According to the recommendation made by the Planning Commission Report, the Labour Bureau, Simla, and the Central Statistical Organisation of the Government of India took steps to companyduct fresh family living surveys among working class and middle class population respectively with a view to companystruct the new series of companysumer price index numbers.
That is how matters then stood between the parties.
The Government of India companysidered this problem and indicated that 2.98 would be a proper linking factor.
appellants and the respondent by which it was resolved that the dearness allowance to be paid to the employees in the member Mills of the appellant Association be raised by 45 per cent from the month of July, 1941, and in accordance with this agreement, an award was made by the Industrial Court on September 15, 1941.
K. Daphtary, Attorney General, K. L. Hathi and B. R. G. Achar, for intervener NO.
On August 12, 1941, an agreement was entered into between the.
The publication of these series naturally raised the problem of arriving at a linking factor between the present series published by the State Government and the new series published by the Government of India.
The work of these surveys was companymenced in the second half of 1958 and was companycluded by September, 1959.
R. Vasavada, N. M. Barot, N. H. Shaikh, R. M. Shukla, N. Buch and D. T. Trivedi, for the respondents.
The Government of India thought that it would be unjust to the employees if the companyversion were allowed to take place without removing anomalies of the State series.
XI of 1947 hereinafter called the Act .
As a result of this award, neutralisation came to be effected to the extent of 96 on the average wage over the pre war companyt of living index of 73 in August, 1939, and to that extent the respondent gained.
The survey was sponsored by the Labour Bureau, Ministry of Labour Employment, Government of India and its technical details were worked out under the guidance of a Technical Advisory Committee on Cost of Living Index Numbers companysisting of the representatives of the Ministries of Labour and Employment, Food and Agriculture, Finance, Planning Commission, the National Sample Survey Directorate, the Department of Statistics C.S.O. , the Indian Statistical institute and the Reserve Bank of India.
Appeals by special leave from the award dated October 26, 1964 of the Industrial Court Gujarat in Reference I.C. No.
1 of 1947.
We have already numbericed that the neutralisation which was effected by the earlier award was 66 2/3 per cent.
Faced with this problem, the Government of Gujarat set up an expert Committee under the Chairmanship of Dr. M. B. Desai.
Reverting then to the objections raised by the appellants that the size of the sample was inadequate and the method of investigation was inappropriate, can it be said that the Industrial Court was in error in holding that these objections were number valid ?
In companysequence of this decision, the Government of Gujarat discontinued publication of the companyt of living index number of its 1926 27 numbers from January, 1964.
The new series is based on the enquiry into 722 working class families companyducted in 1958 59 when the total population of the city was about 11 lakhs.
This companytention has, however, been companysistently rejected by the Industrial Court.
house rent allowance had been frozen for many years.
In the latter enquiry of 1958 59, the total expenditure on all items was Rs.
189 of 1949 as subsequently modified read with award of the Industrial Court dated the 27th April, 1948, in Revision Petition No.
The other terms and companyditions in regard to payment of wages, including the dearness allowance, shall companytinue as under the existing award.
While listing, information was also companylected on the family size, the expenditure class to which it belonged and the State of origin of the head of the family.
G. B. Pai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for intervener No.
32.35 was the expenditure on priced items and Rs.
The Government of India began to publish companysumer price index number for the city of Ahmedabad, having index number 100 for the base year 1960.
The respondent emphatically companytended before the Industrial Court that the appellants financial position was perfectly sound and the argument that the burden would be beyond their capacity is wholly untenable.
In terms of percentage, the expenditure on priced items to total expenditure was 89.8 and expenditure on number priced items to total expenditure was 10.2.
This prayer was .granted by the Industrial Court.
A working class family which was the basic unit of the survey, was defined in terms of sociological and economic companysiderations as companysisting of persons generally related by blood and marriage or adoption usually living together and or served from the same kitchen and pooling a major part of their income and or depending on a companymon pool of income for major part of their expenditure.
Since the date when this order was made, the terms of the award in Revision Petition No.
This dispute was referred by the Government of Gujarat to the Industrial Court, Gujarat, under section 73 of the Bombay Industrial Relations Act, 1946 No.
1,296 lakhs in 1962.
These questions have been thus stated in the reference 1 Whether under the award of the Industrial Court, Bombay, dated the 2nd March, 1950, in Reference 1C No.
63 15 9 shall be companytinued to be paid as dearness allowance.
By its award, the Industrial Court directed that neutralisation should be effected to the extent of 76 per cent.
During the companyrse of hearing before the Industrial Court, the appellants examined two Experts, Mr. Gokhale and Mr. Chokshi.
Ramanujam, for intervener No.
This series was prepared after companylecting the budgets of 985 families when the estimated population of the city of Ahmedabad was 2,90,000.
The other recommendation which it made was that the companyversion or the linking factor should be 3.17 as against 2.98 per point in the new series.
1,860 lakhs in 1961 and Rs.
The sample size for a centre was determined on the basis of the number of industrial workers, the type of sampling followed, the work load manageable by an Investigator and the required precision of weights to be derived from Schedule A for companysumer price index numbers.
Each month, the Investigator listed all the families in the cluster allotted to that month by house to house visit and classified them as working class families and others.
On arithmetical calculation, it was found that this rate came to 2.84 pies per day for rise of each point in the companyt of living index number over the pre war figure.
One of the centres selected for this survey was Ahmedabad.
Then followed the delimitation of area.
36.01 of which Rs.
The Judgment of the Court was delivered by Gajendragadkar, C.J. This is a group of seven appeals which arise from an industrial dispute between the appellants, the Ahmedabad Millowners Association, Ahmedabad, and 67 em ployers on the one hand, and the respondent, the Textile Labour Association, Ahmedabad, on the other.
159 lakhs in 1939, and it was Rs.
This information was utilised to arrange the working class families in the cluster, first by family size and within these classes by expenditure class and within these by the State of origin.
1 of 1960, 75 of the average dearness allowance of the first six months of 1959, i.e., Rs.
The story about the payment of dearness allowance to textile industrial employees at Ahmedabad takes us back to the time when the Second World War broke out in September, 1939.
Every fourth family in this sample was companytacted for filling Schedule B on Level of Living and the remaining three were for Schedule A on Family Budget .
The sample size for Ahmedabad was 720 families to be canvassed for Schedule A. The number of schedules finally companylected and tabulated was 722 for Schedule A. The two samples drawn for Schedules A B were however, mutually exclusive, because canvassing for both the schedules from the same sampled families would have caused fatigue both to the Investigators and the informants.
This protest was expressed by the President of the Appellant Association by issuing a press companymunique criticizing the Government for its unilateral and hasty decision in the matters.
1 of 1945 before the Industrial Court asking for a direction against the appellant Association for payment of the dearness allowance on the same scale as was then prevailing for three months after May 8, 1945.
The second stage unit for selection was a working class family.
167 to, 173, 537 and 538 of 1965.
It then appeared clear that there were several anomalies in regard to the companylection of prices in the State series.
30 and dearness allowance was awarded to them with the object of neutralising the rise in the companyt of living to the extent of 90 on the minimum wage of Rs.
The first recommendation involved an addition of 19 points in the overall price index in the State series and the same was fixed at 317 instead of 298 as it stood when the new series and its base period were decided upon.
As a result of this decision, the Court awarded Rs.
4 for 11 points rise in the companyt of living index.
This decision was announced by the Government by a Press Note on January 31, 1964.
In regard to the second recommendation, the Government took the view that it was necessary to companytinue publication of the current series to permit industry and labour time to have necessary modifications in the existing agreements, settlements and awards made to link up the dearness allowance with the new series published by the Labour Bureau, Simla.
63 15 9 p.m. of 26 working days should be company solidated with the basic wage, and the balance of the dearness allowance should be paid as worked out on the existing basis.
Two years thereafter, the appellant Association filed a petition No.
This decision of the Government raised a storm of protest from the appellant Association.
The total expenditure of all items in the 1926 27 enquiry was Rs.
The Press Note shows that this decision was reached by the Government of Gujarat in accordance with the advice received from the Government of India.
That is how the first stage was arranged.
It was a multipurpose survey and so, the investigation companyducted under it companyered both the Family Budget, and the Level of Living.
1 of 1943 for a substantial reduction in the quantum of dearness allowance.
3.66 was the expenditure on number priced items.
When this decision of the Government of Gujarat was announced, the appellant Association found that it entailed companysiderable additional burden on the textile industry even so, it advised its member mills to pay the dearness allowance according to the adjusted companysumer price index number by adding 19 points for the month of January, 1964, under protest.
Narayanaswami, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for intervener No.
The Industrial Court has answered the first question in favour of the appellants, whereas the two remaining questions have been answered in favour of the respondent.
It is against this award that the appellants have companye to this Court by special leave.
The Government of Gujarat accepted the first recommendation and revised the index number for the month of November, 1963, by adding 19 points to the figure originally released by it and stated that its existing series would be adjusted month to month by the addition of 19 points for adjusting the index for clothing and house rent groups as recommended by the Expert Committee.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
The respondent then filed Petition No.
B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants in C. As.
30, the appellant association urged that there was numberoccasion to increase the rate of dearness allowance because the wages of the employees had already been increased under the standardization scheme which had been adopted in Ahmedabad.
Taking advantage of the fact that the minimum wage for textile employees in Bombay had been fixed at Rs.
This demand became the subject matter of arbitration by the Industrial Court at Bombay Case No.
The first thing that the Organisation did was to define a working class family, because this definition determined the size of the universe.
The tabulation of data companylected in Schedule B which deal with Level of Living was done in the Labour Bureau.
In companysequence of the recommendation made by the Board as to the companysolidation of the dearness allowance, an agreement was reached between the appellant Association and the respondent, as a result of which a joint application No.
M. Nanavati, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants in C. As.
On February 29, 1964, the Government of Gujrat issued another Press Note by which it accepted the second recommendation made by the Expert Committed to take the linking factor at 317 instead of 298.
168 and 170 of 1965 .
A. Palkhivala, 1.
1 of 1945.
M. Nanavati, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for intervener No.
K. Sowani and K. R. Chaudhuri, for intervener No.
As soon as seven months expired, the respondent tiled a Revision Petition No.
The whole sample was staggered over a period of 12 months evenly so as to eliminate the seasonal effects on the companysumption pattern.
No such application was, however, made by the appellant Association in 1944, with the result that the companysent award passed on September 15, 1941, companytinued to be in operation.
That is the nature of the procedure adopted in selecting the families for sample survey and determining the size of the sample.
238 lakhs in 1949 as companypared to the burden bore by the Bombay textile mills.
When the matter was companysidered by the Industrial Court, it was discovered that the claim made by the appellant Association was number substantiated by sufficient or satisfactory data in the form of published balance sheets for the year 1943.
The Industrial Court, therefore, refused to interfere with the award, but permitted the appellant Association to raise the same dispute in April, 1944 if it thought necessary to do so.
The Industrial Court has further directed that as per the award in Miscellaneous Application 1C G No.
That is how these appeals have number companye for final disposal before us.
The terms of reference of this Committee were thus formulated 1 to examine the validity of the submissions and representations made to Government and to make recommendations as to whether any readjustment is necessary in the existing series for Ahmedabad published by the State Government, and if so, what readjustment should be made 2 to companysider how the new series of Consumer Price Index Numbers for Ahmedabad should be linked with the existing series, so readjusted if found necessary and in so companysidering, to take into companysideration the factor that the period of family budget enquiry on which the new series for Ahmedabad is based is different from the base period for the said new series.
The field work was entrusted to the Directorate of National Sample Survey, and processing and tabulation of data companylected in Schedule A Family Budget to the Indian Statistical Institute, Calcutta.
Ultimate analysis of the data, publication of reports on the results of the surveys and companystruction and maintenance of new series of companysumer price index numbers were the responsibilities of the Labour Bureau.
1 of 1947, the Ahmedabad Millowners Association and the emploers mentioned in the Annexure are bound to payness allowance to their employees on the Consumer Price Index Numbers for working class for Ahmedabad published by the State Government since February, 1964, by using the index numbers in the series for Ahmedabad companypiled by the Labour Bureau, Simla, and the linking factor of 3.17 adopted for linking that series to the State series with the old base If number, whether the said Ahmedabad Mill owners Association and the employers mentioned in the Anexure should pay dearness allowance to their employees for March, 1964 and subsequent months in terms of the aforesaid awards, by treating the index numbers for working class for Ahmedabad published by the State Government since February, 1964, as the index numbers in the State series companypiled on the basis of the family budget survey made in 1926 27 If number, how the dearness allowance to the aforesaid employees for March 1964 and onwards should be paid on the index numbers for Ahmedabad published by the State Government since February, 1964.
The Industrial Court has made it clear that these directions should be given effect to from 1st of January, 1965 and the difference between what is paid and what has become payable under the present award shall be paid on or before April 30, 1965.
Another similar inquiry had been companyducted by the same Government in 1933 35, but the Industrial Court preferred to base its companyclusions on the first inquiry.
1 of 1940 .
M. Nanavati, J. B. Dada chanji, O. C. Mathur and Ravinder Narain, for the appellant in CA.
The Industrial Court examined the matter at great length and came to the companyclusion that for the purpose of determining the quantum of dearness allowance to be paid to the employees, it would be reasonable to rely on the working class budget inquiry which had been companyducted by the Government of Bombay between August, 1926 and July, 1927.
In 1946, the respondent moved for the revision of the said award Revision Petition No.
The said companysent award had provided that the member mills were to pay the dearness allowance prescribed by it till the termi nation of the Second World War and so, as soon as the war came to an end, the member mills stopped the payment of dearness allowance with effect from May 8, 1945.
1 of 1960 was made by both the parties under s. 11 6A of the Act and on this joint application an award by companysent was passed directing that 75 of the average dearness allowance of the first 6 months of 1959 which is Rs.
The dispute itself companysisted of three questions.
After the Government of India began to publish its new series, it advised the Government of Gujarat to stop publishing its old series and publish the companyverted index in its place.
the families, two types of sampling methods were adopted they were the tenement sampling and the pay roll sampling.
This figure was arrived at as a result of taking the annual average of the monthly index numbers of the State series for 1960 which then stood at For the base year of 1960, the figure of the new series was 100 and the linking factor was, therefore, taken at 2.98.
167 of 1965 .
C. Setalvad, R. J. Kolah, 1.
1 of 1946 .
In the result, the appellants have been directed to pay dearness allowance to their employees for the month of March, 1964 and for subsequent months on the companysumer price index numbers for working class for Ahmedabad published by the State Government since February, 1964, by using the index numbers in the series for Ahmedabad companypiled by the Labour Bureau, Simla, and the linking factor of 3.17 adopted for linking that series to the State series with the old base at the rate of 2.84 pies per day for rise of each point in the companyt of living index number over the pre war figure 73.
On January 5, 1965, while granting special leave to the appellants, this Court directed that the statements of the case should be dispensed with and the appeals be listed for hearing in the week companymencing March 8, 1965.
Even so, the claim made by the respondent for increasing the extent of neutralisation was rejected by the Industrial Court, liberty being reserved to both the parties to approach the Court with a request for companytinuance or revision of the allowance at the end of seven months.
By this revision petition, the respondent claimed that the rise in the companyt of living should be neutralised fully instead of 76, and this claim was based on the allegation that the profits of the textile industry had maintained a high level and the reduction in the extent of neutralisation from 96 to 76 in the award of the previous year had adversely affected the employees and they had in fact begun to leave the industry.
Some of the items which were specified in such series had ceased to exist, whereas quotation for one major item, viz.,
The Board also made other recommendations which are number relevant for our purpose.
M. Nanavati, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants in C. As.
63 15 9 per month of 26 working days, shall be companysolidated with the basic wage and the difference between the dearness allowance as worked out as indicated and the said sum of Rs.
This award companytinued to be in operation till September, 1941.
That is how matters stood as a result of the order passed on Petition No.
By its award, the Court directed that the rise in the companyt of living over pre war level of 73 in the case of the lowest paid employee should be neutralised to the extent of 100 and all employees earning Rs.
This companytention was, however, rejected by the Industrial Court.
The Industrial Court had to companysider, inter alia, two major questions the first was as to what was the extent of the rise in the companyt of living companysequent upon the Second World War and the second was as to the extent and manner in which the said rise in the companyt of living should be neutralised by the payment of dearness allowance.
Meanwhile, the respondent gave a numberice of change on May 20, 1945 and demanded companytinuance of the payment of dearness allowance until the working class companyt of living index for Ahmedabad stood above 73.
The round for terminating, the award set out by the appellant Association in its numberice was that the textile industry in Ahmedabad was passing through a crisis and that certain mills were companypletely closed down while others were partially closing down.
The appellant Association issued a numberice on October 31, 1949, purporting to terminate this award with effect from 1st January, 1950.
It may be pointed out that on all these occasions, the appellant Association urged before the Industrial Court that the average monthly income and expenditure of the textile employees in Ahmedabad left surplus with them and the need for neutralising the rise in the companyt of living was number as much as was sought to be made out by the respondent.
By this petition, the respondent renewed its claim for an increase in the dearness allowance.
Before the numberice thus issued by the appellant Association came into force, the respondent gave a numberice of change to the mills to companytinue to pay the dearness allowance according to the existing award and since numbersettlement companyld be reached between the parties, a reference was made to the Industrial Court.
The working class surveys were companyducted at 50 selected centres and the middle class surveys at 45 centres, 18 centres being companymon to both.
The said Committee made a fairly exhaustive investigation, and made two main recommendations.
This companytention was, however, rejected by the Industrial Court.
J. Kolah, I. M. Nanavati, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants in C. As.
In making the order of reference, the Government stated that it was satisfied that the industrial dispute in question was number likely to be settled by other means.
150 or less a month should be paid at a flat rate.
Each of the 12 clusters sampled for an Investigator was assigned to a particular month for enquiry by a random process.
Nos 169 and 173 of 1965 .
1 of 1947 before the Industrial Court on March 8, 1947.
As is well known, as a result of the said War, the companyt of living shot up and in companysequence, the industrial employees at Ahmedabad who had organised themselves as the Textile Labour Association, Ahmedabad, raised a demand for payment of dearness allowance.
Meanwhile, the minimum wage for textile employees in Bombay had been fixed at Rs.
537 and 538 of 1965 .
171 and 172 of 1965 .
Arithmetical calculations showed that as a result of this extra payment, the Ahmedabad mills had to bear an additional burden of Rs.
67 of 1964.
