{"id":220247,"date":"1975-07-24T00:00:00","date_gmt":"1975-07-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/management-of-lndian-oil-vs-its-workmen-on-24-july-1975"},"modified":"2016-05-24T08:40:02","modified_gmt":"2016-05-24T03:10:02","slug":"management-of-lndian-oil-vs-its-workmen-on-24-july-1975","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/management-of-lndian-oil-vs-its-workmen-on-24-july-1975","title":{"rendered":"Management Of Lndian Oil … vs Its Workmen on 24 July, 1975"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Management Of Lndian Oil … vs Its Workmen on 24 July, 1975<\/div>\n
Equivalent citations: 1975 AIR 1856, \t\t 1976 SCR (1) 110<\/div>\n
Author: S M Fazalali<\/div>\n
Bench: Fazalali, Syed Murtaza<\/div>\n
           PETITIONER:\nMANAGEMENT OF lNDIAN OIL CORPORATION LTD.\n\n\tVs.\n\nRESPONDENT:\nITS WORKMEN\n\nDATE OF JUDGMENT24\/07\/1975\n\nBENCH:\nFAZALALI, SYED MURTAZA\nBENCH:\nFAZALALI, SYED MURTAZA\nRAY, A.N. (CJ)\nMATHEW, KUTTYIL KURIEN\nKRISHNAIYER, V.R.\n\nCITATION:\n 1975 AIR 1856\t\t  1976 SCR  (1) 110\n 1976 SCC  (1)\t63\n CITATOR INFO :\n R\t    1980 SC2181\t (38,41)\n\n\nACT:\n     Industrial Disputes  Act,\t1947  Section  9-A-Appellant\npaying compensatory,  allowance to  workmen voluntarily\t but\nwithdrawing it later unilaterally without notice to workmen-\nAppellant, if entitled to withdraw the concession.\n\n\n\nHEADNOTE:\n     By virtue\tof a  notification dated  September 3, 1957,\nthe  Central   Government  granted   compensatory  allowance\naccording  to\tcertain\t rates\tto  all\t Central  Government\nemployees posted  throughout Assam. The appellant thought it\nfit in\tthe circumstances to grant compensatory allowance to\nall its employees in September 1959. It was not made through\nany standing order or circular. Thereafter there was another\nnotification by\t the Central  Government dated\tDecember  8,\n1960 by\t which it was provided that the employees in receipt\nof the\tcompensatory allowance\twould be given the option to\nchoose the  house rent\tallowance or  compensatory allowance\nbut will not be entitled lo draw both. this was to remain in\nforce for  five years. In view, however, of the notification\ndated December\t8, 1960,  the management  thought  that\t the\ncontents of  the circular  were binding\t on the\t company and\ntherefore they\tunilaterally. without  giving any  notice to\nthe workers,  withdrew the  concession of  the\tcompensatory\nallowance which had been granted to the workers in September\n1959. This  concession was  withdrawn with  effect from July\n1960.  The   workers  moved  the  Government  for  making  a\nreference to  the Tribunal  because a  dispute arose between\nthe parties  regarding the  competency of  the appellant  to\nwithdraw he  concession\t granted  by  it  unilaterally.\t The\nGovernment made a reference to the Industrial Tribunal which\nhas held that there was a dispute between the parties and as\ns.9A of\t the Industrial\t Disputes Act,\t1947, has  not\tbeen\ncomplied with  by the Company the management was not legally\nentitled  to   with-  draw   the  concession  of  the  Assam\nCompensatory  Allowance\t granted  to.  the  employees.\tThis\nappeal has  been preferred by the management on the basis of\nthe specials leave granted by this Court.\n     It\t was  contended\t for  the  appellant  (i)  that\t the\ncompensatory allowance was given purely on the basis of' the\nCentral Government  circular dated September 3, 1957, on the\ndistinct understanding that it was a temporary measure which\ncould be  withdrawn at\tthe will of the employer and did not\namount to  a condition\tof service at all; (ii) that even if\nthe provisions,\t of s.9A  of  the  Act\tapplied,  since\t the\nmanagement had\tsubstituted the\t house\trent  allowance\t for\ncompensatory  allowance\t  the  workers\twere  not  adversely\naffected and,  therefore, it  was not  necessary to give any\nnotice to  them before\twithdrawing the\t concession of\tthe,\ncompensatory allowance.\n     Rejecting the contentions and dismissing the appeal,\n^\n     HELD: (i)\t'There is  no  evidence\t to  show  that\t the\nmanagement   before   granting\t the   concession   of\t the\ncompensatory allowance\thad in\tany  way  indicated  to\t the\nworkers that  this was\tonly a\tstop-gap  arrangement  which\ncould be  withdrawn after  the housing\tsubsidy was granted.\nEven before  the unilateral  withdrawal\t of  the  concession\ngranted by  the appellant no notice was given to the workers\nnor. were  they taken  into confidence,\t nor any attempt was\nmade to\t open a\t dialogue with them on this question. So far\nas the\tcompensatory allowance\tis concerned it was given in\norder to  enable the workers to meet the high cost of living\nin a far-off and backward area like Assam. It had absolutely\nno casual  connection with the housing subsidy or house rent\nallowance  which   was\ta   different  type  of\t concession.\nFurthermore, the  grant of  compensatory  allowance  by\t the\nappellant was indeed a very charitable act which showed that\nthe employers were extremely sympathetic towards the need of\ntheir\n111\nworkers.  In   these  circumstances,   the   conclusion\t  is\nirresistible that the grant of compensatory allowance was an\nimplied condition  of service so as to attract the mandatory\nprovisions of  s. 9A  of the Act. Twenty-one days notice has\nto be  given to the workmen. This was not done in this case.\n[113C-114B]\n     Workman  of   Hindustan  Shipyard\t (Private)  Ltd.  v.\nIndustrial Tribunal  Hyderabad and  others<\/a>, [1961]  2 L.L.J.\n526, Bhiwani  Textile Mills  v. Their The Workman and others\n[1969] 2  L.L.J. 739,  Oil and Natural Gas Commission v. The\nWorkman [1973]\t2 S.C.R.  482, Hindustan  Lever Ltd.  v. Ram\nMohan Ray  and Other<\/a> [1973] 4 S.C.C. 141, and M\/s. Tata Iron\nand Steel  Co. Ltd. v. The  Workman and others[1972] 2 S.C.C\n383, referred to.\n     (ii) The compensatory allowance and housing subsidy are\ntwo different  and  separate  categories  of  the  terms  of\nservice conditions  and they cannot be clubbed together, nor\ncan one\t be made dependent on the other. the object of these\ntwo concessions\t is quite  different and  both of them serve\nquite different purposes.\n\t\t\t\t\t\t  [118A-B] .\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 377 of
\n1970.\n<\/p>\n
     From the  Award dated  the 22nd  October, 1969  of\t the
\nIndustrial Tribunal, Gauhati in Reference No. 16 of ]965.\n<\/p>\n
     Anand Prakash and D. N. Mishra, for the appellant.
\n     D.L. Sen Gupta and S. K. Nandy, for respondents.
\n     The Judgment of the Court was delivered by
\n     FAZAL AL1,\t J.-This  is  an  appeal  by  special  leave
\nagainst the  award dated  October 22,  1969 by Mr. R. Medhi,
\nPresiding  officer,   Industrial  Tribunal.   Gauhati  on  a
\nreference made to the Tribunal by the Government of Assam by
\nvirtue of  its notification  No. FLR. 46\/611  194 dated July
\n14,1965 in  view of  an industrial  dispute  having  existed
\nbetween the  parties. The appellant is the management of the
\nIndian oil  Corporations Ltd.  which has  undertaken what is
\nknown as  the Assam  oil Refineries situated at Gauhati. The
\nreference to  the Tribunal was made by the Government in the
\nfollowing circumstances:\n<\/p>\n
     By virtue\tof a  notification dated  September 3, 1957,
\nthe  Central   Government  granted   compensatory  allowance
\naccording  to\tcertain\t rates\tto  all\t Central  Government
\nemployees posted  throughout Assam. The appellant set up the
\nrefinery some  time in\tthe year  1959 and  in view  of\t the
\ncircular of  the Central  Government referred  to above\t the
\nmanagement thought  it fit  in the  circumstances  to  grant
\ncompensatory allowance\tto all\tits employees  some time  in
\nSeptember 1959.\t The grant of compensatory allowance was not
\nmade through  any standing  order  or  circular\t but  it  is
\nalleged to  have been  given  as  an  implied  condition  of
\nservice. Thereafter  there was\tanother notification  by the
\nCentral Government  dated December  8, 1 960 by which it was
\nprovided that  the employees  in receipt of the compensatory
\nallowance would be given the option to choose the house rent
\nallowance or compensatory allowance but will not be entitled
\nto draw\t both. This  order was\tto remain  in force for five
\nyears. By  virtue of  another notification  dated August  9,
\n1965 the  Central Government  made it further clear that the
\nemployees of  the Central  Government  would  have  to\tdraw
\neither compensatory  allowance at  the existing rates or the
\nhouse
\n112<\/span>
\nrent allowance\tbut not\t both.\tIn  view,  however,  of\t the
\nnotification   dated December 8, 1960, alluded to above, the
\nmanagement thought  that the  contents of  the circular were
\nbinding on  the Company\t and, therefore,  they unilaterally,
\nwithout giving\tany notice  to\tthe  workers,  withdrew\t the
\nconcession of  the compensatory\t allowance   which had\tbeen
\ngranted to  the workers\t in September  1959. This concession
\nwas withdrawn  with effect from July 1960. The workers moved
\nthe Government\tfor  making  a\treference  to  the  Tribunal
\nbecause a  dispute arose  between the  parties regarding the
\ncompetency of  the  appellant  to  withdraw  the  concession
\ngranted by  it unilaterally. The Government made a reference
\nto the\tIndustrial Tribunal  which has held that there was a
\ndispute between\t the parties  and as s. 9A of the Industrial
\nDisputes Act,  1947-hereinafter referred to as ‘the Act’-has
\nnot been complied with by the Company the management was not
\nlegally entitled  to withdraw  the concession  of the  Assam
\nCompensatory Allowance\tgranted to  the employees. The award
\nof the\tIndustrial Tribunal  was published by the Government
\nof Assam in  the Gazette dated July 14, 1965.\n<\/p>\n
     Dr. Anand\tPrakash, counsel for the appellant, made the
\nfollowing three contentions before us:\n<\/p>\n
\t  (1)  that the\t compensatory  allowance  was  given
\n\t       purely on the basis of the Central Government
\n\t       circular dated  September  3,  1957,  on\t the
\n\t       distinct\t understanding\t that\tit   was   a
\n\t       temporary measure which could be withdrawn at
\n\t       the will\t of the\t employer and did not amount
\n\t       to a condition of service at all;\n<\/p><\/blockquote>\n
\t  (2)  that even  if the  provisions of s. 9A of the
\n\t       Act  applied,   since  the   management\t had
\n\t       substituted  the\t house\trent  allowance\t for
\n\t       compensatory allowance  the  workers were not
\n\t       adversely affected  and therefore, it was not
\n\t       necessary to  give and  notice to them before
\n\t       withdrawing    the    concession\t   of\t the
\n\t       compensatory allowance: and
\n\t  (3)  that even  if the  provisions of s. 9A of the
\n\t       Act were\t not  complied\twith,  the  Tribunal
\n\t       should have  at least  gone into the question
\n\t       on merits instead of  basing its award on the
\n\t       question of  applicability of  s. 9A  of\t the
\n\t       Act.<\/p><\/blockquote>\n
     Before, however,  dealing with  the contentions  raised
\nbefore us,  it may  be necessary  to mention  a few admitted
\nfacts. In  the first  place it 1 is the admitted case of the
\nparties that  the circulars  of the  Central Government were
\nnot  binding”\ton  the\t  appellant  Corporation,   but\t the
\nCorporation chose  to follow them in its own wisdom Secondly
\nit is  also  `’\t ‘  admitted  that  at\tthe  time  well\t the
\nconcession of  compensatory allowance  was  granted  to\t the
\nemployees of the Corporation. there was nothing to show that
\nit was given only by way of an interim measure which
\n113<\/span>
\ncould be  withdrawn at\tthe will of the employer. Thirdly it
\nis also\t not disputed that before withdrawing the concession
\nof compensatory\t allowance in August 1960 the appellant gave
\nno notice to the workers, not did it consult them in any way
\nbefore depriving  them of  the concession originally granted
\nby the employer. In fact the Tribunal has found very clearly
\nthat the  act of  the  Corporation  in\tgranting  the  Assam
\nCompensatory Allowance\twas an\tindependent one and made out
\nof their  own volition,\t though the circulars of the Central
\nGovernment may\thave been one of the factors that swayed the
\ndecision of  the management. It is against the background of
\nthese admitted\tfacts and  circumstances  that\twe  have  to
\nexamine the  contentions raised by counsel for the appeal in
\nthis appeal.\n<\/p>\n
     As regards\t the first contention that the concession of
\nthe compensatory allowance was granted to the workers by way
\nof a temporary 4 measure and would not amount to a condition
\nof service,  we find absolutely no material on the record to
\nsupport the  same. There  is no\t evidence to  show that\t the
\nmanagement   before   granting\t the   concession   of\t the
\ncompensatory allowance\thad in\tany  way  indicated  to\t the
\nworkers that  this was\tonly a\tstop-gap  arrangement  which
\ncould be  withdrawn after  the housing\tsubsidy was granted.
\nEven before  the unilateral  withdrawal\t of  the  concession
\ngranted by  the appellant no notice was given to the workers
\nnor were  they taken  into confidence,\tnor any\t attempt was
\nmade to\t open a\t dialogue with them on this question. Indeed
\nif the\tcirculars of  the Central  Government are admittedly
\nnot binding  on the  Corporation,  then\t we  are  unable  to
\nappreciate  the\t stand\ttaken  by  the\tappellant  that\t the
\nmanagement  unilaterally   withdrew  the  concession  merely
\nbecause of  the Central\t Government circulars. So far as the
\ncompensatory allowance is concerned it was given in order to
\nenable P  the workers  to meet\tthe high cost of living in a
\nfar-off and  back ward area like Assam. It had absolutely no
\ncausal connection  with the  housing subsidy  or house\trent
\nallowance  which   was\ta   different  type  of\t concession.
\nFurthermore, the  grant of  compensatory  allowance  by\t the
\nappellant was indeed a very charitable act which showed that
\nthe employers  were extremely  sympathetic towards the needs
\nof their  r workers.  In  there\t circumstances\twe  have  no
\nhesitation  in\t holding  that\tthe  grant  of\tcompensatory
\nallowance was undoubtedly an implied condition of service so
\nas to  attract the  mandatory provisions  of s.9A of the Act
\nwhich runs thus:\n<\/p>\n
\t  “No employer, who proposes to effect any change in
\n     the conditions  of service applicable to any workman in
\n     respect of any matter specified in the Fourth Schedule,
\n     shall effect such change,-\n<\/p><\/blockquote>\n
\t  (a) without  giving to  the workmen  likely to  be
\n     affected by  such change  a notice\t in  the  prescribed
\n     manner of\tthe nature  of the  change  proposed  to  be
\n     effected; or\n<\/p><\/blockquote>\n
\t  (b) within twenty-one days of giving such notice:
\n\t  Provided …………………… ”\n<\/p><\/blockquote>\n
An analysis  of s.  9A of  the Act  clearly shows  that this
\nprovision comes\t into operation,  the  moment  the  employer
\nproposes to change any condi
\n114<\/span>
\ntion of\t service applicable to any workman, and once this is
\ndone twenty-   one  days notice\t has  to  be  given  to\t the
\nworkmen. This  admittedly was  not done\t in  this  case.  By
\nwithdrawing the\t Assam Compensatory  Allowance the employers
\nundoubtedly effected substantial change in the conditions of
\nservice,  because   the\t workmen   were\t deprived   of\t the
\ncompensatory allowance for all, time to come.\n<\/p>\n
     Dr. Anand\tPrakash however relied on a few decisions in
\nsupport\t of the fact that such a change in the conditions of
\nservice does  not amount to any change as contemplated by s.
\n9A of  the Act.\t Reliance was  placed on  a decision  of the
\nAndhra Pradesh\tHigh Court  in Workmen of Hindustan Shipyard
\n(Private)  Ltd.\t  v.  Industrial   Tribunal,  Hyderabad\t and
\nothers<\/a>(J). In our opinion the facts of that case are clearly
\ndistinguishable from  the facts in the present case. In that
\ncase a concession was granted to the employees to attend the
\noffice half an hour late due to war time emergency, but this
\nconcession was\tconditional on\tthe reservation of the right
\nto change  the office  hours and it was open to the employer
\nto take\t a different  decision. Secondly  the working  hours
\nbeing fixed at 6 1\/2 hours were below the maximum prescribed
\nby the\tFactories Act  which were  8 hours  and,  therefore,
\nthere t\t was no adverse change in the conditions of service.
\nFinally in  this case there was a clear finding given by the
\nlearned Judge  that the\t concession would  not amount  to  a
\ncondition of service. In this connection,: Jaganmohan Reddy,
\nJ., observed as follows:\n<\/p>\n
\t  “In this  case as  it\t cannot\t be  said  that\t the
\n     concession which they were enjoying in the winter month
\n     was a  privilege to which they were entitled before the
\n     Act came  into force  in February\t1948. I have already
\n     stated that the concession was subject to the condition
\n     of its  withdrawal unilaterally  and cannot, therefore,
\n     be said to have conferred any right on the employees to
\n     enjoy it as such.\n<\/p><\/blockquote>\n
\t  …….. further  that s.  9A came  into play only
\n     when the  conditions of  service were  altered, but the
\n     workmen  having   agreed  to  the\treservation  of\t the
\n     employer lo alter it, they have made the right to alter
\n     it also a condition of service and therefore the action
\n     in accordance  with the  said right  can  give no cause
\n     for complaint.”\n<\/p><\/blockquote>\n
In the\tinstant case  we have already held that the grant of
\ncompensatory allowance\tcannot be  construed to be merely an
\ninterim measure.  hut having  regard to the circumstances in
\nwhich this  concession was  given will\tamount to an implied
\ncondition of service.\n<\/p>\n
     Reliance was also placed on a decision by this Court in
\nBhiwani Textile\t Mills v. Their Workmen and others<\/a>(2), where
\nthis Court observed as follows:\n<\/p>\n
\t  “Sri G. B. Pai, on behalf of the mills, and Sri M.
\n     S.\t K.   Sastri  and   Y.\tKumar  for  the\t two  unions
\n     representing the  workmen, stated\tbefore us  that\t the
\n     parties are agreed that this
\n115<\/span>
\n     direction given in the award may be deleted as no party
\n     objects to\t its deletion.\tConsequently, we need not go
\n     into the  question whether\t the  tribunal\twas  in\t law
\n     competent to make such a direction in the award or not
\n\t  In view of this agreement between the parties, the
\n     only question  that  remains  for\tdecision  by  us  is
\n     whether  the  tribunal  was  right\t in  directing\tthat
\n     workmen, who do duty on any Sunday, will be entitled to
\n     an extra  payment of  20 per cent of their consolidated
\n     wages for that Sunday.”\n<\/p><\/blockquote>\n
A perusal  of the  observations made  by  this\tCourt  would
\nclearly show  that the\tcase before  this Court proceeded on
\nthe basis of a consent order as agreed to by counsel for the
\nparties. Secondly  the question for decision was whether the
\nworkmen were  entitled to  additional payment for working on
\nSundays even  if they  were  given  another  off  day  as  a
\nsubstitute for Sunday. The Court pointed out that this could
\nnot be\ttreated as  a condition\t of service because all that
\nthe workman  were entitled  to was  that they should take at
\nleast one  day off  in a  week and  this  facility  was\t not
\ndisturbed but  instead of  giving Sunday off they were given
\nsome other  day as  weekly off.\t In these circumstances this
\ncase also does not assist the appellant.\n<\/p>\n
     Dr. Anand\tPrakash also  cited  a\tdecision  in  oil  &
\nNatural was  Commission v. The Workmen<\/a>(1). In this case also
\nthere was  a finding  of fact  by this\tCourt that there was
\nnothing to  show that 6 1\/2 hours per day was a condition of
\nservice. In this connection, the Court observed as follows:\n<\/p>\n
     “In our opinion, on the facts and circumstances of this
\n     it can not be said that 6 1\/2 working hours a day was a
\n     term of service, for the simple reason that it was only
\n     during a  period of  the first  six  months,  when\t the
\n     factory was  being constructed  . at  the site  of\t the
\n     workshop that,  due to  shortage of  accommodation, the
\n     administrative office  was, as  an interim arrangement,
\n     temporarily located  in tents  at a  place about 2 k.m.
\n     away, that the state in this office was not required to
\n     work for  more than  62- hours  per day.  There  is  no
\n     evidence that  6 1\/2  hours per  day was a condition of
\n     service; neither  is there\t any such term of service in
\n     their letters  of appointment,  nor is  such a  term of
\n     service otherwise\tdiscernible from  other material  on
\n     the record.”\n<\/p><\/blockquote>\n
In view of our finding, however, that the grant of the Assam
\nCompensatory  Allowance\t  was  undoubtedly  a  condition  of
\nservice this case has absolutely no application.\n<\/p>\n
     Reliance was  placed on  a decision  of this  Court  in
\nHindustan Lever\t Ltd. v. Ram Mohan Ray and others<\/a>(2) for the
\nproposition  that   withdrawal\tof  the\t concession  of\t the
\ncompensatory allowance\tdid not adversely affect the service
\nconditions of  the workmen. In this case this Court observed
\nas follows:\n<\/p>\n
116<\/span><\/p>\n
\t  “As regards  item 11\tit was\turged  that  as\t one
\n     department\t  out of three has been abolished, this item
\n     applies. Though to bring the matter under this item the
\n     workmen are not required to show that there is increase
\n     in the  work-load, it  must be  remembered that the 4th
\n     Schedule relates to conditions of service for change of
\n     which notice  is to  be given  and section 9-A requires
\n     the employer  to give  notice under that section to the
\n     workmen likely  to be affected by such change. The word
\n     affected’ in  the circumstances could only refer to the
\n     workers being adversely affected and unless it could be
\n     shown  that   the\tabolition   of\tone  department\t has
\n     adversely affected\t the workers  It cannot\t be  brought
\n     under item\t 11. The  same consideration  applies to the
\n     question of change in usage under item 8.”\n<\/p><\/blockquote>\n
It is  true that  this Court  held on the facts of that case
\nthat the  Company had  abolished one  department, but as the
\nwork-load was  not increased  the workers were not adversely
\naffected and  the abolition  of one  department could not be
\nbrought under  item 11.\t The contingency contemplated in the
\naforesaid case,\t however, cannot be equated with the present
\ncase  by   virtue  of  the  unilateral\tdeprivation  of\t the
\ncompensatory allowance\twhich was  received by the employees
\nby the withdrawal of which they were undoubtedly prejudiced.
\nIt cannot  be contended\t that the  sudden  withdrawal  of  a
\nsubstantial concession\tin the\tconditions of  service would
\nnot materially\tor adversely  affect the  workmen.  We\tare,
\ntherefore, of  opinion that the aforesaid case also does not
\nsupport the  contention\t of  the  learned  counsel  for\t the
\nappellant.\n<\/p>\n
     On the  other hand\t Mr. Sen  Gupta\t appearing  for\t the
\nrespondents drew our attention to the decision of this Court
\nin M\/s.\t Tata Iron  and Steel  Co. Ltd.\t v. The\t Workmen and
\nothers<\/a>(1) where this Court, while pointing out the object of
\ns. 9A, observed as follows: –\n<\/p>\n
     “The real\tobject and  purpose of\tenacting Section 9-A
\n     seems to  be to afford an opportunity to the workmen to
\n     consider the  effect of  the proposed  change  and,  if
\n     necessary, to  represent their  point of  view  on\t the
\n     proposal. Such consultation further serves to stimulate
\n     a feeling\tof common  joint interest  of the management
\n     and workmen  in the  industrial progress  and increased
\n     productivity.  This   approach  on\t  the  part  of\t the
\n     industrial employer  would reflect\t his harmonious\t and
\n     sympathetic co-operation  in improving  the status\t and
\n     dignity of\t the industrial\t employee in accordance with
\n     the egalitarian and progressive trend of our industrial
\n     jurisprudence, which  strives to  treat the capital and
\n     labour  as\t co-sharers  and  to  break  away  from\t the
\n     tradition of labour’s subservience to capital.”\n<\/p><\/blockquote>\n
The observations  made by  this Court lay down the real test
\nas to  the circumstances  in which s. 9A would apply. In the
\ninstant case,  however, we  are satisfied-(1) that the grant
\nof the compensatory allow-\n<\/p>\n
117<\/span><\/p>\n
ance was  an implied  condition of  service; and (2) that by
\nwithdrawing this  allowance the\t employer sought to effect a
\nchange which  adversely and  materially affected the service
\nconditions  of\t the  workmen.\t In   these   circumstances,
\ntherefore, s.  9A of  the Act was clearly applicable and the
\nnon-compliance with  the provisions  of this  section  would
\nundoubtedly raise  a serious  dispute between the parties so
\nas to  give jurisdiction  to the Tribunal to give the award.
\nIf the\tappellant wanted  to withdraw the Assam Compensatory
\nAllowance it  should  have  given  notice  to  the  workmen,
\nnegotiated  the\t  matter  with\tthem  and  arrived  at\tsome
\nsettlement instead of withdrawing the compensatory allowance
\novernight.\n<\/p>\n
     It was  also contended  that the compensatory allowance
\nwas only  an allowance\tgiven in  substitution\tfor  housing
\nsubsidy.  We   are,  however,  unable  to  agree  with\tthis
\ncontention. Mr.\t Sen Gupta  appearing  for  the\t respondents
\nrightly pointed\t out that  there is  a well-knit and a clear
\ndistinction between the compensatory allowance and a housing
\nsubsidy or house-rent allowance. This distinction is clearly
\nbrought out  by the Second Pay Commission’s Report (1957-59)
\nin which the Commission observed as follows:\n<\/p>\n
\t  “The compensatory  allowances considered here fall
\n     into there\t broad groups:\t(i) allowances\tto meet\t the
\n     high cost\tof living in certain specially costly cities
\n     and other\tlocal areas,  including hill  stations where
\n     special requirements  such as  additional warm clothing
\n     and fuel etc., add to the cost of living; (ii) those to
\n     compensate for  the  hardship  of\tservice\t in  certain
\n     areas, e.g.  areas which  have a  bad climate,  or\t are
\n     remote and\t difficult of  access; and  (iii) allowances
\n     granted in\t areas,\t e.g.  field  service  areas,  where
\n     because of\t special conditions of living or service, an
\n     employee cannot,  besides other disadvantages, have his
\n     family with him. There are cases in which more than one
\n     of\t these\t conditions  for  grant\t of  a\tcompensatory
\n     allowance are fulfilled.”\n<\/p><\/blockquote>\n
     The Second Pay Commission also observed:
\n\t  “The rent  concessions dealt\twith here are of two
\n     kinds: (i) provision of rent free quarters, or grant of
\n     a house  rent allowance in lieu thereof; and (ii) grant
\n     of a house rent allow ance in certain classes of cities
\n     to compensate the employees concerned for the specially
\n     high rents\t that have  to be  paid in those cities. The
\n     former is allowed only to such staff as are required to
\n     reside on\tthe premises where they have to work. and is
\n     thus intended  to be  a facility necessary to enable an
\n     employee to  discharge his duties. In some cases, it is
\n     a supplement to pay or substitute for special pay etc.,
\n     which would  have been  granted but for the existing of
\n     that concession.  In either  case, it is not related to
\n     the expensiveness\tof a  locality. The  latter, on\t the
\n     other hand,  is a\tcompensatory or a sort of a dearness
\n     allowance, intended  to cover  not\t the  high  cost  of
\n     living as\ta whole\t but the  prevailing  high  cost  of
\n     residential accommodation;\t and it\t has no relationship
\n     to the nature of an employee’s duties.”\n<\/p><\/blockquote>\n
118<\/span><\/p>\n
The observations  made by  the Second  Pay Commission  throw
\nlight on   this question. In fact the compensatory allowance
\nand  housing   subsidy\tare   two  different   and  separate
\ncategories of  the terms  of  service  conditions  and\tthey
\ncannot\tbe  clubbed  together,\tnor  can  the  one  be\tmade
\ndependent on  the other. The object of these two concessions
\nis quite  different and\t both of  them serve quite different
\npurposes.\n<\/p>\n
     It was  next contended  that even\tif s.  9A of the Act
\napplied, the  Tribunal should have gone into the question on
\nmerits instead\tof giving  the award  on the  basis of\tnon-
\ncompliance with\t the provisions of s. 9A. This argument also
\nappears to  us to  be equally  untenable. On  the facts\t and
\ncircumstances of  the present  case the only point that fell
\nfor determination  was whether\tthere was  any change in the
\nconditions of service of the workmen and, if so, whether the
\nprovisions of  s. 9A  of the Act were duly complied with. We
\ncannot conceive\t of any\t other point  that could have fallen
\nfor determination on merits, after the Tribunal held that s.
\n9A of  the Act applied and had not been complied with by the
\nappellant.\n<\/p>\n
     It\t was  also  faintly  suggested\tthat  there  was  no
\nquestion of  a customary  claim or  usage because the period
\nduring which  the compensatory\tallowance  was\tgranted\t and
\nwithdrawn was  too short. It is, how- ever, not necessary to
\ntake any  notice of  this argument,  because counsel for the
\nrespondents Mr.\t Sen Gupta  fairly conceded that he had not-
\nbased his claim on any customary claim at all. It was argued
\nby  Mr.\t  Sen  Gupta   that  after  the\t Central  Government
\nnotification of\t September 3,  1957, the  appellant took  an
\nindependent and\t voluntary decision on their own to give the
\nfacility of  the Assam\tCompensatory Allowance as an implied
\nterm of\t the contract  and having  done so  they  could\t not
\nwriggle out from the provisions of s. 9A of the Act.\n<\/p>\n
     Thus all  the contentions\traised by the appellant fail
\nand the\t appeal is  dismissed, but  in the  circumstances of
\nthis case we leave the parties to bear their own costs.\n<\/p>\n
V.M.K.\t\t\t\t\t   Appeal dismissed.\n119<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Management Of Lndian Oil … vs Its Workmen on 24 July, 1975 Equivalent citations: 1975 AIR 1856, 1976 SCR (1) 110 Author: S M Fazalali Bench: Fazalali, Syed Murtaza PETITIONER: MANAGEMENT OF lNDIAN OIL CORPORATION LTD. Vs. RESPONDENT: ITS WORKMEN DATE OF JUDGMENT24\/07\/1975 BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA […]<\/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-220247","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nManagement Of Lndian Oil ... vs Its Workmen on 24 July, 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\/management-of-lndian-oil-vs-its-workmen-on-24-july-1975\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Management Of Lndian Oil ... vs Its Workmen on 24 July, 1975 - 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