S. K. DAS J.: - (1.) THE following Judgment of the court was delivered by
(2.) THESE are three appeals by special leave. The appellant in all the three appeals is a company called Messrs. Lipton Ltd., London, having an office at Asaf Ali Road, New Delhi (hereinafter referred to as the Lipton, Ltd.). The respondents are the employees of the Delhi office of the said Lipton, Ltd. represented by the Lipton Employees Union (hereinafter referred to as the Union). On 14/04/1958, a petition was filed on behalf of the appellant for an amendment of the cause title of the three appeals, wherein it was stated that as a matter of internal arrangement the Board of Directors of the Lipton Ltd., London, decided to separate the export side of its business from its internal trade in respect of its branch in India and on 4/04/1957, a separate sterling company called Lipton (India) Ltd., was incorporated in the United Kingdom and this new Company took over the internal side of the business in India on and from 5/01/1958, but the export side of the business continued to be a branch of the Lipton Ltd., London. Pursuant to the aforesaid arrangement, the employees of the Delhi office of the Lipton, Ltd., were notified of the formation of the new Company and on and from 5/01/1958, their services were transferred to Lipton (India) Ltd., on condition that their services would be treated as continuous, uninterrupted and on the same terms as before. On the aforesaid statements, the appellant made a prayer that the cause title of the three appeals should be amended by substituting Lipton (India) Ltd. in place of Lipton, Ltd. We directed that Lipton (India) Ltd. be added as one of the appellants without prejudice to either party on the merits of the case. Two of the appeals (Civil Appeals Nos. 713 and 714 of 1957) were consolidated by an order of this court, and theyraise certain common questions with regard to (1) fixation of grades and scales of pay of the respondent-employees and (2) bonus for the year 195 1. The third appeal (Civil Appeal No. 715 of 1957) raises a somewhat different question with regard to overtime payment and is directed against an order of the Additional Industrial tribunal, Delhi, dated 15/10/1955, by which the tribunal made a modification in its award dated 18/08/1955, in respect of overtime payment. It will be convenient if Civil Appeal No. 715 of 1957 is dealt with separately from the other two appeals. It is necessary now to state very briefly some of the facts which have given rise to these three appeals. The Lipton, Ltd., is a company incorporated in England having its registered office in London. Its business in the United Kingdom consists of stores and groceries, including tea which represents only about 10% of its business there. Its operations in India are carried on by a branch with its head office in Calcutta. This branch, which may be convenientlyently called the Indian branch, has been operating in this country for more than 60 years. The company is principally interested in the sale of ` packeted ` tea throughout India together with small sales of imported tinned milk and also in the export of tea to all parts of the world. The Lipton, Ltd., does not own any tea gardens in India and has no financial interest in the producing side of the industry. All the teas which are sold in India or which are exported are purchased from producers in India, either through public auctions in Calcutta and Cochin or by private contract. It has factories in Calcutta, Allahabad and Conoor in which teas are blended and packed into retail packets for sale throughout India.- It -sells tea direct to retail dealers and, with relatively minor exceptions, does not operate through wholesalers. Dealers are supplied by the company's own salesmen each of whom has a sales depot at which he maintains stocks of the company's products. The salesman sells these teas at the company's wholesale prices to dealers for cash and remits the cash through banking channels to Calcutta. The sales Organisation is controlled through six offices, one of which is located at Delhi. The Delhi office controls the salesmen and other employees employed in the Punjab, Delhi State, Rajasthan and Uttar Pradesh on its. business; but the Delhi office has no connexion with the export side of the business. So far as the export business is concerned, it consists of two different types of trade activities. In some foreign countries the Indian branch sells packet tea under the Lipton label on which it is able to make a profit; these profits appear in the accounts of the Indian branch, which are separately maintained and audited. This type of trade activity is mostly confined to Burma, Iraq, Iran and certain small Middle East countries. The greater part of the export trade, however, consists of purchases made at the Calcutta auctions on behalf of overseas buyers, who utilise the services of Lipton's expert tea tasting staff in Calcutta to buy tea on their account at the auctions and the Indian branch is remunerated for this service by the payment of a commission of one per cent. The Indian branch has no subscribed capital nor any reserves. A. W. Samuel, Administrator, Lipton, Ltd., thus explained the position with regard to the capital of the Indian branch in his evidence:` Our Company has no subscribed capital in India nor any reserves. The capital used in India is money advanced from the company's fund in England, and the amount of this advance at the balance sheet date is shown as the balance of the current account with the Liptons Ltd., London. We have also to resort to overdraft on the local banks to meet the working capital demand in India `. It appears that an account is maintained which is known as the London General Account and the capital which enables the Indian branch to operate in India is recorded as the balance of the current account in the Indian books and to determine the amount of capital employed in India a daily average of the current account has to be taken and the working capital of the Indian branch is the amount by which the fixed current assets exceed the total liabilities. The Delhi office of the Indian branch employs peons, sweepers, van-workers, godown workers, village salesmen, drivers,. junior clerks, godown keepers, senior clerks, stenographers, divisional salesmen and other categories of workers, details whereof need not be set out in full at this stage. The case of the Union was that as far back as June, 1951, the workers of the Delhi office had made a representation for an increase in pay; the representation was repeated in April, 1952. As the management did not accede to their request a union of Lipton employees was formed in September 1953. This Union framed a charter of demands and submitted it in December, 1953. The charter of demands consisted of a large number of items and as the management contended that it %,as not in a position to meet the demands, certain conciliation proceedings followed. They, however, came to nothing and on 1/10/1954, the industrial dispute between the Lipton, Ltd., and the Union was referred to the Additional Industrial tribunal, Delhi, for adjudication. The reference set forth in a sub-joined schedule the matters upon which adjudication was necessary, and the schedule contained twenty terms of reference out of which the two items with which we are now concerned related to (a) fixation of grades and scales of pay including the question whether the new scales should be given retrospective effect from 1/01/1953, and (b) bonus for each of the years 1951, 1952 and 1953. After hearing the parties the tribunal made its award on 18/08/1955. It disallowed the claim of bonus, but as to the fixation of grades and scales of pay it allowed an increase of about 20 per cent. to all workers over their present wages and proportionate increase in the dearness allowance, details whereof we shall state at a later stage. As to overtime payment which was item no. 8 of the terms of reference the tribunal said: ` Since the company is allowed by law to take 48 hours work in a week from its employees, it is only fair that if a worker puts in over-time work in any week within a -total of 48 working hours, he should be only paid at the single rate for all over-time work that he puts in between 39 and 48 hours in the week. If the over-time work done by the worker brings his total working, hours during the week to more than 48 hours, any excess over-time work above 48 hours should be paid at double the rate. I direct accordingly.` It may be stated here that there was a dispute about the working hours also and the tribunal changed the working hours from 9-30 a.m.-5 p.m. to 10 a.m.5 p.m. on week-days with half an hour's interval for lunch, and 10 a.m. to I p.m. on Saturdays-thus bringing the total to 36 hours in a week,. The question of over-time arose only if a workman was asked to Work in excess of the working hours fixed by the tribunal. On 12/10/1955, the Union made an application in which it stated that the figure ` 39 ` occurring in paragraph 24 of the award relating to over-time payment was obviously a mistake for ` 36 `; because the learned tribunal had fixed. in paragraph 23 of the award that the working hours of a workman should be 36 hours a week. The learned tribunal considered this application without any notice to the present appellant and corrected the error by amending the figure 39 to 36. The tribunal proceeded on the footing that the mistake was a clerical error due to an accidental slip which could be corrected under r. 23 of the Industrial Disputes (Central) Rules, 1947. Against the award of the Industrial tribunal three appeals were taken to the Labour Appellate tribunal (Lucknow bench). The two main appeals before the Appellate tribunal, namely, No. 272 of 1955 and No. 282 of 1955, were filed by the Lipton, Ltd., and the Union respectively and related to the various items of the terms of reference on which the Industrial tribunal had given its decision. The third appeal, No. 327 of 1955, related to the subsidiary matter of over-time payment regarding which the Industrial tribunal had amended its award. So far as the two items with which in Civil Appeals Nos. 713 and 714 of 1957 we are now concerned, the Labour Appellate tribunal in its decision dated 25/05/1956, upheld the decision of the Industrial tribunal as respects fixation of grades and scales of pay comprised in the term of reference numbered 1 (a); it also upheld the decision of the Industrial tribunal to give retrospective effect to the new scales of pay from 1/01/1954, which was covered by the term of reference numbered I (b). As to bonus, which was item 4 of the terms of reference, the Appellate tribunal upheld the decision of the Industrial tribunal with regard to the years 1952 and 1953 but for 1951 it awarded an extra two months salary as bonus for that year in addition to the bonus of one month's salary which the Lipton, Ltd., had already granted ex gratia to the workmen. As to the subsidiary appeal relating to the over time payment, the Appellate tribunal agreed with the view of the Industrial tribunal that there was an error in computing the working hours and the error being of a clerical nature, it was open to the tribunal to correct it.
(3.) FROM the decision of the Labour Appellate tribunal in the three appeals in question, the appellant obtained special leave to appeal to this court on 27/06/1956, and in pursuance of the order of this court granting such special leave, the present appeals have been preferred. Civil Appeal No. 715 of 1957. It is now convenient to dispose of Civil Appeal No. 715 of 1957. We have no doubt in our mind that the error in computing the working hours with regard to over-time payment was due to an 'accidental slip in making the calculation; it was nothing but a clerical error which the Industrial tribunal was entitled to correct even without notice to the appellant. The learned Attorney General who appeared for the appellant in these three appeals has not pressed Appeal No. 715 of 1957. This appeal must accordingly be dismissed with costs. Civil Appeals Nos. 713 and 714 of 1957. We now turn to the other two appeals, namely, Civil Appeals 713 and 714 of 1957. We have already stated that the only points which survive for decision are those relating to items 1(a), 1(b) and 4 of the terms of reference. These items relate to fixation of grades and scales of pay, whether retrospective effect should be given to the new scales of pay, and bonus for 1951. The other items of the award relating to City compensatory allowance, leave, holidays, etc., have not been challenged before us. We are, therefore, saying nothing about those items of the award, which must necessarily stand. It may be made clear, however, at this stage that one of the points taken before the Industrial tribunal on behalf-of the Lipton, Ltd., was that the Industrial tribunal had no jurisdiction to make an award in respect of employees of the Delhi office who were employed outside-the State of Delhi. This point of jurisdiction was decided against the appellant and the Industrial tribunal pointed out that all the workmen of the Delhi office, whether they worked in Delhi or not, received their salaries from the Delhi office; they were controlled from the Delhi office in the matter of leave, transfer, supervision, etc., and, therefore, the Delhi State government was the appropriate government within the meaning of s. 2 of the Industrial Disputes Act, 1947, relating to the dispute which arose between the Lipton, Ltd., and the Union and under s. 18 of the said Act the award made by the tribunal was binding on all persons employed in the Delhi office. The Appellate Tribunal upheld the decision of the Industrial tribunal on this point and though this question of jurisdiction was raised in the appeals before us, it was not seriously pressed by the learned AttorneyGeneral. We are of the view that the Industrial tribunal had jurisdiction to adjudicate on the dispute between the Lipton, Ltd., and its workmen of the Delhi office. ;