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Hind Cycles Ltd., And Another v. Workmen .

Supreme Court Of India

Feb 23, 1972

Judgment

Subsequent
References

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Factual and Procedural Background

The dispute arises from Industrial Tribunal Reference (IT) No. 258 of 1964 concerning multiple issues between the appellant-company and its workmen represented by the Steel Mazdoor Sabha, including wages, classification, dearness allowance, production bonus, and gratuity. Because the adjudication was protracted—assessors were still collecting data, particularly on production bonus—the union sought interim monetary relief in line with the Central Wage Board for Engineering Industries’ recommendations dated 12 February 1966, accepted by the Central Government on 23 July 1966. On 26 April 1968 the Tribunal granted interim relief at those recommended rates. The employer appealed to the Supreme Court by special leave, challenging that interim order.

Legal Issues Presented

Whether the Industrial Tribunal was justified in granting interim relief to the workmen pending final adjudication.
Whether, and to what extent, the appellant’s claimed financial incapacity should affect the quantum of interim relief.
Whether the Tribunal misconstrued prior settlements and the eligible categories of workmen when fixing interim relief.

Arguments of the Parties

Steel Mazdoor Sabha (Workmen)

Interim relief is warranted because the main reference has been pending since 1964 and final adjudication is unlikely soon.
The Central Wage Board’s recommendations, already accepted by the Government, should guide the interim payment rates—Rs 6 per month for workers earning Rs 150–250 and Rs 5 per month for those earning Rs 250–500.
The company’s financial position is sound enough to bear the additional burden.

Appellant-Company

Subsequent to the 1964 reference, substantial payments under various settlements have already enhanced workmen’s emoluments, making further interim relief unnecessary.
The amounts demanded (approximately Rs 1.92 lakhs per year) are unaffordable because the company incurred a loss exceeding Rs 37 lakhs in 1967-68.
The Tribunal misunderstood both the nature of the settlement payments (allegedly production-linked) and the categories of workers eligible for interim relief.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Supreme Court deliberately refrained from making factual findings on the company’s financial capacity or on the merits of previous settlements, noting that such matters are still before the Tribunal and expressing concern about prejudicing the final award. Instead, the Court focused on:

Pendency and Delay: The reference has remained unresolved since 1964, with further delay anticipated due to outstanding assessor reports, especially on production bonus.
Need for Interim Relief: Given this prolonged pendency, some relief was considered necessary to protect workmen’s interests pending final adjudication.
Equitable Adjustment: Without endorsing the Tribunal’s reasoning, the Court balanced the competing concerns by reducing the interim relief to one-third of the Tribunal’s rate.
Temporal Limitation: Payments at the reduced rate are limited to a two-year period starting 1 April 1968, and thereafter at the same rate until the final award issues.
Payment Schedule: Half of the arrears are to be paid within six weeks, the remainder within three months, with current monthly payments due by the 5th of each month (first on or before 5 April 1972).
Non-Prejudice Clause: The Court expressly clarified that its order is an interim measure only and should not be construed as agreement with the Tribunal’s findings on any substantive issue.
Directive for Expedition: The Tribunal was urged to expedite proceedings and instruct assessors to finish their work promptly.

Holding and Implications

MODIFIED AND DISPOSED OF.

The Supreme Court modified the Tribunal’s order by reducing interim relief to one-third of the original rate for a specified period and establishing a payment schedule, while leaving all substantive issues open for final determination by the Tribunal. The decision provides immediate, albeit reduced, financial support to the workmen without setting a precedent on the underlying wage or capacity issues, which remain subject to the forthcoming final award.

Show all summary ...

C.A Vaidialingam, J.— In this appeal, by special leave Mr G.B Pai, learned counsel for the appellant, challenges the award, dated April 26, 1968, of the Industrial Tribunal, Maharashtra, Bombay, in Reference (IT) No 258 of 1964 granting interim relief to workmen according to the recommendations of the Central Wage Board for Engineering Industries The main reference itself takes in several matters, such as fixation of wage scales, classification, dearness allowance, production bonus, gratuity etc.

2. The Steel Mazdoor Sabha, representing the workmen filed an application for grant of interim relief on the ground that the proceedings before the Tribunal are not likely to come to an end at an early date. In fact, the application was filed, for the grant of interim relief, based on the recommendations for payment of interim relief, made by the Central Wage Board for the Engineering Industries on February 12, 1966 and accepted by the Central Government on July 23, 1966. The claim on behalf of the workmen was that they must be paid interim relief at the rate of: (a) Rs 6 per month in respect of workmen earning wages above Rs 150 but not more than Rs 250 per month, and (6) Rs 5 per month in respect of workmen earning above Rs 250 but not more than Rs 500 per month.

3. It is brought to our notice that in view of certain technical aspects involved in the adjudication of certain matters covered by the Reference, the Tribunal has appointed Assessors for making recommendations regarding those matters. It is further represented that the Assessors appointed, at the suggestion of the employers have submitted their report; but in respect of Production bonus, the assessors appointed at the suggestion of the workmen have yet to investigate the matter and submit their report. Quite naturally, some more time may elapse by the time the final award is passed by the Tribunal.

4. The claim of the workmen for payment of interim relief was contested by the appellants on the ground that after the Reference, under certain Settlements, they have made substantial payments which have added to the emoluments of the workmen and hence no interim relief is necessary to the workmen. They further pleaded that if amounts have to be paid on the basis of the interim relief claimed by the workmen, the company will not be able to bear the financial burden inasmuch as it has suffered a loss of over 37 lakhs rupees during the year 1967-68, and as even, according to the workmen, the additional burden that the company will have to bear on that score will be in the region of 1.92 lakhs a year.

5. The Tribunal has proceeded on the basis that the additional emoluments, claimed to have been paid by the appellants after the Reference, must be considered to be payments made for the increased production shown by the workmen. This view of the Tribunal is criticized by Mr Pai on the ground that the nature of the payment made under the settlement has been misunderstood by the Tribunal. Counsel has also pointed out that even the category of workmen who are eligible for interim relief as claimed by the Sabha, has also been misunderstood by the Tribunal. The more serious attack against the order of the Tribunal is that it has not considered one of the very material factors, to be taken into account for such purpose, namely, the financial capacity of the appellant to bear the additional burden. Mr Pai, no doubt attempted to show by reference to the records that the appellant will not be able to bear the financial burden. Mr H.K Sowani also tried to satisfy us that the appellant's financial capacity is sound.

6. We have thought it unnecessary to deal with the material on record, because such material will have to be considered by the Tribunal before a final adjudication is made by it in respect of matters referred to it. As the matter is still pending before the Tribunal, we have refrained from considering the material on record and express an opinion on them one way or other, as that will embarrass the Tribunal in its final adjudication.

7. The reference itself was made as early as 1964, but it has not been possible for the Tribunal to make the final award within a reasonable time. It also looks as if some more time may elapse before the Report of the Assessors regarding Production Bonus is available to the Tribunal. The passing of the final Award itself will take some time after the receipt of this report. Having regard to these circumstances, we have considered it necessary that the rate awarded by the Tribunal can be reduced without prejudice to the rights of the parties concerned to have their full say regarding the fixation of the wage-scales, dearness allowance, etc. at the time of the passing of the final award. Having this in view, we consider it proper that the appellant should, pay at one-third the rate directed in the order of the Tribunal and that too only for a period of two years. We are restricting the period as the Tribunal has granted interim relief with effect from April 1, 1968. As mentioned earlier, the appellants will pay at the rate indicated by us, only for a period of two years.

8. The appellants will also pay at the same rate fixed by us, from today till the passing of the final award by the Tribunal. It is needless to state that the amounts that are now paid by virtue of this order will be suitably adjusted, depending upon the final directions that may be given in the award.

9. We may also point out that it is very desirable that the Tribunal should try to expedite the proceedings at all stages and also give suitable directions to the Assessors to complete their work as early as possible.

10. Regarding the arrears that have been directed to be paid by the order for a period of two years and at the rate specified earlier, the appellants will pay half of the said arrears within six weeks from today and the balance within three months from today. The amounts that are to be paid from today till the passing of the final award will be paid on or before the 5th of every month, the first payment is to be made on or before the 5th of April, 1972.

11. We make it very clear that by reducing the rate of interim relief granted by the Tribunal, we should not be understood that we are in agreement with the view expressed by the Tribunal in the order under attack except as to quantum. We express no opinion regarding the correctness of the directions contained in the order of the Tribunal. The directions given by us regarding payment by the appellant at a particular rate and for a particular period as also for the future are purely as an interim measure in view of the long pendency of the proceedings before the Tribunal, whatever may be the reasons for such pendency.

12. In the result, the order of the Tribunal will stand modified as directed above; and the appeal is, accordingly, disposed of in terms of the directions contained in this Judgment. There will be no order as to costs.