in which !he Tribunal cannot interfere unless it can be es1ablis!r.,d that the management acted mala fide or it resorted to unfair practices. It was further pleaded that the factory had not the financial capacity to implement the demand. One of the grievance of the c Appellant was that though the Tribunal found that it had not the financial capacity to meet the additional burden of the demands made by the workm~n rt granted large scale promotions which it had no jurisdiction to grant. Despite this the inanagement states •that it had implemented the Award in most of the cases and challenged it in respect of some only.

¶53

D

¶54

It may be mentioned that the Central Wage Board for Sar was appointed in terms of paragraph 25 of Chapter XXVII of the Second Five Year Plan. This Wage Board for Sugar Industry divided India into 4 regions and each region included every State containing even a single unit unlike that adopted by the Tariff Commission which in its Report on the cost structure left E out some of the States from the 4 divisions. It then considered' the wage structure, categorisation etc. for each of the snid regions, in relation to a fair cross-S".ction of the Industry in each of the regions. In comparison with this method, the Jute Wage Board had taken India as a whole and fixed a uniform rate for the Jute industry. The first contention which has been urged is F that the recommendations of the Wage Board were not binding in view of the fact that it was not a statutory board but was only a recommendatory one and 1ho Tribunal could not implement them as a whole because it had recommended that fitments and categorisation should be affected by recourse to Tripartite machinery. The case of Workmen of Shri Bajrang Jute Mills Ltd., v. Employees of Shri Bajrang Jute Mills Ltd. (1), is cited as an G authority for the proposition that as the procedure prescribed therein was not valid, the r1:9ommendations of the Wage Board were declarec! to be invalid and inapplicable to the Jute Industry. The learned Advocate on behalf of the Respondents raised a preliminary objection to the maintainability of this contention as thi< issue had neither been referred to the Tribunal, nor has it H been urged before it nor had a ground been taken in the Special Leave Pe.titian. He seeks to distinguish the case of the Bajrang

¶55

(I} [1969] 2 S.C.R. 593.

¶56

[1972] l S.C.R

¶57

SUPREME COURT REPORTS

¶58

432

¶59

Mills, as in that case there was a specific issue while there is n9ne in this case. In answer it is pointed out that the contention raised Qn behalf of the Respondents is implicit in issue 1 (a) which is <is follows :

¶60

1 (a) "Whether the demand for categorisation of workers and their fitment and work load should be in accvrdance with the recommendations of the Wage Board for Sugar industry is justified".

¶61

The Appellant had in its sta!tement before the Tribunal in para 9 categorically challenged the recommendations of the Wage Board in these words : "It may be noticed even though the Wage Board recommendations are not binding, in spite of huge losses the management went out of the way and implemented the same". In the Special Leave Petition also in paragraph 2 ilie Appellant had challenged the jurisdiction of the Tribunal "to go into the question of the capacrty to pay of an individual unit in respect of one of the recommendations of the Wage Board for Sugar industry when such recommendations had been made for-the industry as a whole and agreed ·to by the Management itsel".

¶62

It is •therefore contended that if the financial capacity is taken into account for placing fitments on the basis of Bajrang Jup~ Mills, no other question arises. In the Bajrang Milis case(1) it was held that fixation of fair wage depends on the financial capacity but once when the Tribunal had held that the Appdlant did not have the financial capacity the categorisation and fitments directed by H in its Award are invalid. The Tiibunal is concerned with the implem~ntation of the Wage Board recommendation forgetting that it cannot do so when the implementation of those recommendations relating to categorisation and fitment cannot be effected without recourse to the Tripartite machinery. It is also contended 1hat categorisation and fitment is a managerial fonction and requires technical knowledge of the various duties antl functions which each of the category of workmen haw to discharge. The following contentions have been urged, J:'.ll11Cly :

¶63

(I) The Wage Boartl recommendations having regard to tl1e •:asc cf Bajrang Jute Mills are invalid and cannot be en- forcect. inasmuch as it has fixed a uniform wage for •the .entir~ region without further dividing the industry in the region i:no classe' of units according to their capacity namely region-cuminciustry for fixation of th·~ wage structure for 1hose classes of units. At any rate since what is prescribed in the r.port is only r•cc01rnnendatory, unless there is a capacity to pay, no on cJn claim iis implementa1ion as of right. -IT)ff9~iJJ 2Tc.1t 593.

A

B

c

D

E

F

G

H

KIRLAMPUDI SUGAR MILLS V. IND. TRIB.

¶73

433

¶74

(Jaganmohan Reddy, !.)

¶75

A ( 2) The Appellant has not the financial capacity to implement the Award which has been held by the Tribunal to be a fact. On this score itself it cannot implement the Award.

¶76

( 3) Jn para 263 of the Wage Board recommendation of J 960 that when th<re is a difference between management and . labour reoarding frtment the Tripartite machinery should be B brou£ht ito existence. The Tribunal was wrong in thinking that the Wage Board was giving an example of border-lines cases where there may be a difference of opinion and it is only in those cases that the Tripartite machinery in the case of fitment is to be resorted to.

¶77

( 4) Fitment is a managerial function and unless the Tribunal c finds that the Act of •the manag.~ment is ma/a fide or it has resortco to unfair practices it is not justified in interfering with the fitments effected by the management.

¶78

( 5) In any case in respe~t of certain specific fitments the Tribunal was in error and acted without evidence.

¶79

D Before dealing with these contentions it is necessary to consider the preliminary objection rais-d on behalf of the Respondents that before the Tribunal the Appellant did not object to the implementation of the Wage Board on the ground that its recommendations were not industry-cum-region wise or that it had not divided the industry into various classes and fixed a wage E for those classes in that region, and in any case no such issue was referrecJ to the Tribunal unlike in th· Bajrang Jute Mills case('). In that case what was referred to the Tribunal was whether the demand of the workmen in Shree Bajrang Mills Ltd., for implementation of the recommendations of the Central Wage Board for Jute Industry is justified, and if so, to what extent. In this case issue IA did not specifically raise an objection to the F implementation of the Sugar Wage Board's recommendations in general terms but issues 1, 2, 4, 5 & 6 did raise the question whether¹ the Board was justified in its recommendations regarding categorisation of workers, fitment, increase of Rs. IOI- ro every worker over the basic wage, dearness allowance, the minimum wage, the demand for fixation of work-load and the demand G for implementation of weightage. Apart from this a question seems to have been raised that the Tribunal could not implement the Wage Board recommendations because it had envisaged the implementation of the categorisation etc. through the Tripartite machinery, as such as Tribunal had no jurisdiction to implement it. It would appear from ithe Award that the learned Advocate H for the Appellant had challenged the jurisdiction of the Tribunal to fix the workload or undertake the fitments in view of the recommendations in paragraph 263 of the Wage Board's report tn (10691 2 s.c.R. 593.

¶80

[1972J 1 s.c.R.

¶81

SUPREME COURT REPORTS

¶82

434

¶83

A

¶84

that fi'tments have to be effected by the Tripartite machinery to be appointed by the Government. Even in the startement of claim filed on behalf of the management it was said that though the Wage Board's reco=endations are not binding in spite of the huge losses the management went out of the way and implemented the same. The fact that rt was said that the Wage Board recommendations are not binding is pressed into service to support the contentions that the validity of the reco=endations of the Wage Board was challenged. While we are inclined to ,gree with the submission of the learned Advocrute for the RespoJJd.ents that nowhere except in the statement of the case before this Court has a specific plea that the reco=endations of 1the Wage Board not being in accordance with the well accepted principles laid down by this Court in the several cases to which reference has been made cannot be implemented and on that account · the Tribunal has no jurisdiction to implement those recommendations it may nonetheless be pointed ou1 that issue IA and other i$sues in terms challenge the implementation of the reco=endations. Even if we permit the learned Advocate for the Appellant-and we think there is justification for it-to challenge the Wage Board's reco=endations generally, for reasons which we will presently give, those reco=endations do not suffer from any vice but on the other hand the Board has fixed a fair wage for the industry in accordance wi1h the principles laid down by this Court.

¶85

Since a good deal of argument is based on the reco=endations of the Wage Board it may be profitable to examine generally the factors which were taken into consideration in fix.ing the wage structure for the industry. The Wage Board as has already been noticed adopted the method employed by the Tariff Commission by dividing the country into four zones or regions but unlike it included every State in each region which had even one unit. It further took these regions which were considered for fixation of price structure of sugar also for wage structure in this industry. In adopting this course the Wage Board took into consideration the seasonal nature and the duration, the -sucrose content of sugar cane and its yield which varies from rel(ion to region. It was noticed that the duration of seasons vary somewhat widely from area to area depending on the availability of cane and the year to year varirution. As a consequence -of some of the factories in the South owninl? their own sugar-cane farms while this is not so in the North, the Southern factories do not suffer from the handicap of Northern factories which have ro -get sugar cane from nearby growers depending on the conditions H of the crop in the vicinity which is not destroyed by pest or is unsuitable for anv o•her reason. for otherwi~e to ~ the sugar-cane from growers from Jong distance would involve transport

B

c

D

E

F

G

435

RIRLAMPUDI SUGAR MILLS V. IND. TRIB.

¶94

(laganmohan Reddy, l.)

¶95

A

¶96

costs. This disadvantage the Southern factories do not have. The quality of cane as detennined by the sucrose content varies from area to area depending on climatic conditions, in:ig,ation facilities and cane development aotivities. Factories in Maharashtra and to some extent those in the North enjoy these adventages. Their recovery percentage is higher than in the North. B Thus the average percentage of recovery of sugar in Maharash!tra was noted to be the highest as against ,those in U.P. and Bihar and also as compared with the All India average. The variation in the yield of cane per acre was also taken into consideration; for instance in Bombay it is much higher 1than in the North. The Board indicated the main factors responsible for vai,ation in c the yield of sugar cane in different regions due to : ( 1) Improved variety of cane; (2) irrigation facilities; (3) ecological faotors; and ( 4) improved methods of cultivation. The difference in the case of yield in 1the various areas has been one of the factors which the Board said had persuaded it to divide 1he country into four regions.

¶97

D

¶98

D Though the industry is rural based, it was stated the price of essential commodities in townships where sugar factories are located, did not vary appreciably from the urban areas. In spite of the urban amenities not being available in these factory areas, the Board noted that while the impact of the wages it worked out, on the economy of the coun¹ try has been taken into account, E it was not proper ro take agricultural wages as the prevailing rate of wages for comparison. Further it appeared to the Board that the Sugar industry was a highly regulated industry where the minimum cane price is fixed by the State and higher price depending upon the quality of the cane is to be paid according to the price linking formula laid down by the State and that even the ex-factory price for the finished product is fixed by the State F in the North and some other St~tes haw fixed prices at least for one of its by-products and molasses. The price 'fixation in the North it is observed has its effect on the price of sugar in the South where normally sugar cannot be sold for a price higher than fixed in ithe North plus the freight.

¶99

<G The Board also set out the procedure followed by it in ascertaining the financial capacity and profitability of the industry region-wise by calling for the balance-sheets of all the factories for a period . of 10 years and undertook detailed studies for 8 years beginning from 1951 which corresponds to the beginning of the First Five· Year Plan. However, out of the balance-sheets H of 118 Companies, balance-sheets for 8 years were available in respect of 8 7, 8 Companies supplied balance-sheets for 7 out of 8 years and among the rest balance-sheets were available for cne or more years. The Board thought 1that this data is fairly

¶100

<G

¶101

[ 1972] l s.c.R.

¶102

SUPREME COURT REPORTS

¶103

43;

¶104

A

¶105

well, if not absolutely, comparable from year to year. Where a Company owned two or more factories in the same State or region it was decided to consider only the combined balancesheets for the number of factories covered, because spliting the combined balance-sheets over the number of factories did not serve the end in view. However, where a Company had under its management two or more factories in different States but in 8· the same region, it was decided to exclude it from State-wise study and include it in the regional total. It also took into consideration some of the Companies which along with the sugar manufacture carried other manufacturing activities. Then it also applied the dividend tests, examined the main profitable ratio, considered the total dividend as coverage by paid up capital, compared c gross profits and tatal capital employed and profits and profitability in relation to per day crushing capacity from 1955-58. A region-wise analysis of financial data was made and the same was also distributed in different rangs of daily crushing capacity. In so far as South region is concerned in which the Appellant's unit is located it was observed that "the factories seem to have been D more or Jess evenly distributed among all the regions". Analysis of financial data region-wise was also made according to differenit crushing capacity ranges for each of the years 1955 to 1958 under differ.ent heads namely, gross profits, sales, total capital employed, profits after tax, ordinary dividend, ordinary paid up capital total dividends, total paid up capital, profits before tax, E taxation provision, retained profits and net worth.

¶106

8·

¶107

c

¶108

After taking into consideration the several factors in detail the conclusions of the Tribunal are summed up as unde~ :

¶109

(a) "the profit margin whether on sal'-!s or on total capital employed, or on the net worth does not appear to bear any set relationship increase or decreas.e consistently-with the size of the Company. The trends are mixed and irregular. This observation is equally app!ica ble 'to other ratios and also to the allocation of profits. It dos not seem possible from these studies to locte any optimum size of the factory in respect of any region. The reason probably is that profits depend not only on the size of the faotory but on various other factors e.g. efficiency of management, condition of machinery, availabili1y of raw materials and efficiency of workers;

¶110

F

¶111

(b) However, considering the overall position it is. evident that with no outside compeititor in the field, with a consuming public increasing and with national income which is rising, the industry has a good future.

¶112

H

¶113

KIRLAMPUDl SUGAR MILLS V. IND. TRIB.

¶114

43 7.

¶115

(laganmohan Reddy, I.)

¶116

A

¶117

'Jn spite of high taxation, high GoverD:men.t in_iposts. oy way of cess rise in price of raw matenal nse m freight charges and in some regi.:ms higher labour char!?ies owing to recel,lt revision of wag.s the deman ~or white sugar has been increasing and most of the ex1stmg sugar· mills have been fairing well. Many of ·them have exB panded their• capacity and new units are fast coming into operation. Progress of the industry has been rapid._ .. bi:rt the increase in taxes .has hit 1he retained earnings particularly in the case of North and Central region "comp.'!_nies.

¶118

( c). Taken "region-wise, the financial position of c Maharashtra is the best. It has natural ,advantages. The yield of cane per acre is higher. 'Its quality is beter. A large number of' the factories have thoir own farms. The cooperatjve have also assured ~upply-t5f cane. The cane growers are the share-holders. Then comes the South region. North. region occupies the D third position and Central region •the last. In cess Pun.iab, West Bengal,, Madhya Pradesh, Rajasthan, Madras and Kerala enjoy some advantage with no or lower rates per maund of cane. . . . :i;t J:!lay be adde<l here that recovery in some 9f these States is lower than the average of the country'.

¶119

E

¶120

It would appear therefofo that the Board took into con<ideration the special features of the sugar iµdustry and all the relevant factors wi'lh-gl'eat care and perspicuity and fixed a fair wage for the industry in each of the regions. What is was called on to assess is the ,fair wage which as it may be noticed according to the Report of the fair wag>~ Commil'tee was that which while F determining the capacity of an industry to pay, it considered it to be wrong to take the capaity of a particular unit or the capacity of all indutries in the counlry, into account. The relative criterion should be the .capacity of a par"ticular industry in a specified region and as .far as possible same wages should be prescribed for .all units in tha·t region. It will obviously not be possiG ble for the wage fixation Board to measure the capacity of e,ach of the units of an industry ·in a region, as such the only practical method is to take into consideration a fair cross section of that industry. This is what in fact the Board has C!on·The minimum wage that has ·to'be paid. is as interpreted by this Court in Express Newspapers (Pvt.) Ltd. v. (he Union of lndir. & Ors.(1) different from the' subsistence wag_e "which has got to be paid H to the workers irresoective of the capacity of 'the industry 10 pay while the minimum wage is something more than the bare mini( () [19,59) 5.C.R. (.

¶121

[1972] 1 s.c.R.

¶122

SUPREME COURT REPORTS

¶123

438

¶124

A

¶125

mum or subsistence wage. It further obset'"'.d "The minimum wage thus contemplated postulates the capacity of the industry to pay and no fixation of wages which ignores this essential factor of the capacity of the industry to pay could ever be supported". In that case the Court also observed at page 90 : "that the capacity of an industi:y to pay should be gauged on an industry-cum-region basis after taking a fair cross section of that industry. In a given case it may be even permissible to divide the industry irito appropriate classes and then deal with the capacity of the industry to pay class-wise". The classification into classes, it will be seen is not an obligatory one but is required only in cases where otherwise a fair wage cannot be determined. Any injunction that the industry in a region should in all cases be divided inio classes in derermining a fair wage for that industry would on the other hand likely to introduce greater disparity.

¶126

B

¶127

C

¶128

A reference has been made to the case of French Motor Car Co. Ltd. v. Workmen(1) for the proposition 1that large units ought not be compared with small units even where the Board is considering the wage structure on industry-cum-region basis. No doubt in that case the Tribunal had gone in'to the history of the wage revision in 1he undertaking and having regard to. a Jar)',':' increase in •the cost of living found that a case for further revision was made out notwithstanding the fact that wage scales were the highest in the industry. In Appeal this Court held that it was settled law that in fixation of wage scales, dearmss allowance and E similar conditions of servic an industrial Court has to proceed on indusiry-cum-region basis and compare similar concerns in the region which would be those in the same line of business as the concern in dispute. But such comparison must not be between a small struggling concern and a large flourishing one.

¶129

D

¶130

F

¶131

These cases were considered in Workmen v. Bairang Jute Mills(² ) to which one of us was a party (Vaidialingam, J.). That care was considering the Report of the Jute Wage Board which in making recommendations for 'the industry adop1ed a different approach. The Wage Board took the whole of India as one unit while in fact almost all the Jute Mills were situated in West Bengal and a few in Bihar and still fewer in Andhra Pradesh. What the Wage Board did was to compare 20 Mills from West Bengal and 9 mills from the rest of India as representing a fair cross section of the industry. The Respondenis haw a fairly small unit in Andhra Pradesh which was considered as a comparable unit with two larger mills in the State and with some of the prosperous Mills in Wes'! Bengal. The management of the Mill refused to accede to the d~mand of the workman

¶132

(I) [1963) Supp. 2 S.C.R. !«.

¶133

(7) [1%9) 2 S.C.R. 593.

¶134

G

¶135

H

¶136

K!RLAMPUDI SUGAR MILLS V. IND. TRIB.

¶137

439

¶138

A

¶139

(Jaganmohan Reddy, J.)

¶140

to pay the wages in accordance with the recommendations of the Wage Board, fixing uniform wage scale for the industry on the plea th~t the Mill had no financial capacity to bear the burden of the wage scale. On the disput•e being referred to the T1ibunal it upheld the claim of the management. This Court in Appeal sustained the Award of the Tribunal thwt the payment of the B workmen for implementation of the recommendation of the Wage Board is not justified. In this connection at page 609-610 it was observed by reference to the manner in which ithe Wage Board had laid down uniform scales for the entire industry irrespective of where its several units were situate and of the different conditions prevailing in various areas, that it would have been better if it had "considered the units in each area separately and determined the wage-scalr..s for each such area by taldng from that area a representative cross-section of he industry where possible or where that was not possible by taking comparable units from other industries within that area, thus following the principle of industry-cum-region". It was futher observed :

¶141

D

¶142

D "It is true that in doing so uniformity of wage scales for the entire industry would not have been attained. But in a vast country like ours, where conditions differ o~ten radically from region to region and even the index of living differs within a fairly wide range, such a target cannot always be just or equitable. If the wageE scales had been determined by the Board in the man. ner aforesaid, even though the Board is not a statutory body and consequently i¹ ts decision are of a recommendatory character, it would be possible for industrial tribunals to give due weight to its recommendations as such recommendations would have been in conformity F with the principle of industry-cum-region, a principle binding on the 'tribunals. It would be diftlcult in that · event for any unit in the industry in that region to propound a grievance that its capacity to pay was not taken into account as the scales so framed would have ·been determined after taking into consideration scales prevailing in comparable units, whether in that indusG try or other indus¹ tries in that region depending on whether in a particular area the accent was on the industry part or the region part of the principle of industry-cum-region".

¶143

The leai:ned Adv?cate for the Appellant lay~ stress upon thel observahon contamed at page 607 where while dealing with the H Express Newspapers case, this Couvt had observed :

¶144

". . . . the requirement of considering the capacity of each individual unit to pay may not beco~e neces-

¶145

[1972] l S.C.R.

¶146

440

¶147

SUPREME COURT REPORTS

¶148

sary if the industry is divided into different classes. Even if the industry is divided into different classes it will still be necessary to consider the capacity of the respective classes to bear the burden imposed on them. For this purpose a cross-section of these respective classes may have to be taken for careful consideration for decidng what burden th· class considered as a whole can bear".

¶149

These observations must be read in the light of wha!t was earlier stated namely "as the Wage Board was fixing a fair wage for the entire jute industry it may not have been strictly necessary to consider the financial capadty of each individual unit". There is nothing in the Bajrang Jute Mills case(1) which makes it obligatory on a Wage Board to divide the industry into regions as well as classes or to examine the financial capacity of every unit in that industry in ilie region, irrespective of the conditions prevailing in th·~ different regions of that industry. As long as all relevant factors appertaining to that industry, industry-wise and region-wise have been considered and the capacity of a fair cross section of that industry to pay in tha1 region has been ascertained, the recommendations of the Wage Board cannot be held to be invalid. It is not in every case that a division into classes in the same region, on a unrt-wise capacity should be made before recommendations of the Wage structure, dearness allowance or other conditions of service in that industry could be held ito be fair and within the financial capacity of the industry in that region. The criteria on which the recommendations of the Jute Wage Board were held not to be in accordano~ with the principle laid down by this Court in Bajrang Mills case do not form the basis of the recommendations of the Sugar Wage Board. The Sugar Wage Board not only divided the industry into regions as already pointed out bu1 on the other hand found that there was no great disparity in the region nor did the size of the unit make any difference. It standardised the wage structure, it adopt·d a standardisation of nomenclature by taking note of the various nomenclatures used in the industry and defined the qualification for each of the caotegories. The pre-dominant conditions for wage structure which weighed with the Board were that firs11y in view of the great unemployment nothing should be done to reduce the existing employment but on the other hand efforts should be made to increase it. Secondly the need for increase in production was paramount and any action likely to reduce it should be studeously avoided as far as possible. Thirdly the capital should not be idle for if a wag- structure is evolved which leads to the closure of any unit or units, a number of persons will be thrown out of employment, production will be (l) [1969j2s.C.R. 593.

A

B

C

D

E

F

G

H

'

KIRLAMPUD! SUGAR MILLS v. IND. TRIB.

¶160

441

¶161

(Jaganmohan Reddy, J.)

¶162

A

¶163

reduced and capital invested in them will become idle. Keeping these considerations in view the Board d~termined the wage structure which it recognised may be lower than norms laid down by the Fifteenth Labour Conference but the fact that there is a tremendous rush for employment in factories is proof that the wages recommended by it are higher than the rates fixed under B the minimum W a,ges Act in industries to which that Act applies or those prevailing in the open market. It also took irnto consideration the economic units in the regions which as accepted by it is a unit having a crushing capacity of atleast 800 to 1000 tons¹ thought it has noted that the majority of sugar factories have a crushing capacity hig!J.r than this and several of those c having uneconomic size have already applied for expansion. According to the Board there were only 38 factories which were below 800 tons crushing capacity but a good many of them were making profits. However, there are some which are running at loss and for them •the Board recommended that some consideration should b given to adjust themselves which should be the D same as these given to n.~w factories. This is what the Board stated in Chapter XIII at page 111 :

¶164

"The conclusion is that except some cases other units below 800 tons are making profits. Tho~ examination is set out in the Annexure to this Chapter. The Board is of the view that relax~tion in wa,ges is not ithe real remedy for those un-economic units. They will have to fall in line with .the sche1m of wages recommended by the Board. The r.~al remedy for them is to expand themselves into economic units".

¶165

E

¶166

It would •therefore appear tha<t the Wage Board following the principles laid down by this Court has considered the capacity of the industry region-wise and has also fixed wages different from region to region having regard to th·~ difference in the capacity of the industry region-wise. Further it has given good reason for no't furnishing a criteria for further classification of the industry within the region. In these circumstances pr.~scrib ing the same wage for all units of industry in the same region is in our view jus•tified and the fact that the industry in the region has not been divided into classes cannot vitiate the rcconunendations of the Wage Board.

¶167

F

¶168

G

¶169

It is contended on behalf of 'the Appellant that while this is so and the wage fixed is a fair wage for the industry in that region and cannot be challenged nonethdess the Tribunal is nC't precluded from considering a plea by any particular unit that ih fact its H financial position is such that it cannot bear •the burde11 of implementing the recom1wndations of the Wage Board. The . learnd Advocate for the Respondents however, counters this on

¶170

[1972] 1 S.C.R.

¶171

442

¶172

SUPREME COURT REPORTS

¶173

..'

¶174

the ground that once a wage has been fixed by the Board as a A fair wage on industry-cum-region basis, whether those r'ecom· mendations are !ltatutory or otherwise, no plea by any individual unit that it has not the capacity to implement the recommendations, can be entertained. He asks whether an Industrial Tribunal to which a dispute regarding the fixation of wage is referred fixes a wage structure, is it open to any particular unit to say B that it is unable to pay ? If this is not so, on the same parity of reasoning it is coRtended 1that no unit in a region can be permitted to plead that it bas not the financial capacity to implement the Wage Board's recommendations. It appears to us 1that if in law it, is open to the unit to plead financial inability to implement the recommendations of the Wage Board the hypothesis on c which ithe question has been posed will not be relevant because in such a contingency as is envisaged there would be a specific issue and a _determination of the wage structure by the Tribunal will be on the evidence produced before it according to the financial capacity of the unit. Once this is finally determined, the unit cannot continue to assert that it has no financial capacity to D implement the Award.

¶175

In our view there is warrant for the submission of the learned Advocate for the Appellant that notwithstanding the fact that a fair wage has been fixed by the Board which would be applicable to all the unrts in the region for which wage has been fixed, it may be open to any particular unit to plead that in fact its financial position is not such that it can bear the burden of implementing the recommendations. In Ahmedabad Mill Owners' Association etc. v. The Textile Labour Association(1), the observations of this Court at page 421 lend support to our conclusions. Gajendragadkar J, delivering the Judgment of this Court observed at page 421 :

¶176

&

¶177

F.

¶178

''The other aspect of the matter which cannot be ignored is tha¹ t if a fair wage structure is constructed by industrial adjudication, and in course of time ex. . ' penence shows that the employer cannot bear the burden ?f such wage structure, industrial adjudication can, and m a proper case should, revise the wage structure, though such revision may result in the reduction of the wages paid to the employees. It is true that normally, once a wage structure is fixed, employees are reluctant to face a reduction in the conknt . of their w~ge packet. but like all major problems associated with industrial adjudication, the decision of this problem must also be based on the major_ consideration that (I) [1966] I S.C.R. 392 .

¶179

H

¶180

K!RLAMPUDI SUGAR MILLS V. IND; TRIB;.

¶181

443

¶182

A

¶183

(Jaganmohan Reddy, J.)

¶184

the conflicting chims of labour and canital must be hannonised on a reasonable basis; and so, if appears that the employer cannot really bear the burden of the . increasing wage bill, industrial adjudication, on . principle, cannot refus-~ to examine the employer's case and should not hesitate to give him relief, if il B is satisfied that if such relief is not given the employer may have to close down his business. It is unlikely that such situwtion would frequently arise but, on · principle, if such situations arise; a claim by the employer for the reduction of the wage structure cannot be rejected summarily".

¶185

c

¶186

Of course the justification of the plllll of want of financial. capacity will depend upon the evidence of its financial position. over a period of years, to show that it cannot bear the burden or that it is only a temporary or fortutous situation with every possibility of financial improvement in the immediate future.

¶187

l t is accordingly contended that an examination of the finanD cial position would show that¹ the Appellant is not in a position to implement the recommendations and that even the Tribunal had recognised this position when it refused to implement an increase of Rs. 101- to all the workers over 1the basic wage and dearness allowance, and Rs. 51- as weightage to certain · categories of workers. It would appear from the statement of the E Company as evidenced by Ex. M. 51 that it had secured and unsecured debts for each of the four years as follows :

¶188

F

¶189

	Debts secured	Debts unsecured
1960·61	Rs. 73,59,344	Rs. _8,_13,263
1961-62	67,78,270	2,64.982
1962-63	32,31,438	28.06,000
1963-64	32,99,599	18,71,522
	207,68,651	57,55,767

¶190

G The details of debts would show that they are far in exooss of the paid up share capital and even taking the profit and dewlopment rebate reserves and other reserves· into account the financial position of the Company is certainly bad. A reference has also been made to the notices issued by 1he Revenue Divisional Officer, Ex. M. 53 for showing that on 30th December 1962, a sum of Rs. 15,91,777.11 ps. was due towards Sugar cane cess for H 1958-62 and a sum of Rs. 11.66, 718.37 ps. towards cane price in accordance with the details given thereunder. Subsequently it would appear from Ex. M. 53/1 that notices under Sec. 53 of

¶191

(1972] 1 S.C.ll.

¶192

SUPREME COURT ItEPORTS

¶193

444

¶194

!lhe Revenue Recovery Act were also issued by the Revenue Divisional Officer, Kakinada for the recovery of these amounts. There were also other notices and a press note published in the Indian Express showing that the Government was going to auction the Sugar Mills for recovering its dues. The Minister concerned is repoited •to have said that its Department was taking action to collect its dues as arrears of land revenue.

¶195

A

¶196

B

¶197

It is on the other hand contended that the Appellant's unit is . an economic unit and has been expanded into a 1000 ton unit in 1956 and there is nothing to show thereafter what its financial position was. In any case the profit and loss figures for the four years starting with 1960 would indicate that there was loss only C in one year whereas in all the oth·~r three years there was profit and from 'this we are asked to conclude that the Appellant company was in a sound financial position. No doubt any unusual profits or losses in any year due to advantageous circumstances should not be allowed to cloud the decision one way or the other. In Ahmedabad Mill Owners Association case it was 0boerved at page 420-421 as follows : D

¶198

"It is a long-range plan; and so, in dealing with this problem, 1the financial position of th·~ employer must be carefully examined. What has been the progress of the industry in question; what are the prospects of the industry in future; has the industry !J.o.en making profits; and if yes, what is the extent of profits; what is the nature of demand which the industry expec•ts to secure; what would be •the extent of the burden and its gradual increase which the employ.r may have to face ? These and similar other considerations have 'to be carefully weighed before a proper wage structure can be reasonably constructed by industrial adjudication, vide Express Newspaprs (Private) Ltd., and A1101her v. Union of India & Others. Unusual prolit made by the industry for a single year as a result of adventitious circumstances, or unusual loss incurred by it for similar reasons, should not be allowed to play a major role in the calculations which indus•trial adjudiction would make in regard to the construction of a wage structure. A broad and owrall view of 'the financial -position of the employer must be taken into account and attempt should alwavs be made to reconcile the natural and just claims of the employees for a fair and higher wage with the capacity of the emnloyer 'to pay it; and in determining such capacity. allowwice must be nw.de for a legitimate desire of the employer to mak· a reasonable profit".

F

E

G

H

445

KIRLAMPUDI SUGAR MILLS V. IND, TRIB.

¶205

A

¶206

(Jaganmohan Reddy, J.)

¶207

Bearing these observations in mind, it is necessary to determine wht the position of the Appellant is ? The conclusion of the Tribunal in respect of the claim for increase of Rs. 10/- is that having regard to the balance-sheets "the profits made in the 4 years are about Rs. 4 lakhs and the Joss sustained in 1962-63 is B of Rs. 16 lakhs and after wiping it off to some extent by sale of debentures it is about Rs. 9 lakhs. This will show that the financial position of the concern is not satisfactory". After noting that except for 'this one year the concern has al ways been making profits, it went on to observe : "StiJI, to judge the financial position of a concern, it is always relevant to see what are its reserves. It appears from the balance-sheet that the reserves have ,C never risen beyond Rs. 8 lakhs or so. In the circumstances, it, appears to me that it will be difficult to hold that the financial position of 'the Company is sound. I, therefore, agree with learned Advocate that it has not the financial capacity to imple-, ment this increase of Rs. 101- over and above 'the fitment in the grade recommended by the Board. I hold accordingly". The D comment of 'the learned Advocate for the Respondent is that these losses did not preclude the managemnt from accepting the recommendations of the Wage Board and willingly agreeing to _its implementation. In a letter dated the I 8'th December '61 to the President of the Workers Union, the Management stated that as p~r their talks on 10th December '61, it accepts the impleE mentation of the Wage Board recommendations and will pay from December '61 onwards salary as per fitments made by it. Final figures and fitments will be made after the Government Tripartite Committee comes and discusses with it and the Union and arrives at a decision. It also promised to pay the difference in the wage as per wages paid till the month of November 1961 F and the Wage Board fitments as made by them wiJI be paid to the workers before 'the end of March 1962. Again in the agree-' ment between the Management and the employees under sec. 18 (1) of the Industrial Disputes Act dated 19-9-63 it was specifically stated that "the question of fitments will be taken up as per the Sugar Board's recommendations in the month of January 1964 and finalise before the end of the 1963-64". Even at G that stage it was never the case of •the Management that the Wage Board's recommendations could not be implemented. Even the new management in its letter of September 5, 1964 addressed to the Union (Ex. W. 36) stated :

¶208

"With a view to arrive at an amicable settlement H with regard to fitments a discussion had taken place between the members of the TripartFte Committee constituted by the Commissioner of Labour and it was agreed during the discussions among other matters, that : - 10-Ll340 Sup. CI/71

¶209

[1972] 1 S.C.R.

¶210

SUPREME COURT REPORTS

¶211

446

¶212

A

¶213

( 1) Wherever there is a standard nomenclature in 1the Wage Board Report corresponding to the previous designation held by an individual before November 1960, he will be given that designation provid•w the duties and responsibilities of the individual are similar to the duties assigned by the Wage Board.

¶214

B

¶215

( 2) In other cases, where no standard nomenclature can be applied to the existing cadre, tho~ cadre will he fixed with reference to duties and responsibilities and the time scale of pay attached to the cadre in factory before November 1960''.

¶216

From the several exhibits it would apP'~ar •that both old and the new management were anxious to implement the Wage Board's recommendation but according to the fitments made by it. But the employees as represented by the Workers Union were not prepared to accept those fitments and wanted fitments in a higher cadre and other advantages according to their reading of the Wage Board's recommendations which the management felt, it is not able to accommodate not only hxause those recommendations did not justify it but on the ground of financial incapacity.

¶217

No doubt it is for the management to show what its financial position is and how it is going to place undue or impossible burden upon it to implement the recommendations. That burden it seeks to discharge by production of the balance-sheets which have nO't been challenired and the contents of which are, therefore deemed to have been accepted. We find from the balancesheet and the Directors Report for the period ending 30-6-60 that a sum of Rs. 6,15,2541- had to be written off against the old losses leaving a balance of Rs. 40,7741- in the profit and loss account. The Directors thought that the Company's financial position has now been stabilised and all the old losses have been wiped off but that hope was only short lived as the subs queot balance-sheets for the period ending 30th June '61 would show. According to the report for 1961 though there was a net profit of Rs. 1,08,0051- which together with the carry forward profit of the previous year of Rs. 40,7741amounted to Rs. 1,48,7791- and after making provision for reserve for dev-:ilopment rebate of Rs. 38,7881- a balance of Rs. 1,09,9911- was carried forward 'to next year's account. For that year no dividends were declared and the Managing Agents also waiv' their remuneration. For the year ending 30th June 1962, the position is more or less the same-the net profit for the year amounted to Rs. 30,616/- which toirether with the nrofits of the previous year of Rs. 1,09,9911amounted to Rs. 1,40,6071-. This

c

D

E

F

G

H

K!RLAMPUDI SUGAR MILLS V. IND. TRIB.

¶225

447

¶226

(Jaganmohan Reddy, J.)

¶227

A amount was again recommended by the Directors to be carried forward for the next year. No dividend was declared and the Managing Agents also waived their remuneration. In 1963 the position had become critical the Joss incurred was Rs. 16,12,196 which wiped out the previous r.ar's profits. There was no question of declaration of any dividends but Managing Agent's re-

¶228

B muneration of Rs. 30,000/" (minimum) was drawn. These Joss.es would have the effect of eating into the capital of the Com· pany, unless it could borrow and tide over them. In the year ending 30th June '64 a Joss of Rs. 6,61,3861- was carried forward to next year. It may be noted that in that y.~ar in June 1964 the Government of India had approved the change in the

¶229

c Constitution of rthe Managing Agency of the Company and it is stated that because of th.e efforts of the new Management wh" borrowed large sums on their personal security for putting th" Appellant in be'tter shape, large sums were in fact advanced to the Appellant.

¶230

As could be seen from the statement M. 51 that for the years

¶231

I) 1960-61, 1961-62, 1962-63 and 1963-64 the secured and unsecured debts were approximately Rs. 81 lakhs, Rs. 70 !akhs, Rs. 61 Jakhs and Rs. 51 lakhs respectively. It is stated that the losses were coming down and therefore the financial position is getting better but in our view this by itself does not mean that ithe Company is in a sound financial position. What was hap·

¶232

E pening evid•wtly is as suggested by the learned Advocate for the Appellant that the Sugar stocks pledged were being sold and therefore the debts were getting less. It is no doubt itrue that attachment orders which were made in 1 962 must have been paid off and the attachment wi•thdrawn. That again is not an indication of the soundness of its financial position because there

¶233

F is evidence to show that the new management had to secure a large loan of aboU't Rs. 30 lakhs on its personal security to pay these demands and that is why Rs. 16 lakhs loss is paid off and hence in the year 1962-63 the unsecured debt is shown as Rs. 28 lakhs. The Tribunal was therefore justified in coming to the conclusion that the Company was not in a sound financial position •to implement¹ the recommendations of th·~ Wage Board to increase Rs. I 01- on the basic wage and the dearness allowance or Rs. 51- as weightage. Apart from these losses the general reserves are very negligible. Each year about Rs. 3,0001- is being provided for. In all Rs. 8 lakhs res·~rves were accumulated from its inception which is not very encouraging.

¶234

!l While •this is so having regard to i'ts working we had called for the balance-sheets subsequent to 1964-65 to assess the financial prospects of the Appellant during this period. These reveal the following position :

¶235

[1972] 1 S.C.R.

¶236

SUPREME COURT REPORTS

¶237

448

¶238

A

¶239

The balance-sheet for the year ending 30-6-65 showed a profit of Rs. 12,72,1261- before depreciation. After deducting Rs. 5,25,5451- towards depreciation and Rs. 1,16,1381as reserve towards development rebate iqid after adjusting the loss brought forward from last year, a loss of Rs. 30,943/ - was carried forward to the next year.

¶240

B

¶241

The balance-sheet for the year ending 30-6-66 showed a vrofit of Rs. 3,23,7891-. After setting apart depreciation a sum of Rs. 2,27,9421- was the loss carried forward and in 'the balancesheet for the period ending 30-6-67 there was shown a loss of Rs. 5,10,7711- and after providing for depreciation there was a 10ss of Rs. 9,90,5261 -. It may also be noticed that in the year of account the Company had to provide a sum of Rs. 2,16,353/towards additional cane price payable ~o the cane growers for the seasons 1958-59 and 1959-60. After allowing for this there was a total loss of Rs. 14,23,505/- which was carried forward •to the next year. In the balance-sheet for the year ending 30-6-68 there was a gross profit of Rs. 13,22,932/ - and after providing for depreciation and adjustment of loss brought forward there was a balance of loss of Rs. 5,93,620/- carried forward •to the next year. The year ending 30-6-69 was one year in which dividend of 7.153 was paid on the St% income-tax Free Cumulative Preference shares. The profits for the year after adjusting all the losses and providing for depreciation, payment of bonus to staff and taxation it showed a balance of Rs .. 2,27 ,430/- out of which dividend was declared as aforesaid. For the year ending June '70 there was again a loss of Rs. 5,96,913/- after providing for depreciation. The Directors explained this loss due mainly to high rates of interest charges, provision for depreciation and the passing on of the entire realisable profit on 1968-69 season production for the benefit of the cane growers in that year.

¶242

The balance-sheets for the years 1960 to 1970-for a period . of 10 years show that except for the year ending 30-6-69 the Company was not in a position •to declare any dividends. Though the factory appears to have beeri expanded after 1964 to 1300 tons capacity it did not show uniform net profits; on the other hand losses continued. The profits :that it made in any year seem to be consumed by losses of the previous years. In some years the yield of cane seem to be slightly over 103 the average being a little over 9% which no doubt is encouraging but in spite of it there are various factors which seem to contribute to its financial unsteadiness.

c

D

E

F

G

H

This being the position we think that the Tribunal was justified in holding thM the Ap~llllt did not have die financial

¶250

KIRLAMPUDHiUGAR MILLS V. IND. TRIB.

¶251

449

¶252

(Jaganmohan Reddy, J.)

¶253

A capacity to bear the b11rden of payment of Rs. 10/increase and Rs. 51. as weightage in accordance with the recommenda· tions of the Sugar Wage Board. On this conclusion and also on an examination of fue relevant mat>~rial it is evident that the Company is not in a financial position to meet the burden of implementing the recommendations of the Wage Board. The

¶254

B claim of the Respondent for categoriswtion and fitment in accordance therewi1h cannot in the circurnstancr.,s be accepted. The Appeal of the Respondents which challenges the Award of the Tribunal rejecting their claim, for an increase of Rs. 10/ • and a weightage of Rs. 51. and for the caitegorisation and fit· ments in respect of the heirarchy of supervising category namely

¶255

c Assistant Cane Organisers, Liaison Field Supervisors and Field Supervisors as also in respect of Head Panman, and Panman Incharge of shift, Panman, Asstt. Panman, Bench Chemists and Cane analysists and Canteen Supervisor are all dependent upon the financial capacity of the Respondent Company to implement the Wage Board's recommendations which we have held iot has

¶256

D not. As stated earlier the Company which is the Appellant in Civil Appeal No. 1602 of 1966 has already implemented the Award of the Tribunal in respect of a large number of workers both as to categoriswtion and fitmen1. It is in respect of fitment of only four categories that it has not implemented, namely Welders, Turbine Engine Drivers, Switch Board Attendants and Boiler Mason's that the Appellant has objected to the Award on

¶257

E the ground that the Tribunal has acted without evidence and in · some cases contrary to the recommendations. The learned Advocate for the Respondents felt that he could not really challenge the contention in respect of the Switch Board Attendants and Turbine Engine Driver, as it would appear that the Tribunal has acted withourt any evidence. Why we have referred

¶258

F to these specific cases objected to by the Company in their Appeal is to indicate that, notwithstanding the finding that the Wage Board's recommendations in the circumstances, cannot be im· plemented, the Company has given effect to the Tribunals Award. which will remain in force till a revision takes place. In the view we have taken the Appeal of the Appellant is allowed subject to the above directions and tha1 of the Respondents dismissed. We make no order as to costs.

¶259

G.C.

¶260

Appeal No. 1602 of 1966 allowed; Appeal No. 1603 of 1966 dismissed.

Management of the Kirlampudi Sugar Mills Ltd. v. Industrial Tribunal, A.P. & Anr.

Case brief

What is this about?

What did the court decide?

Management of the Kirlampudi Sugar Mills Ltd. v. Industrial Tribunal, A.P. & Anr.

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

Similar cases

The Workmen versus Greaves Cotton & Co; Ltd. & Ors.

Hindustan General Electrical Corporation Ltd. versus Visw Anath Prasad and Another

Bombay Panjrapole, Bhuleshwar versus the Workmen and Another

Oriental Textile Finishing Mills, Amritsar versus Labour Court, Jullundur & Ors.

Union of India & Anr. versus Ogale Glass Works

U.P. Electricity Supply Co. Ltd. versus Workmen & Ors.