{"id":210894,"date":"1975-05-02T00:00:00","date_gmt":"1975-05-01T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/killick-nixon-limited-vs-killick-allied-companies-on-2-may-1975"},"modified":"2016-12-23T06:55:41","modified_gmt":"2016-12-23T01:25:41","slug":"killick-nixon-limited-vs-killick-allied-companies-on-2-may-1975","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/killick-nixon-limited-vs-killick-allied-companies-on-2-may-1975","title":{"rendered":"Killick Nixon Limited vs Killick & Allied Companies … on 2 May, 1975"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Killick Nixon Limited vs Killick & Allied Companies … on 2 May, 1975<\/div>\n
Equivalent citations: 1975 AIR 1778, \t\t 1975 SCR 453<\/div>\n
Author: P Goswami<\/div>\n
Bench: Goswami, P.K.<\/div>\n
           PETITIONER:\nKILLICK NIXON LIMITED\n\n\tVs.\n\nRESPONDENT:\nKILLICK & ALLIED COMPANIES EMPLOYEES UNION\n\nDATE OF JUDGMENT02\/05\/1975\n\nBENCH:\nGOSWAMI, P.K.\nBENCH:\nGOSWAMI, P.K.\nBEG, M. HAMEEDULLAH\nBEG, M. HAMEEDULLAH\nALAGIRISWAMI, A.\nUNTWALIA, N.L.\nKHANNA, HANS RAJ\nBHAGWATI, P.N.\n\nCITATION:\n 1975 AIR 1778\t\t  1975 SCR  453\n 1975 SCC  (2) 260\n CITATOR INFO :\n RF\t    1976 SC2439\t (6,7,9,10)\n RF\t    1977 SC 322\t (26)\n D\t    1978 SC 419\t (12)\n R\t    1980 SC  31\t (8)\n D\t    1986 SC1794\t (7)\n E&D\t    1992 SC 504\t (31)\n\n\nACT:\nIndustrial    Dispute--Fixation\t   of\t ceiling    on\t  D.\nA.--Principles.\n\n\n\nHEADNOTE:\nThe  appellant-company\twanted to  introduce  the  following\nscheme of D.A for its clerical staff and drivers.\n-----------------------------------------------------------\nBasic Pay slabs.    Percentage of\t       Variation for\n\t\t    basic salary\t     every 10 points\n\t\t   (C.P.I. 441-450)\t     of C.P.I.\n------------------------------------------------------------\n1st Rs. 100\t       120\t\t\t  5%\n2nd Rs. 100\t\t40\t\t\t  2%\nRs. 201 to Rs. 500\t30\t\t\t  1%\nOver Rs. 500\t\t25\n--------------------------------------------------------------\n\t   Maximum D.A. Rs. 325\n==============================================================\nPlacing\t the  ceiling  of  Rs.\t325  on\t the  D.A.  was\t not\nacceptable to the employees and a reference was made to\t the\nIndustrial Tribunal and the Tribunal removed the ceiling.\nIn appeal to this Court,\nHELD:\nWhile  the question of the desirability of ceiling  on\tD.A.\nwas  not in issue in any references to Tribunals of  appeals\ntherefrom,  referred  to  by the parties,  the\tquestion  of\nimposing  a  ceiling  on D. A. is not  an  absolutely  alien\nphenomenon.   Although\tit might not have been\tthe  general\npractice, ceiling was not rejected out of hand as irrational\nor unjust by unions in the course .of collective  bargaining\nin  the\t Bombay\t region, in which  the\thead-office  of\t the\nappellant  is situated.\t In the case of the employees  under\nthe  Central Government also a kind of ceiling has  been  in\nvogue. [461F.G., 462A]\n(1)  The problem of imposing or removing a ceiling on D.  A.\nhas  to be viewed from the following among  other  important\naspects :\n\t      (1)   Condition of the wage scale prevalent in\n\t      the company.\n\t      (2)   Condition of the wage level prevalent in\n\t      the industry and the region.\n\t      (3)   The\t wage  packet  as a  whole  of\teach\n\t\t\t    earner  in the company with all  ameni\nties  and\n\t      benefits\tand his ability and potency to\tcope\n\t      with   the  economic  requirements  of   daily\n\t      existence\t  consistent  with  his\t status\t  in\n\t      society, responsibilities, efficiency at\twork\n\t      and industrial peace.\n\t      (4)   The\t position of the company  viewed  in\n\t      relation\tto other comparable concerns in\t the\n\t      industry and the region.\n\t      (5)   Peremptive\t   necessity\tfor\tfull\n\t      neutralisation  of the cost of living  at\t the\n\t      rock-bottom  of  wages scale if  at,  or\tjust\n\t      above, the subsistence level.\n\t      454\n\t      (6)   The\t rate  of  neutralisation  which  is\n\t      being  given to the employees in\teach  salary\n\t      slab.\n\t      (7)   Avoidance  of  huge distortion  of\twage\n\t      differentials   taking  into   reckoning\t all\n\t      persons employed in the concern.\n\t      (8)   Degree  of sacrifice necessary  even  on\n\t      the part of workers in general interest.\n\t      (9)   The\t compulsive  necessity\tof  securing\n\t      social   and  distributive  justice   to\t the\n\t      workmen.\n\t      (10)  Capacity  of  the company  to  bear\t the\n\t      additional burden.\n\t      (11)  Interest of national economy.\n\t      (12)  Repercussions  on other  industries\t and\n\t      society as a whole.\n\t      (13)  The state of the consumer price Index at\n\t      the time of the decision.\n\t      (14)  Forebodings\t and  possibilities  in\t the\n\t      foreseeable future as far as can be envisaged.\n\t      (15)  Price indices have now assumed  menacing\n\t      figures.Any problem regarding wage or D.A. has\n\t      to be considered in that\tbackground  and\t  at\n\t      the same time not losing sight of the national\n\t      economy. [466E-H, 467A-C]\nII.  The  removal  of  ceiling in the instant  case  is\t not\njustified  even\t though,  on the.  appellant  company  is  a\nprosperous  company  with capacity to  bear  the  additional\nfinancial  burden  if the ceiling is removed, and  (ii)\t the\nconsumer  ,rice\t index has been soaring higher\tand  higher;\nbecause : [465A-B, 467D]\n\t      (a)   The\t unprecedented rise in the  consumer\n\t      price index produces steep rise in D.A.[458H]\n\t      (b)   The absence of ceiling on D.A. can\tthus\n\t      result in curious anomalous situations wherein\n\t      the  pay\tpacket of the clerical\tstaff  would\n\t      exceed  the  pay packet  of  junior  executives\n\t      which would hardly be conducive to discipline,\n\t      efficiency and effective exercise of  control.\n\t      [463-GA]\n\t      (c)   Although  the appellant employs a  total\n\t      of  1142 workmen in its various factories\t and\n\t      branches,\t the  dispute relates  to  only\t 265\n\t      workers in the head-office.  A general problem\n\t      like  imposition\tof  ceiling  on\t D.A.  in  a\n\t      company  cannot be treated on the\t statistical\n\t      burden  relevant\tonly  to a  section  of\t the\n\t      employees. [463C-E]\n111.\t  D.A.\tbeing intimately connected with the cost  of\nliving, the matter cannot be judged by the test submitted by\nthe workmen, namely, that there cannot be a ceiling on\tD.A.\nunless there is a ceiling on profits. [467-F]\nIV.  Also, in dealing ',with the problem of ceiling on D.A.,\nthe  Tribunal's view that there should not be a\t ceiling  on\nD.A.  unless the company would be required to close down  if\nthe ceiling is removed, is not correct. [465-H]\nV.   At what particular amount there should be a ceiling  on\nD.A.  is  a matter which will have to be gone  into  by\t the\nTribunal.   But\t so far as the lowest paid employees  at  or\njust  above  subsistence  level\t are  concerned,  they\t are\nentitled  to  100  per\tcent or at  any\t rate  95  per\tcent\nneutralisation\tof  the rise in cost of living,\t and  hence,\nthere  should  be no ceiling on D.A.  payable  to  employees\nwithin the slab of first Rs. 100\/- unless it can be shown by\nthe management that the rate of neutrailsation in their case\nis  more than 100per cent.  The manner in which the  ceiling\nmay be imposed, that is, at a certain amount as the  outside\nlimit  of  the D.A. or by reference to the quantum  of\tD.A.\npayable\t at  a certain wage level, or in any  other  manner,\nwould also\n455\nhave  to be decided by the Tribunal in the exercise  of\t its\njudicial  discretion The Tribunal will have to perform\tthis\ndelicate  task\tby striking a balance the  weightage  to  be\ngiven  to  any\tprinciple being variable  according  to\t the\nconditions-and\tkeeping\t in view the dominant  principle  of\ndoing social justice. [467DE, CH, 468A-C]\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 734 & 735
\nof 1973.\n<\/p>\n
Appeal\tby  special  leave from the  Award  dated  the\t24th
\nJanuary,  1973\tof the Industrial Tribunal, Bombay  in\tRef.
\nNos. (IT) 149 of 1966 & (IT) No. 257 of 1966.
\nA.   K. Sen, I. N. Shroff, D. G. Shroff, M. S. Gagrat’ &  F.
\nD. Dalmania, for the appellant.\n<\/p>\n
R.   J. Mehta, for the respondent
\nA.   K. Gupta, for the, applicant\/intervener (Killick  Nixon
\nEmployees’ Union)
\nD.   C.\t Shroff,  O. P. Mathur, K. J. John, F. K.  Kaka\t and
\nJ.  .B.\t Dadachanji, for the  applicant\/intervener  (Cynamid
\nIndia Ltd.)
\nG.   B.\t Pai, S. V. Gupte, O. C. Mathur, K. J. John,  A.  G.
\nMeneses\t and J. B. Dadachanji, for the\tapplicant\/intervener
\n(Voltas Ltd.).\n<\/p>\n
Janardan Sharma and Jitendra Sharma, and K. T. Sule, for the
\napplicant\/intervener (Cynamid Employees’ Union)
\nJanardan    Sharma    and   Jitendra   Sharma,\t  for\t the
\napplicant\/inter-vener
\nThe Judgment of the Voltas & Vol Kart Employees Union  court
\nwas delivered by
\nGoswami, J.-The only question with which we are concerned in
\nthese appeals by special leave is: Should there be a ceiling
\non dearness allowance in this case ?\n<\/p>\n
On  May 11, 1966, the employers gave a notice of change\t for
\nplacing\t a ceiling on dearness allowance (for brevity  D.A.)
\nalready in vogue at the figure of Rs. 325\/-.  Since this was
\nnot  acceptable\t to  the  union, both  sides  agreed  for  a
\nreference  to the Industrial Tribunal, Maharashtra.  By\t the
\nimpugned order of January 24, 1973, the Tribunal removed the
\nceiling and hence this appeal.\n<\/p>\n
‘Mere  was also another demand with regard to the  D.A.\t for
\ndrivers\t on the same basis as that for clerical staff.\t The
\nTribunal following this Court’s decisions in Bengal Chemical
\n& Pharmaceuticals Works v. Its Workmen<\/a>(1) and Greaves Cotton
\nand Co. and Others v. Their Workmen<\/a> (2) allowed the  union’s
\nclaim for the two categories to be treated on equal footing.
\nThis  Court  held  in the  above  decisions  that  employees
\ngetting the same wages should get the same D.A. irrespective
\nof  whether  they  are working as clerks or  as\t members  of
\nsubordinate  staff or as factory workmen.  This part of\t the
\naward is, therefore, rightly not challenged before us.
\n(1)  [1969] 2 S. C. R. 113.\n<\/p>\n
(2)  [1964] 5 S.C. R. 362.\n<\/p>\n
10 SC\/75-30
\n456<\/span>
\nThe  reference was made in June 1966.  There was an  earlier
\naward in the reference.\t At the instance of the\t management,
\nthe High Court set it aside and remanded the above two items
\nof  dispute  alone for disposal.  The Tribunal\thad  in\t the
\nearlier\t award\trejected  all  other  claims  of  the  union
\nincluding that of revision of wage scale.
\nThe  only point that survives, therefore, is with regard  to
\nthe ceiling on D.A. When the reference was made in June 1966
\nthe cost of living index for  Bombay city was 626.   At\t the
\ntime of the impugned award in January  1973 it rose  to\t 906
\nand in December 1974 it reached 1336 mark.
\nVarious\t expert committees and commissions have\t dealt\twith
\nthe question of wages and D.A. from time to time.   Dearness
\n‘allowance  as such is not known in foreign  countries\twith
\nthe exception of Ceylon and Pakistan.  Whenever there is any
\nsignificant rise in the cost of living in foreign  countries
\nthere is a revision of wage rather than payment of any\tD.A.
\nas such.  D.A. in India is a relic of the First World War to
\ncope  with the rise of cost of living although then  in\t the
\nshape  of ad hoc payments not linked to any  consumer  price
\nindex.\tDuring the Second World War it was introduced in the
\nform  of  a Grain Compensation Allowance to  compensate\t the
\nhardship  of  the  employees  for  the\trise  in  prices  of
\nfoodgrains.  So far as the Central Government employees were
\nconcerned,   the  Government  constituted  the\t First\t Pay
\nCommission  in\t1947  to examine the  wage  structure.\t The
\nGovernment  of India also set up a Committee on\t Fair  Wages
\nand  the  report was submitted in June 1949.  A\t Second\t Pay
\nCommission  was also constituted by the Government in  1959.
\nThe Government of India in August 1964 constituted a One-man
\nIndependent  Body  to  enquire into  the  question  of\tD.A.
\npayable\t to the Central Government employees and the  report
\nwas  submitted in January 1965 by Shri S. K. Das.   In\tJuly
\n1966, the Government of India appointed a Dearness Allowance
\nCommission presided over by Shri P. B. Gajendragadkar.\t The
\nCommission  examined the principles which should govern\t the
\ngrant of D. A. to Central Government employees in future and
\nwas  also  required to review the formula for the  grant  of
\nD.A.  as  recommended by the Second Pay\t Commission  and  to
\nrecommend,   changes.  if  any.\t  In  December\t 1966,\t the
\nGovernment  of India set up a National Commission on  Labour
\npresided  over by Shri P. B. Gajendragadkar with  exhaustive
\nterms  of reference and the Commission submitted its  report
\non August 28, 1969.  Then in sequence came the report of the
\nThird Pay Commission in 1973.  The parties have\t extensively
\nquoted from the above reports during arguments.
\nHistorically   and   by\t the  industrial  texts\t  and\talso
\nobservations of various commissions and committees, D.A. was
\nregarded  as “applicable to those employees  whose  salaries
\nare at the subsistence level or little above  it…………
\nin  order to enable them to face the increasing dearness  of
\nessential  commodities”. .(See Gajendragadkar Commission  on
\nDearness Allowance, May, 1967).\n<\/p>\n
Like all changes in life and in continuous march in progress
\nof society the concept of D.A. also may change to take in  a
\nwider range
\n457<\/span>
\nof commodities and services to make life worth living as far
\nas practicable subject to compelling limitations of  general
\ninterest.  We recognise that the old definition of D.A.\t may
\nnot  even  serve the climate of new aspirations\t of  various
\nclasses\t of  employees of this vast  country.\tLuxuries  of
\nYesterdav  may be the comforts of to-day and necessities  of
\ntomorrow.  Economic solutions must reckon the turnabouts  in
\nsocial\turges.\t Because even the  worm\t turns.\t  Industrial
\nadjudication which has not the limitations of the  ordinary,
\ncourts\thas to respond to the needs of changing society\t and
\nit may be possible to widen the scope of D.A. if that serves
\nthe  cause of general welfare.\tThere may be  no  inexorable
\nrule tying down economic existence to definitions of  bygone
\ndays,  if  unsuitable or irrelevant in the  context  of\t the
\ntimes.\n<\/p>\n
The National Commission on Labour (1969) while dealing\twith
\nD.A. observed :\n<\/p>\n
\t      “We  consider that payment of D.A. has  to  be
\n\t\t\t    viewed in broader context of wage poli
\ncy,  many
\n\t      elements\tof which have been discussed in\t the
\n\t      previous\tchapter.   In a\t developing  economy
\n\t      where price stabilisation has proved  ineffec-
\n\t      tive, or the inflationary potential cannot  be
\n\t      controlled,  any arrangement for\tcompensating
\n\t      for  price rise will have its  raisin  d’etre.
\n\t      At  the same time, a direct linkage between  a
\n\t      rise  in\tthe index and the  D.A.\t may  create
\n\t      problems\tfor  price  stabilisation.   It\t can
\n\t      hardly be disputed that the index is the\tbest
\n\t      available indicator of changes of price level.
\n\t      The reason for a disproportionately high\tD.A.
\n\t      is  the fixation of basic wage on a  date\t far
\n\t      remote  from the present”. (Para, 16,39,\tpage\n<\/p>\n
\t      240).\n<\/p>\n
\t      The Commission further observed
\n\t      “It is obvious that unless money wages rise as
\n\t      fast  as the consumer prices, it would  result
\n\t      in  an erosion of real wages.  But the  extent
\n\t      of  its  impact will depend on the  margin  of
\n\t      cushion  available  at  different\t levels\t  of
\n\t      income……… We accordingly recommend\tthat
\n\t      95  per cent neutralisation should be  granted
\n\t      against  rise  in\t cost  of  living  to  those
\n\t      drawing\tminimum\t  wage\t in    non-scheduled
\n\t      employments”. (para 16.47, page 242).\n<\/p>\n
The  Third  Pay Commission in its Interim Report  made\tsome
\nsignificant observations :\n<\/p>\n
\t      “We need hardly emphasise that it would be  an
\n\t      exercise in futility to keep on increasing the
\n\t      emoluments of Central Government employees, if
\n\t      these  increases\tare largely wiped  out\tsoon
\n\t      afterwards by increases in prices of goods and
\n\t      services.\t There is, therefore, paramount need
\n\t      to   maintain  price  stability  and  we\t are
\n\t      confident\t that the Government will  take\t all
\n\t      necessary fiscal, monetary and other measures,
\n\t      including\t  control   over   production\t and
\n\t      distribution, to maintain the price line”.\n<\/p><\/blockquote>\n
458<\/span><\/p>\n
D.A.  was  primarily intended to be  a\ttemporary  expedient
\nand  .,as  sought to be made available as  a  protection  to
\nthose who have of cushion at all in their wage packet in the
\nface  of  any appreciable rise in prices.  Some\t relief\t was
\ngiven  to others also.\tThe hope of ‘he two Pay\t Commissions
\nthat  prices  will decline and stablise,  never\t same  true.
\nD.A.  has, therefore, come to stay.  The price indices\thave
\nnow assumed menacing figures.  This is the stark reality  of
\nthe situation and any problem regarding wage or D.A. has  to
\nbe considered in that background at the same time not losing
\nsight of the national economy.\n<\/p>\n
In considering the question of D.A. the total wage packet of
\nthe  employee must be kept in view.  The first and  foremost
\nconsideration  is the case of the employees at\tthe  minimum
\nwage  level.  it must, however, be remembered  that  minimum
\nwage  should  enable  an employee not merely  for  the\tbare
\nsustenance   of\t life  but  for\t the  preservation  of\t his
\nefficiency  by\tproviding  for some  measure  of  education,
\nmedical requirements and amenities.  The concept of  minimum
\nwage as also of fair wage cannot be static.  It will  change
\nwith the progress of time and development.
\nIn  a  recent  decision of this\t Court\tin  Bengal  Chemical
\n(supra)\t ,the  principles  for fixing of D.A.  came  up\t for
\nconsideration.\tAfter reviewing the earlier decisions,\tthis
\nCourt held as follows :-\n<\/p>\n
\t      “1. Full neutralisation is not normally given,
\n\t      except to the very lowest class of employees.\n<\/p><\/blockquote>\n
\t      2.    The purpose of dearness allowance  being
\n\t      to neutralise a portion of the increase in the
\n\t      cost  of living, it should ordinarily be on  a
\n\t      sliding  scale and provide for an increase  on
\n\t      the rise in the cost of living and a  decrease
\n\t      on a fall in the cost of living.\n<\/p><\/blockquote>\n
\t      3.    The\t basis\tof  fixation  of  wages\t and
\n\t      dearness allowance is industry-cum-region.\n<\/p><\/blockquote>\n
\t      4.    Employees getting the same wages  should
\n\t      get the same dearness allowance,\tirrespective
\n\t      of  whether  they\t are working  as  clerks  or
\n\t      members\tof  subordinate\t staff\tor   factory
\n\t      workmen.\n<\/p><\/blockquote>\n
\t       5.   The additional financial burden which  a
\n\t      revision\tof  the wage structure\tor  dearness
\n\t      allowance\t would impose upon an employer,\t and
\n\t      his  ability  to bear such  burden,  are\tvery
\n\t      material and relevant factors to be taken into
\n\t      account”.\n<\/p><\/blockquote>\n
It is submitted on behalf of the employers that in a  scheme
\nof D.A. linked not only to the cost of living index but also
\nto  basic wages by way of slabs, there must be a ceiling  as
\notherwise  it will not be a compensation for increased\tcost
\nof  living but additional remuneration unconnected with\t the
\nincreasing  cost  of  living at the  lowest  level.   It  is
\nemphasised  that  where\t there is a  dual  link,  a  ceiling
\nremoves\t the incongruity in the D.A. rising with  the  basic
\nwages  out of proportion to the cost of living\tcompensation
\nat the
\n459<\/span>
\nlowest level.  It is fairly admitted that the ceiling  fixed
\nact  any given time on the basis of a possible rise  in\t the
\ncost  of  living  index in the\tforeseeable  future  may  be
\naltered if the rise in the cost of living index later  makes
\nthe ceiling unreflective of the requisite neutralisation  of
\nthe increase in the cost of living at the lowest level.\t  It
\nis  submitted that without a ceiling it will  be  impossible
\nfor  any  management to plan the business of  the  employers
\nincluding production, expansion, etc. without any  certainty
\nof wage bill being estimated at any definite figure for\t the
\nforeseeable future.\n<\/p>\n
On  the other hand it is submitted on behalf of the  workers
\nthat  there  should be no ceiling on D.A. till\tthe  workers
\nreach  the level of living wage.  It is also submitted\tthat
\nin the interest of social justice there should be no ceiling
\non  wages  without first putting a ,ceiling on\tprofits\t and
\ncontrolling and stablising prices.\n<\/p>\n
The award pertains to the clerical staff and drivers working
\nin the Head Office of the appellant numbering about 265\t out
\nof about 743 workmen in its various establishments (page 120
\nof  the\t record).   Out of that also  only  two\t classes  of
\nworkers\t are involved, namely, the clerks and  the  drivers.
\nAmongst the clerical staff. there are three grades, Grade A,
\nGrade\tB   and\t  Grade\t  C   as   under   ,Grade   A:\t Rs.\n<\/p>\n
165-15-240-20-400-E.B.-25-500.\n<\/p>\n
Grade B: Rs. 110-10-150-12-1\/2-200-15-260-E.B.-20-360.
\nGrade C: Rs. 70-5-90-8-130-10-200-E.B.-12-1\/2-250.
\nThe wage scale for drivers is as follows:\n<\/p>\n
Rs. 75-5-100-7-135-7-50-150.\n<\/p>\n
The scheme of D.A. which is sought to be introduced with the
\nceiling is as under\n<\/p>\n
———————————————————–\n<\/p>\n
\t\t      Percentage\t\t Variations
\nBasic Pay slabs\t     of Basic Salary\t\t for every
\n\t\t    (C.P.I. 44 1-450)\t\t 10 points
\n\t\t\t\t\t\t of C.P.I.\n<\/p>\n
===========================================================
\n1st Rs. 100\t       120\t\t\t 5 %.\n<\/p>\n
2nd W.\t100\t\t40\t\t\t 2%\nRs. 201 to Rs. 500\t30\t\t\t 1%\nOver Rs. 500\t\t25\n<\/pre>\n
============================================================
\n\t   Maximum D.A. Rs. 325\/-\n<\/p>\n
============================================================
\nMr.  Mehta, representing the union, has drawn our  attention
\nto.  a\tfew  awards in the Bombay  region  prescribing\tslab
\nsystem\tof D.A. without ceiling.  The first is that  of\t the
\nAhmedabad  Manufacturing & Calico Printing Company  Limited.
\nIt is true that on 4th slab of Rs. 100\/- and balance,  9.75%
\nD.A.  was allowed without imposition of any  ceiling.\tD.A.
\nwas  awarded  by the Industrial Tribunal in this case  on  a
\nslab system at the consumer price index 841-850.  The second
\nis the case of Indian Vegetables Products Limited, Bombay,
\n460<\/span>
\nwhere there was no introduction of any ceiling and 10%\tD.A.
\nat the 3rd slab of Rs. 100\/- and above was granted.  In that
\ncase  the  consumer price index was at 311-320.\t  The  third
\ncase  is  that of Godrej Soap Private  Limited\twhere  again
\nalthough  no ceiling on D.A. was imposed, the  Tribunal\t was
\ndealing\t with  a case when the consumer price index  was  at
\n396-405.   It  is pointed out that in all  the\tthree  above
\ncases  special\tleave  was refused  by\tthis  Court.   That,
\nhowever,  cannot  be a ground for holding  that\t this  Court
\nendorsed  non-imposition of ceiling on D.A. as a  principle.
\nThe question as such was neither raised before the  Tribunal
\nnor before this Court in any of the above cases.
\nMr.  Mehta also filed a list of 25 awards during the  period
\nbetween\t 1st January, 1970 and December, 1974 in the  Bombay
\nregion.\t This was with the object of establishing case for a
\nslab system of D.A. linked to the consumer price index\twith
\npoint variation without ceiling, Mr. A. K. Sen has commented
\nthat some of these awards were as a result of settlement and
\nthe  question of ceiling on D.A. was not even raised  for  a
\ndecision.   In the case of Dorr-Oliver (India) Limited,\t the
\nscale  of pay was fixed on the basis of the  consumer  price
\nindex 700 and D.A. was fixed, if the index rose beyond 700,.
\non a slab system.  It is to be noted that a flat sum of\t Rs.
\n9\/- as D.A. was allowed on the salary of Rs. 5001- and above
\nand for variation for rise of every ten points in slab above
\n700,  Rs.  9\/- was fixed for such slab.\t It is to  be  noted
\nthat there is no percentage basis of D.A. on the salary\t and
\nit  is any linked to the consumer price index.\tIn the\tcase
\nof  Kanji Jadhavji,210 & Company, it is, however, seen\tthat
\nfor  pay in excess of Rs. 210\/- but upto Rs.  670\/per  month
\n1\/2 paisa per rupee per point upto Rs. 180\/- per month\tplus
\n1\/3  paisa per rupee per point in excess of Rs.\t 180\/-\tupto
\nRs. 210\/- plus 1\/4th paisa per rupee per point in excess  of
\nRs.  210\/-  subject to a maximum of Rs. 1.65 per  point\t per
\nmonth  was  allowed.  There is a fixed salary of  Rs.  670\/-
\nbeyond\twhich D.A. was not made admissible.  In the case  of
\nTata  Press  Limited  which  is\t an  award  said  to  be  by
\nsettlement, additional D.A. of 10 per cent has been given on
\nthe basic wage of above Rs. 401, but there is no linkage  to
\nthe  consumer  price index.  In Godavari Sugar\tMills  Mamli
\nPrivate Limited, D.A. stopped at the 4th Rs. 100\/- of  basic
\nsalary.\t  At  this slab 36 per cent D. A. was  awarded\twith
\nvariation of 1 per cent for every ten points rise or fall in
\nthe consumer price index 791-800.  Identical is the case  of
\nanother\t award\tin  the case  of  Somaiya  Organo  Chemicals
\nLimited.   In Britannia Biscuit Company Limited’s  case.  no
\nD.A. has been awarded beyond the salary slab of Rs. 500\/  D.
\nA. was considered in this case when the cost of living index
\nnumber was 301-310 (old series).  In serveral awards in\t the
\ncompilation given by Mr. Mehta, minimum D.A. has been fixed.
\nOn  the\t other hand Mr. Kaka intervening for  Cynamid  India
\nLimited has drawn our attention to a number of awards in the
\nBombay region wherein there appears to he a ceiling on D. A.
\nThese are :\n<\/p>\n
1. National Machinery Manufacturers Ltd. Maharashtra
\nGazette (M.G.G.) dated 30.6.1966.\n<\/p>\n
2. Indian organic Chemicals Ltd. M.G.G. dated 21.11.1974.\n<\/p>\n
461<\/span><\/p>\n
3. The Millowners Association.M.G.G. dated 31.10.1974.\n<\/p>\n
4. PhoeuLx Mills Ltd.\t M.G.G. PaRt I-L dated 22.6.1972.\n<\/p>\n
5.  Bayer (India) Ltd.\t M.G.G. dated 31.1.1974\n<\/p>\n
6.  West Coast Paper MillsM. G. G. dated 20.7.1972\n<\/p>\n
7.  voltas Limited  1. C. R. February 1970′ page 57\n<\/p>\n
8.  Murphy India LimitedM. G. G. dated 27. 7. 1972\n<\/p>\n
9.  Polychen Limited\t M. G. G. dated 6. 8. 1970
\nMr.   Mehta  has,  however,  submitted\tthat  most  of\t the
\nsettlements in pursuance of which awards had been made\thave
\nexpired\t and notices of termination have been served on\t the
\nemployers and in some cases disputes have been raised.
\nThe  management also argued that this Court in\tM\/s  Unichem
\nLaboratories Ltd. v. The workmen (1) noticed in paragraph 33
\nof the decision-\n<\/p>\n
\t      “Another feature of the scheme adopted by\t the
\n\t      Tribunal\tis  that it puts a  ceiling  on\t the
\n\t      employees\t drawing basic wages up to  Rs.\t 300
\n\t      per  month alone being eligible  for  dearness
\n\t      allowance;   whereas   under   the    practice
\n\t      originally obtaining in the company there\t was
\n\t      no such limit.”\n<\/p><\/blockquote>\n
and, therefore, must be held to have approved of  imposition
\nof  ceiling.   We are unable to accept that this  Court\t was
\ncalled upon to decide about the question of. ceiling in that
\nappeal which was at the instance of the employers and not of
\nthe  employees nor against the imposition of  ceiling.\t The
\nmanagement  also  drew our attention to a decision  of\tthis
\nCourt in Remington Rand of India v. Its Workmen<\/a> (2) when the
\nscheme\tof D.A. contained a maximum of Rs. 200 at the  index
\nfigure\t351-360 and the maximum was not interfered  with  by
\nthis Court.  It is sufficient to point out that the question
\nof  desirability of ceiling or otherwise was not at  all  in
\nissue  in  that\t appeal and therefore, this  Court  was\t not
\ncalled upon to pronounce upon the matter.
\nWe,  however, find that in the case of employees  under\t the
\nCentral Government a kind of ceiling has been in vogue.\t For
\nexample\t one of the Second Pay Commission’s  recommendations
\nwas that the benefit of D.A. should in future adjustments be
\nextended to all employees drawing a basic pay below Rs.\t 400
\nper  menses  in such a way that the total of basic  pay\t and
\nD.A. paid to an employee in the pay range of Rs. 300 to\t Rs.
\n400  does not exceed Rs. 400 (page 97, paragraph  16).\t The
\nThird Pay Commission also after fixing D.A. at a  percentage
\nof 3.5 per cent of pay upto the pay range of Rs. 300 fixed a
\nmaximum\t of  Rs.  10 per month and a minimum of\t Rs.  7\t per
\nmonth.\t Similarly for the pay range above 300 a  percentage
\nof 2.5 per cent of pay was fixed subject to a maximum of Rs.
\n20  per\t month\tand  a minimum of Rs.  10  per\tmonth.\t The
\nCommission further recommended that the pay plus D.A. should
\nin no case exceed Rs. 2,400 per month.\n<\/p>\n
(1)  [1972] 1 L. L. J. 576,
\n(2)  [1962] 1 L. L. J. 287,
\n462<\/span>
\nFrom  the  above  one  thing, however,\tis  clear  that\t the
\nquestion  of  imposition  of  ceiling  on  D.A.\t is  not  an
\nabsolutely  alien  phenomenon.\tAlthough it might  not\thave
\nbeen  the general practice, ceiling was not rejected out  of
\nhand  as  irrational or unjust by unions in  the  course  of
\ncollective bargaining in the Bombay region.
\nSo  far\t as  the  workers  involved  in\t these\tappeals\t are
\nconcerned  the\tquestion  whether D.A.\tshould\tcease  at  a
\ncertain\t level of salary does not arise\t for  consideration.
\nThe maximum basic of the highest grade in the case of  these
\nemployees  is  Rs. 500.\t It may, however, be  noted  that  a
\nsystem has been in vogue in the case of Government employees
\nwhere  D.A.  ceases to be admissible on reaching  a  certain
\nlevel  of  salary.   The question remains as  to  whether  a
\nceiling\t should be- placed on D.A. itself, when\t it  exceeds
\nRs. 325 as has been sought to be done by the employers.\t The
\nemployers gave a notice of change for imposition of  ceiling
\non  D.A. in May 1966 when the cost of living index has\tbeen
\non the constant rise each year.\t While the for 1966 was\t 630
\nthose  for the subsequent years from 1967 to 1974 were\t697,
\n740, 766, 797, 832, 876, 982 and 1198.\tIn December 1974  it
\nwas 1336.  The cost of living index being on a constant rise
\nit is necessary to consider the totality of the wage  packet
\nof the workers and other relevant factors in order to decide
\nif a ceiling on D.A. should be imposed.\t In this context our
\nattention  has\tbeen drawn by Mr. Sen to  the  statement  of
\nobjects and reasons to the Additional Emoluments (Compulsory
\nDeposit) Bill 1974 which is as follows :-\n<\/p>\n
\t      “Controlling  inflation  is today\t the  single
\n\t      most   important\ttask  facing  the   country.
\n\t      Periodical  revision of wages and\t adjustments
\n\t      in the rates of dearness allowance, which have
\n\t      been  adopted as remedies for  moderating\t the
\n\t      impact  of  rising prices, have  been  proving
\n\t      ineffective.  In view of the mounting pressure
\n\t      of inflationary forces, payments of additional
\n\t      wages  or\t dearness  allowance  will  give  an
\n\t      upward  thrust to prices and  will  inevitably
\n\t      aggravate\t the situation, and also  neutralise
\n\t      the  effect  of any increase in the  wages  or
\n\t      dearness\tallowance.   In\t the  circumstances,
\n\t      urgent  steps aimed at breaking  this  vicious
\n\t      circle of money incomes chasing prices be came
\n\t      inescapable.    These   measures\t undoubtedly
\n\t      involve some sacrifices by different  sections
\n\t      of  the community.  As a part of\tthese  anti-
\n\t      inflationary  measures, the Additional  Emolu-
\n\t      ments  (Compulsory Deposit)  Ordinance,  1974,
\n\t      was  promulgated by the President on  the\t 6th
\n\t      July, 1974………..\n<\/p><\/blockquote>\n
Reference  to  the above is made in order to  highlight\t the
\ndreadful  consequences\tof inflation and the  inefficacy  of
\nmere wage rise as a solution.\n<\/p>\n
We  may, however, in this connection usefully refer to\twhat
\nthe National Commission on Labour said on this subject:\n<\/p>\n
\t      “Firstly,\t the increased purchasing  power  in
\n\t      the  hands  of  the  workers  on\taccount\t  of
\n\t      compensatory  payments  for rise\tin  cost  of
\n\t      living  forms  a\tsmall part  of\tthe  overall
\n\t      increase
\n463<\/span>
\nin   purchasing\t  power.   Secondly,   the   elasticity\t  of
\ncompensatory  payments\tto  changes in\tcost  of  living  is
\ngenerally  less than unity so that the feed-back must  taper
\noff.   Money  wage  stability, though  important  for  price
\nstability,  is\tseldom a necessary, much less  a  sufficient
\ncondition  for it.  On the other hand, holding of the  price
\nline,  particularly  of the cost of living  is\tan  adequate
\ncondition  for preventing increases in money  wage  payments
\nthat  are  not related to increases in\tproductivity.\tThis
\nalone can prevent a fall in real wages.”\n<\/p><\/blockquote>\n
Before\twe proceed further we have to take note\t of  certain
\nfacts concerning the dispute.  Although the company  employs
\na  total  of  1142  workmen  in-its  various  factories\t and
\nbranches  the present dispute relates to 265 workers in\t the
\nHead  Office (Bombay) out of them.  It is not disputed\tthat
\nthe supervisory staff consisting of 86 members, although not
\ninvolved  in  this reference. have been in receipt  of\tD.A.
\nunder  the same scheme.\t There is no ceiling on D.A. in\t the
\nCalcutta  branch of the company where the workers  are\tpaid
\naccording  to the Bengal Chamber of Commerce’s\trates.\t The
\nindustry-cum-region  aspect may at present take care of\t the
\nfew  employees\tworking in Calcutta.  It  is,  however,\t not
\nunlikely that all the employees of the company may claim  to
\nbe  treated  alike.   There are\t also  disputes\t pending  in
\nrespect\t of  the  subordinate  staff  at  the  Head  Office.
\nWithout\t adding\t further details it is sufficient  to  state
\nthat a general problem like imposition of ceiling on D.A. in
\na  company  cannot  be treated\ton  the\t statistical  burden
\nrelevant  only\tto  a section of the  employees.   Both\t the
\nparties\t realise the importance of this aspect and  produced
\nbefore\tus  a large number of documents\t containing  various
\ndetails including balance-sheets of the company upto 1973 to
\nenable us to have a complete picture of the entire matter.
\nThe management has produced a statement showing the  compar-
\nison  of total emoluments of clerical and supervisory  staff
\nafter  implementation of the award and those of\t the  junior
\nexecutive  staff.   We\thave quoted  therefrom\tshowing\t the
\nfigures\t in  April 1973 and July 1974  with  the  respective
\nindex at 924 and 1194.\n<\/p>\n
It  will be seen that the minimum basic salary of  a  junior
\nexecutive  is  Rs.  400\t and maximum  is  Rs.  1000′.\tWith
\nallowances the junior executive at the minimum gets a  total
\nof  Rs. 700 and at intermediate stages, namely, of  Rs.\t 530
\nand  800,  he  gets  a\ttotal  of  Rs.\t830  and  Rs.\t1150
\nrespectively.\tWhen he reaches the maximum the\t total\twith
\nallowance  is Rs. 1350.\t The clerical staff at\tthe  maximum
\ngrade  which  is  Rs. 500 gets a total amount  of  Rs.\t1230
\ninclusive of D.A. of Rs. 730 after removal of the ceiling at
\nthe C.P.I. 924.\t At the intermediate stage a clerk gets\t Rs.
\n874  in\t the same index (Rs. 300 basic salary plus  Rs.\t 574
\nD.A.). At the minimum he gets Rs. 70 basic pay plus Rs.\t 340
\nD.A.  totaling Rs. 410 in the same index 924.  The  position
\nis worse when the consumer price index touches 1194 as, seen
\nabove.\tThe absence of ceiling on D.A. can result in curious
\nanomalous  situations  where in the pay packet\tof  clerical
\nstaff would exceed the pay packet of junior executive staff.
\nThis  is  hardly  conducive to\tdiscipline,  efficiency\t and
\neffective exercise of control.\n<\/p>\n
464<\/span><\/p>\n
KILLIK NIXON LIMITED BOMBAY.\n<\/p>\n
COMPARISON  OF TOTAL EMOLUMENTS OF CLERICAL SUPERVISORY\t AND
\nJUNIOR EXECUTIVE STAFF.<\/p>\n
\n\t\t\t\t\tCLERICAL\n\t\t\t\t\tBasic\n\t\t\t   Salary     D.A.\t Total\n<\/pre>\n
\t     —————————————–\n<\/p>\n
\t\t\t     Rs\t       .Rs.\t    Rs.\nAPRIL 1973   Minimum\t     70\t\t340\t  410 Min\n(Feb. CPI    Middle\t    300\t\t574\t  874 Mid\n924)\t     Maximum\t    500\t\t730\t 1230 Mid\n\t\t\t\t\t\t      Max.\nJULY 1974    Minimum\t     70\t\t475\t  545 Min\n(May CPI     Middle\t    300\t\t790\t 1090 Mid\n1194).\t     Maximum\t    500\t       1000\t 1500 Mid\n\t\t\t\t\t\t      Max\nSUPERVISORY\t\t\t   JUNIOR EXECUTIVE\nBasic\t\t\t    Basic  House     Travel-\nSalary\t    D.A. Total\t    Salary Rent Al-  ling Al- total\n\t\t\t\t   lowcante  lowance\n<\/pre>\n
===============================================================
\nRs.\t    Rs.\t  Rs.\t    Rs.\t    Rs.\t      Rs.     Rs.\n<\/p>\n
275\t  555\t  830\t    400\t   150\t      150     700\n520\t  730\t 1250\t    530\t   150\t      150     830\n800\t  730\t 1530\t    800\t   200\t      150    1150\n1200\t  730\t 1930\t   1000\t   200\t      150    1350\n275\t  764\t 1039\t    400\t   150\t      150     700\n520\t 1000\t 1520\t    530\t   150\t      150     830\n800\t 1000\t 1800\t    800\t   200\t      1501    150\n1200\t 1200\t 2200\t    1000   200\t       150    1350\n 465<\/span>\n<\/pre>\n
Although the change in the D.A. scheme imposing the  ceiling
\nwas  notified  in  May 1966, it could  not  have  been\tthen
\ncontemplated  that the index would touch such a\t high  mark;
\nyet  within  these  nearly  nine  years\t that  the   dispute
\nunfortunately has dragged on, it has given the court an idea
\nof the effect of removal of the ceiling.\n<\/p>\n
The  management has submitted statements showing the  actual
\nworking of the D.A. formula without the ceiling and tried to
\nshow  that  it\twould not be possible for  it  to  bear\t the
\nfinancial  burden.   The  Tribunal went\t into  this  aspect,
\nalthough  at  that time the figures of\tthe  actual  working
\ncould  not  be\tthere, and refused to  accept  the  plea  of
\nincapacity  to\tbear the burden.  The main argument  of\t the
\nmanagement  was\t about the loss of  Managing  Agency  which,
\naccording  to  it,  resulted in shrinkage  of  income.\t The
\nTribunal  went\tinto the matter and came to  the  conclusion
\nand,  according\t to us, rightly, that the said plea  had  no
\nsubstance.\n<\/p>\n
The  company is one of the twenty big industrial  houses  in
\nthe  country.\tOriginally  there were\ttwo  companies,\t one
\nKillick\t Industries Limited and another Killick Nixon &\t Co.
\nPrivate\t   Limited.    Killick\t Industries   Limited\t was
\nincorporated  as  a Public Limited Company on  November\t 14,
\n1947   and   Killick  Nixon  &\tCo.  Private   Limited\t was
\nincorporated as a Private Company on January 23, 1948.\tSome
\ntime  in 1957 the Killick Industries Limited  purchased\t all
\nthe  shares of Killick Nixon & Co. Private Limited with\t the
\nresult\tthat  Killick Nixon & Co. Private Limited  became  a
\nwholly\towned  subsidiary  of  Killick\tIndustries  Limited.
\nUnder section 43A of the Companies Act, 1956, Killick  Nixon
\n&  Co. Private Limited became a Public Limited Company\twith
\neffect\tfrom  March 28, 1961 and by an order of\t the  Bombay
\nHigh  Court of March 24, 1970, was amalgamated with  Killick
\nIndustries   Limited  with  effect  from  August  1,   1969.
\nFollowing  the\tamalgamation and with the  approval  of\t the
\nCentral\t Government the name of Killick\t Industries  Limited
\nwas  changed to Killick Nixon Limited (the appellant).\t The
\nactivities of the company are : manufacturing of engineering
\nproducts,   namely,   Jhonson\tVibrators,   dall   Pressing
\nequipments   and  E.F.C.C.  Furnaces;  Selling\t agency\t  of
\nengineering products such as Vibrators, drilling  equipment,
\nelectric  meters  and dredgers, general\t selling  agency  in
\nrespect of snowcem cement print and allied products,  carbon
\npapers; slotted angles, Hawkins pressure cookers; export  of
\npiece  goods; and agency of City Line and Hall Line of\tU.K.
\nand clearing and forwarding work.\n<\/p>\n
The  question, however, in this case may not be\t simply\t the
\nfinancial  capacity  of the company alone.   Ordinarily\t the
\ncapacity to bear the additional burden would certainly be  a
\nrelevant  factor.   We\tare, however,  not  considering\t the
\nmatter from that aspect in the present case.  We will assume
\nthat  the  company  will  be able  to  bear  the  additional
\nfinancial burden if the ceiling is removed.  We do not agree
\nwith  the Tribunal that it is only if the company  would  be
\nrequired  to  close  down  that\t such  a  demand  should  be
\nrejected.   That  is an incorrect view to take\tin  dealing,
\nwith the problem with which we are concerned.\n<\/p>\n
466<\/span><\/p>\n
We  have,  therefore, a company which  is  prosperous.\t The
\nconsumer  price\t index has been soaring higher\tand  higher.
\nThe  employees have to get protection of their\treal  wages.
\nIt is well settled that complete neutralisation of the\trise
\nof  cost  of living cannot be allowed except to\t the  lowest
\ncategory  of  employees.   In  the  view  of  the   National
\nCommission on Labour “the only purpose of dearness allowance
\nis  to\tenable a worker in the event of a rise\tin  cost  of
\nliving\tto  purchase  the  same amount\tof  goods  of  basic
\nnecessity  as  before.\tThis purpose would be served  by  an
\nequal\tamount\tof  dearness  allowance\t to  all   employees
\nirrespective of differences in their emoluments” (page 243).
\nIt   was  strenuously  submitted  that\tthis  view  of\t the
\nCommission  should  be accepted by us.\tIn  other  words  we
\nshould\tfirst  ascertain what is the minimum  wage  in\tthis
\ncompany\t  at   which  a\t worker\t  would\t  require   complete
\nneutralisation of the cost of living and whatever amount  is
\nfound  to be necessary for him as a protection\tagainst\t his
\nreal wages should only be available to all other  employees.
\nWe  are\t not required to give our opinion  about  this\tsub-
\nmission\t for the simple reason that the management here\t has
\nalready\t introduced  a scheme in which there  is  percentage
\nsystem on salary    slabs  linked  with the  consumer  price
\nindex and there is no dispute about it.\n<\/p>\n
All that the management wants in this case is that D.A. must
\nnot  go on rising with the scaring price index and  a  limit
\nshould be imposed.  We have already observed that in view of
\nthe status of the company the capacity to pay will not alone
\nbe  of\tmoment\tin favour of removal of\t the  ceiling.\t The
\nproblem will have to be viewed from the following  important
\naspects :-\n<\/p>\n
\t      (1)   Condition of the wage scale prevalent in
\n\t      the comnpany.\n<\/p><\/blockquote>\n
\t      (2)   Condition of the wage level prevalent in
\n\t      the industry and the region.\n<\/p><\/blockquote>\n
\t      (3)   The\t wage  packet  as a  whole  of\teach
\n\t      earner  in the company with all amenities\t and
\n\t      benefits and it-, ability and potency to\tcope
\n\t      with   the  economic  requirements  of   daily
\n\t      existence\t  consistent  with  his\t status\t  in
\n\t      society, responsibilities, efficiency at\twork
\n\t      and industrial peace.\n<\/p><\/blockquote>\n
\t      (4)   The\t position of the company  viewed  in
\n\t      relation\tto other comparable concerns in\t the
\n\t      industry and the region.\n<\/p><\/blockquote>\n
\t      (5)   Peremptive\t   necessity\tfor\tfull
\n\t      neutralisation  of the cost of living  at\t the
\n\t      rock-bottom of wage scale if at or just  above
\n\t      the subsistence level.\n<\/p><\/blockquote>\n
\t      (6)   The\t rate  of  neutralisation  which  is
\n\t      being  given to the employees in\teach  salary
\n\t      slab.\n<\/p><\/blockquote>\n
\t      (7)   Avoidance  of  huge distortion  of\twage
\n\t      differentials   taking  into   reckoning\t all
\n\t      persons employed in the concern.\n<\/p><\/blockquote>\n
\t      467<\/span><\/p>\n
\t      (8)   Degree  of sacrifice necessary  even  on
\n\t      the part of workers in general interest.
\n\t      (9)   The\t compulsive  necessity\tof  securing
\n\t      social   and  distributive  justice   to\t the
\n\t      workmen.\n<\/p><\/blockquote>\n
\t      (10)  Capacity of the company\t    to\tbear\n\t      the additional burden.\n\t      (11)  Interest of national economy.\n<\/pre>\n
\t      (12)  Repercussions  in other  industries\t and
\n\t\t\t    society as a whole.\n<\/p><\/blockquote>\n
\t      (13)  The\t state of the consumer price,  index
\n\t      at the time of decision.\n<\/p><\/blockquote>\n
\t      (14)  Forebodings\t and  possibilities  in\t the
\n\t      foreseeable future as far as can be envisaged.\n<\/p><\/blockquote>\n
We  should  also Add that revision of D.A. is not  the\tsame
\nthing as revision of wages.\n<\/p>\n
Having\tgiven our anxious thought to all the above  aspects,
\nwhich  are  not\t exhaustive, we are unable to  come  to\t the
\nconclusion  that  removal  of the  ceiling  in\tthe  present
\ncontext\t will  be justified.  The company has been  able  to
\nmake  out  a  case for imposition of  a\t ceiling.   At\twhat
\nparticular  amount  there should be a ceiling on D.A.  is  a
\nmatter\twhich  will  have to be gone into  by  the  Tribunal
\nkeeping\t in  view  the\tabove  principles.   The   financial
\ncapacity  will\thave  to  be  judged  with  regard  to\t the
\ncommitment  of\tthe  company  as a  whole  towards  all\t its
\nemployees.\n<\/p>\n
We  are unable to agree with the contention of\tthe  workers
\nthat unless there is a ceiling\ton profits there cannot be a
\nceiling\t on  D.A.  The question\t of  D.A.  being  intimately
\nconnected  with\t the cost of living, the  matter  cannot  be
\njudged\tby  the\t test of the  aforesaid\t submission  of\t the
\nworkmen.\n<\/p>\n
There  is, however, one thing which we must point out,\tlest
\nthere should be some misconception about it and that is that
\nso  far\t as the lowest paid employees at or just  above\t the
\nsubsistence  level are concerned, they are entitled  to\t 100
\nper  cent  or  at  any\trate  not  less\t than  95  per\tcent
\nneutralisation\tof the rise in the cost of living and  hence
\nthere should be no ceiling on dearness allowance payable  to
\nemployees within the slab of first Rs. 100, unless it can be
\nshown  by the management that the rate of neutralisation  in
\ntheir  case  is\t more  than 100 per cent.   So\tfar  as\t the
\nemployees in the higher slabs are concerned, it would be for
\nthe  Tribunal  to consider, having regard to  the  aforesaid
\nprinciples,  whether  a ceiling should, be  imposed  at\t the
\nsecond\tslab of Rs. 100 or only at the last slab of Rs.\t 201
\nto Rs. 500.  The manner in which the ceiling may be  imposed
\nwould  also  have  to  be decided by  the  Tribunal  in\t the
\nexercise  of  its judicial discretion keeping  in  view\t the
\naforesaid  principles.\tThe ceiling any be fixed  either  by
\nprescribing a certain amount as the outside
\n468<\/span>
\nlimit  of  the\tdearness allowance or by  reference  to\t the
\nquantum\t of  dearness allowance payable at  a  certain\twage
\nlevel.\t We  do no’ wish to lay down as an  invariable\trule
\nthat in all cases there should be ceiling on D.A. Whenever a
\ncase  of  this nature comes for industrial  adjudication  it
\nwill always be a delicate task for the Tribunal to strike  a
\nbalance\t keeping in view the above principles, weightage  of
\neach  one  of which being variable according  to  conditions
\nobtaining.   Whether  or not there should be  a\t ceiling  on
\ndearness allowance in a given case must depend on the  facts
\nand circumstances of that case.\t There can be no  inexorable
\nrule  in  that\trespect.  We  have  formulated\tthe  various
\nprinciples which must be taken into account by the  Tribunal
\nin determining this question but the most dominant of  these
\nmust always be that of social justice, for that is the ideal
\nwhich  we  have\t resolved  to achieve  when  we\t framed\t our
\nConstitution.\n<\/p>\n
In  the result the award is set aside with regard to  demand
\nNo. 2(a) relating to ceiling.  The reference stands restored
\nwith regard to that specific matter and will be disposed  of
\nby   the  Tribunal  as\tearly  as  possible   after   giving
\nopportunity to the parties.  The appeals are partly  allowed
\nwithout costs.\n<\/p>\n
Appeals partly allowed.\t V.P.S.\n<\/p>\n
469<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Killick Nixon Limited vs Killick & Allied Companies … on 2 May, 1975 Equivalent citations: 1975 AIR 1778, 1975 SCR 453 Author: P Goswami Bench: Goswami, P.K. PETITIONER: KILLICK NIXON LIMITED Vs. RESPONDENT: KILLICK & ALLIED COMPANIES EMPLOYEES UNION DATE OF JUDGMENT02\/05\/1975 BENCH: GOSWAMI, P.K. BENCH: GOSWAMI, P.K. BEG, M. HAMEEDULLAH […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-210894","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nKillick Nixon Limited vs Killick & Allied Companies ... on 2 May, 1975 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/killick-nixon-limited-vs-killick-allied-companies-on-2-may-1975\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Killick Nixon Limited vs Killick & Allied Companies ... on 2 May, 1975 - 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