C.A.VAIDIALINGAM, - (1.) THE following Judgment of the court was delivered by:
(2.) THE workmen of Shri Bajrang Jute Mills Ltd., in this appeal by special leave, attack the correctness of the award dated 29/05/1965of the Industrial tribunal, Andhra Pradesh, Hyderabad, I. D. No. 12 of 1964,by which it held that the demand of theworkmen for implementation of the recommendations of the central WageBoard for Jute Industry (hereinafter referred to as the Wage Board), was notjustified. . In view of the fact that the respondent-management declined to accedeto the demand of the appellants to paywages in accordance with the recommendations of the Wage Board, the State ofAndhra Pradesh, by its order dated 21/03/1964, referred for adjudicationto the Industrial tribunal, Hyderabad,the following question:"Whether the demand of the workmen in Sri Bajrang Jute Mills, Limited,Guntur, for implementation of the recommendations of the central WageBoard for Jute Industry is justified, andif so, to what extent?" . The Wage Board was constitutedby the central government for determining, among other matters, a wage structure, based on the principles of fairwages payable in the jute industry. TheWage Board consisted of a Chairman,two independent Members, two Membersrepresenting the employers and twoMembers representing the workers. Itmay be noted that the Members representing the industry and labour were notchosen by the representative bodies ofthe industry or the labour but wereappointed by government. In fact,neither the industry nor the labour hadany voice in the choice by the government of any of the members of the WageBoard. The Wage Board submitted itsreport to the government, making recommendations about the wage structureand laying down principles for awardingbonus for the year 1962-63 and the sub-sequent years. 3-A. It appears from the Wage Board'sreport that, at the very outset, the WageBoard selected 20 mills from West Bengal and 9 reporting mills from outsideWest Bengal which it considered to forma representative cross-section of the industry for a detailed study. The WageBoard took into account the financialposition of the said mills and also collected other data and information notonly from the mills concerned but alsofrom other quarters. The Wage Boardtook into account the growth of paidup capital, gross block depreciation, profits made and dividends paid by the millsand other allied matters and came to theconclusion that the industry's positionwas satisfactory and its future was bright.The Wage Board was not required to fixa wage structure on the peculiar financial position of any particular unit, although it was bound to take a fair crosssection of the industry represented byunits reflecting the general conditionsprevailing in the industry as a whole. TheWage Board also considered the principles for determination of bonus and recommended payment of bonus for theyear 1963 on the basis of the basic wagesdrawn by the worker for the year 1962.It also recommended that for future yearsthe bonus was to be paid according tothe wages drawn in the preceding year.It further recommended certain rules fordetermination of the quantum of bonus.According to the appellants, the respondent was bound to implement the recommendations of the Wage Board in all respects and its refusal to do so was illegaland unjustified.
(3.) . The respondent, pleaded that therecommendations of the Wage Boardcould not be implemented as the Millhad no financial capacity to bear the burden of the wage scales recommended bythe Wage Board. The respondent madean attempt to implement the WageBoard's recommendations to some extentat least, provided the labour agreed forrevision of work loads, but the labourwas not willing for such revision. It wasfurther stated that the respondent company, though started in 1907, had beenrunning at a loss for a number of yearsand its loom-strength was only 120. Themill was located at Guntur, which is nota jute-growing area, and in consequencealmost all raw materials had to be broughtfrom Vijayanagaram, in VisakhapatnamDistrict, and from Calcutta. As the rawmaterials and other products had to bebrought from outside, it involved themill in considerable expense due tofreight charges etc. The products manufactured in the mill were only cementbags and twine and cement companieswere its only customers. The companyhad furnished replies to the questionnaireissued by the Wage Board and had madeit clear that the wages paid by it werereasonable and it could not bear any additional burden in that regard. Eventhe interim relief, recommended by theWage Board, was implemented with considerable difficulty though it involvedthe company in an additional revenueexpenditure of Rs. 1,53,000.00 a year. . The Wage Board's recommendations fixed the wage scales, dearnessallowance etc., for all the employeesworking in all the jute mills situated inthe country, irrespective of the financialposition of individual mills. If the recommendations of the Wage Board wereto be implemented the company wouldbe put to further expenditure of Rupees2,75,385.60 in the first year, Rs. 3.25lakhs in the second year and Rs. 3.75lakhs in the third year in addition to theexisting wage bill which the companyhad to meet. The company has beenmaking only negligible protits and itcould not pay any dividend on its equityshares for nearly 7 years. Its reservesalso have been dwindling. The financialposition of the company, therefore, issuch that it is impossible for it to bearthe burden of the additional wage structure, dearness allowance etc., as recommended by the Wage Board. The company further pleaded that the WageBoard committed a serious mistakewhen it compared the financial positionof the respondent along with two otherlarge mills in the Andhra area viz.,Nellimaria and Chittavalasa Jute Mills.Further the wage scales fixed by theWage Board are on the basis of theposition occupied by big Jute mills inWest Bengal, having upto 2,561 looms and13,580 spindles. The Wage Board didnot attempt to make any distinction between small and uneconomic mills andlarge mills, nor was any classificationmade in that manner.;