C.A.VAIDIALINGAM - (1.) THIS is an appeal by special leave form an award of a National Tribunal under an order of reference reading: "Whether the demand of the workmen for a share in the incentive payment allowed by Government to cement producers is justifies ? If so, what should be the basis and the quantum payable for the year 1963 and subsequent years ?"
(2.) THE-cement producers involved were 14 in number set out in Schedule I to the said Order. Out of the total, the Tribunal was not called upon to go into the cases of five cement producers as they had not received any incentive payment and the demand in respect of these five companies was dismissed. Even out of the nine left, three of the producers entered into settlements with their workers as a result whereof the cases of six only are left for consideration. THE names of the companies and the incentive payments involved in this appeal are as under :- JUDGEMENT_727_3_1972Html1.htm The background of the dispute is as follows. "Cement and gypsum products" became a scheduled industry under S. 3 (1) of the Industries (Development and Regulation) Act of 1951 being an Act to; provide for development and regulation of certain industries. Under S. 2 of the Act the Union of India was empowered to take control of the said industry. S. 18 (g) (1) of Chapter III-B of the Act with the heading "Control of Supply, distribution, Price etc. of certain articles" enable the Central Government to provide for regulating the supply and distribution of any article or class of articles relatable to any Scheduled industry and trade and commerce therein by notified order. Sub-s. (2) of S. 18 (g) illustrates the powers comprehended by sub-s. (1). These include, inter alia, powers for controlling the prices at which any such articles or class thereof may be bought or sold, regulation of the distribution of such articles etc. On 31/10/1961 Government of India made an order under S. 18 (g) known as the Cement Control Order of 1961 superseding an earlier Order of 1958. The relevant portions of the Orders are set out below: "Cl. 3. Producers to sell cement to Corporation ... (1) Every producer shall sell ... ... (a) the entire quantity of cement held in stock by him on the date of commencement of this order; and (b) the entire quantity of cement which may be produced by him before the date of commencement of this Order up of the 31/03/1966 (Inclusive) except such quantity as may be mutually agreed upon from time to time between him and the Central Government to the Corporation, and deliver the same to such person or persons as may be specified by the Corporation in this behalf from time to time. (c) Notwithstanding any contract to the contrary, no producer shall dispose of cement held in stock or produced by him except in accordance with the provisions of sub-clause (1). Cl. 6. Controlled price of cement. (1) The price at which a producer may sell cement at other than - (i) water-proof (hydrophobic) cement; (ii) rapid hardening cement and (iii) low heat cement; shall be as specified in the schedule; (2) (a) The price at which the Corporation may sell cement other than - (i) water-proof (hydrophobic) cement; (ii) rapid hardening cement; and (iii) low heat cement; to any person shall be Rs. 94 - 00 per metric tonne free on rail destination railway station plus the excise duty paid thereon: Provided that the Corporation may, with the prior approval of the Central Government, allow a rebate, discount or commission in the price of cement sold to the Government for the Directorate General of Supplies and Disposals: There was only one Schedule to the Order which ran; The Schedule The price at which each producers may sell cement free on rail ex-works is the price which has been determined by the Central Government in respect of that producer having regard to the recommendations of the Tariff Commission on the revision of prices of cement, and to all other relevant of circumstances, that is to say. - (Only the relevant portion is set out below). JUDGEMENT_727_3_1972Html2.htm By the amendment of 1963 the Paragraph before the Schedule was marked as (A) prefixed by the words "subject to the provisions of Paragraph (B) and (C)." After the Schedule Paragraph (B) was added to read :- "(B) In addition to the price specified in Paragraph (A) the producer mentioned in Column 1 of the Table below may charge an extra amount specified in Column 2 of the said table in respect of cement produced and sold by them in excess of the quantity specified in the corresponding entry in Column 3 thereof. "TABLE" JUDGEMENT_727_3_1972Html3.htm It is to be noted that three different prices were fixed in respect of the 21 companies mentioned in the Schedule. The price applicable to twelve was Rupees 69-50, to eight others Rupees 72-50 and to one alone Rupees 95/-. Paragraph (B) inserted in 1963 however provided for a charge by the producer of an extra amount of Rupees 5-50 in respect of twelve companies and Rupees 2-50 in respect five others. The curious feature of this table is that the limit of quantity in Column 3 varies from producer to producer and the period specified is not the same in all cases. For the first two producers the U. P. Government Cement Works and the K. C. P. Ltd., Macherla, the Order provided for payment of an additional amount for all subsequent years ending on 31st October. In the case of Mysore Iron and Steel Co. Ltd., the increase was provided for only one year, namely, year ending 31/12/1963 the target above which the extra amount was to be paid being 81,000 metric tonnes. Similarly, the case of Dalmia Dadri Cement Ltd. the extra amount was to be payable over the target figure of 1,76,000 metric tonnes only in the year ending 31/12/1963: so is the case of Jaipur Udyog Ltd. the target being 7,55,000 tonnes; in the case of India Cements it was for the year ending 31/12/1963 as also in the case of Kalyanpur Lime and Cement Works and Sone Valley Portland Cement Company.
(3.) IT appears that Cement Control Order of 1961 was further amended from time to time. By an order dated 31/05/1963 which was to come into force on 1/06/1963 and the Schedule below Paragraph A of the Schedule was amended increasing the price in cases where cement producers could charge the Corporation rupees 69-50 per ton to rupees 72-25 per ton while India Cement Ltd., Kalyanpur Lime and Cement Ltd., and Sone Valley Portland Cement Company. Ltd., were allowed to charge the Corporation Rupees 75-25. In other words, all the above six producers besides K. C. P. Ltd., (appellant in C. A. No. 2156 of 1970) were allowed to increase their price by Rupees 2-75 per tonne chargeable to the said Corporation. There was also an increase in the price which the State Trading Corporation could charge under sub-clause (2-a) of Clause 6. Prices were further increased by Amendment Orders dated 30/06/1964 and 31/05/1965. These however do not concern us in these appeals. Workmen of fourteen companies claimed that the extra amount under Paragraph (B) of the Schedule could only be earned by the producers as a result of extra effort on their part and as such they were entitled to a share thereof. Different statements of claim were put in before the Tribunal in respect of different producers. The workmen of Jaipur Udyog Ltd. Claimed that they should be paid 60% of the extra amount paid for the year 1963 and the full amounts to be paid in the subsequent year. According to them the Government of India had introduced a scheme whereby the cement Industry was allowed payments in the nature of incentive at the rate of rupees 5-50 per tonne of cement produced in 1963 and subsequent years in excess of the specified quantities of cement. The figures adopted for Jaipur Udyog Ltd., was 7,55,000 and the extra payment at rupees 5-50 per ton related to the production over and above that figure. The President of Indian National Cement Workers' Federation submitted that: "In the cement Industry the workers played a very important part in increasing the cement production and without their co-operation and efforts the quantity fixed in each factory could never have been exceeded.... The quantity fixed by the Government in respect of each factory was the highest figure reached in the preceding three years and labour had substantially contributed to exceed the said figure and reducing the cost of production in respect of various cement works and all workmen should be entitled to the full payment in the incentive payment allowed by the Government to the various cement producers in proportion to the earnings for the year 1963 and for subsequent years." ;