GAJENDRAGADKAR, J. - (1.) THIS appeal by special leave arises out of an industrial dispute between the appellant, Williamsons (India) Private, Ltd., and the respondents, its workmen. The appellant is a private limited company which has been established and incorporated under the Indian Companies Act in 1947. Its business consists mainly of importing mills stores, such as leather belting, pickers, bobbins and machinery cloths. It no doubt buys and sells similar articles manufactured in India, but this part of its business is insignificant. The secretaries of the appellant are Gillanders Arbuthnot & Co., Ltd. The appellant has entrusted its secretarial and accounts work to the said secretaries who carry out the said work through the staff working directly under them on the remuneration which has been agreed between the appellant and them. The present dispute is concerned with the sales department managed by the appellant company itself. In this sales department, the appellant employees sixteen workmen, two of them are designed as stenographers-cum-clerks, one typist-cum-clerk, one godown-keeper, one assistant godown-keeper, eight unskilled workmen and three motor-car drivers.
(2.) THROUGH their union, the respondents made demands on the appellant on 29 October 1957. These demands related to the wage structure, dearness allowance, washing allowance leave, gratuity scheme, uniforms, medical aid and bonus. These demands could not be settled amicably and so, ultimately they were referred for adjudication to the industrial tribunal by the Government of Bombay on 26 July 1958. The reference included nine demands in all, eight of which have already been specified and the ninth was in respect of the retrospective operation of the benefits of some of the demands made by the respondents. After hearing the parties and considering the evidence led by them, the tribunal made its award on 21 April 1960. It is against this award that the appellant has come to this Court by special leave.The main point which Sri Sastri has made before us on behalf of the appellant is that on the finding made by the tribunal on the principal question about the financial position of the appellant and its capacity to bear the burden, it would follow that the major portion of the award relating to wage structure and dearness allowance cannot be sustained. He has also contended that the tribunal was in error in holding that concerns like Gillanders Arbuthnot & Co., Greaves Cotton, Gannon Dunkerley, Parry & Co. and Forbes Forbes & Co. are comparable to the appellant. It is on these two points that the validity of the substantial portion of the award is changed before us by Sri Sastri. It appears that before the tribunal it was urged that the financial position of the appellant was not very satisfactory and that its business was fast decreasing. In support of this plea, a confidential statement Ex. C3 was filed by the appellant. The correctness of this statement was not challenged by the respondents. This statement shows that since 1956, the quota allotted to the appellation has been considerably reduced in regard to most of the articles and in respect of some, it has been cancelled. The appellant urged that it had been carrying on its business during the recent years because of the previous stock which remained with it and its case was that owing to the reduction in the quota in a large number of articles and its cancellation in respect of some, it would not be able to carry on the business for long and so, it would be unreasonable to impose upon it the additional burden of a new and enhanced wage structure. The tribunal party accepted this argument and held that it appeared highly improbable that for sometime to come the quotas would be increased to any appreciable extent. But it went on to observe that it was likely that some of the articles which were now imported by the appellant might be manufactured locally and that the tribunal did not think that the appellant would allow its business to come to a standstill on account of the restriction on imports. Then the tribunal had added that concerns doing purely or largely import business have turned to trade in indigenous goods, or substituted some other kind of business in place of the sale of imported goods and are doing very well. It would, therefore, be wrong, said the tribunal, to think that the import restrictions would completely cripple the finances of the appellant or imperil its very existence in future. It is this part of the decision which is seriously challenged before us by Sri Sastri.Ex. C3 which has been printed in the paper book before us, clearly shows that the quotation have considerably been reduced in a large number of articles and in some cases, they have been cancelled and the extent of the business of the appellant has naturally been proportionately reduced. Ex. C2 which refers to the financial position of the appellant also tells a similar story. Indeed, the tribunal itself has accepted the appellant's case that if business has not so far shown signs of collapse, it is partly because of its old stocks. The balance-sheets for the years 1956, 1957 and 1958 show that whereas the appellant had valued its goodwill at a lakh of rupees and has adjusted its profit and loss accounts on that basis, it owes debts to a large extent and its reserve or surplus is very little. Having regard to these facts, it is not easy to appreciate how the tribunal reached the conclusion that the financial position of the appellant was very satisfactory and that it could be compared in that behalf to Gillanders Arbuthnot & Co. It may be that the tribunal happens to know that some other concerns which were dealing in import of foreign goods have turned to trade in indigenous goods or have substituted some other kind of business and have prospered in the new line. But, surely, that cannot be a valid or legitimate basis for assuming by anticipation the appellant would also undertake a new line of business and will prosper in it. It is well-settled that in constructing a wage structure with a scale of increments, industrial adjudication had to take a long-range view and it has to examine very carefully the impact of the wage structure on the financial position of the concern in question. Having found that the business of the appellant was on the decline and that in the light of business in which the appellant was operating so far there was no chance of improvement, the tribunal should have hesitated before imposing additional burden on the appellant by constructing a new wage structure. Therefore, in our opinion, having regard to the findings of fact recorded by the tribunal, the appellant is entitled to contend that the ultimate decision of the tribunal about the financial capacity of the appellant is based purely on speculation and that such speculation cannot supply a proper basis for the decision of the main dispute between the parties.There is another argument which has been strongly pressed before us and that is that the tribunal was in error in treating Gillanders Arbuthnot & Co. as a comparable concern. This Court has repeatedly observed that in considering the question about comparable concerns, tribunals should bear in mind all the relevant facts in relation to the problem. The extent of the business carried by the concern, the capital invested by them, the profits made by them, the nature of the business carried on by them, their standing, the strength of their Labour force, the presence or absence and the extent of reserves, the divides declared by them and the prospects about the future of their business - these and all other relevant facts have to be born in mind. In the present case, the tribunal itself was conscious that the Gillanders Arbuthnot & Co. was a much bigger concern with a much bigger capital and with a much larger business spread all over India. Even so, the tribunal thought that because the number of employees engaged by Gillanders Arbuthnot was much larger, whereas the employees engaged by the appellant were only sixteen, it would be safe to compare Gillanders Arbuthnot & Co., with the appellant. It our opinion, the approach adopted by the tribunal in dealing with this aspect of the question is open to serious criticism. Therefore, we are satisfied that the criticism, made by Sri Sastri against the award in so far as it assumes thai Gillanders Arbuthnot was a comparable concern, is also not without justification.
(3.) HAVING reached this conclusion, the question which we have to consider is : what order we should make on the present appeal ? Sri Dudhia for the respondents saw the infirmity of some of the reasons adopted by the tribunal, but he contended that in considering the financial position of the appellant it may nor be irrelevant to have regard to the fact that the appellant was distributing to its there directors an unconsciously large amount under the head "commission, remuneration, motor-car, travelling and entertainment allowance." In fact, according to Sri Dudhia, the total emoluments paid to the directors are of the order of Rs. 2, 20, 875. If the appellant can afford to fritter away such a large amount on its directors, it is not open to the appellant to contend that its financial position is not satisfactory. There may be some force in this argument.Besides, Sri Dudhia stated before us that in fact, the appellant's business during the years subsequent to the date of the award has very much improved and what looks like speculation in the award has actually come true. In that connexion, he pointed out that in the last year, the appellant has given by way of bonus four months' basic wages to its employees. Sri Dudhia's suggestion, therefore is that of the award is set aside, his clients should be given a chance to justify their claim before the tribunal and so, the matter be remanded to the tribunal with a direction that it should examine the problem once again in the light of such additional evidence as the parties may lead before it. In fact, having come to the conclusion that the reasons given by the tribunal in support of its finding that the appellant should bear the financial burden of the wage structure devised by the award are not satisfactory, we tried to see if we could settle the dispute ourselves in appeal, but that turned out to be very difficult; and so, we have decided to set aside the award and send the case back for disposal in accordance with law in the light of this judgment.;