D.C.M. CHEMICAL WORKS Vs. WORKMEN

JUDGEMENT

(1.) These two appeals by special leave arise out of the same award of the Industrial Tribunal, Delhi, and will be dealt with together. Appeal No. 4 is by the management of the D.C.M. Chemical Works while appeal No. 5 is by the workmen. The management hereinafter will be referred to as the appellant for the purposes of both appeals and the workmen will be referred to as respondents. A dispute arose between the parties with respect to various matters including wage scales, dearness allowance and gratuity. As the parties could not come to terms it was referred to the industrial tribunal for adjudication and there were as many as eleven issues which were the subject-matter of reference. The main point however on which the parties differed was whether in determining the wage-structure etc. of the chemical works which is a constituent unit of the Delhi Cloth and General Mills Limited (hereinafter called the Company), the over-all position of the Company should be taken into account or only the position of this one unit, namely, the chemical works. The respondents contended that the chemical works was an integral part of the Company and therefore the over-all position of the Company should be taken into account and the wage-structure etc. fixed accordingly; in particular it was pointed out that there were differences in wage-structure etc. between the various units which were controlled and owned by the Company and which were all situate in the same area in Delhi and that these differences should be eliminated and all the enterprises in Delhi controlled by the Company should be treated on the same footing. On the other hand the contention of the appellant was that though the chemical works was one unit of a large number of industries controlled by the Company, some of which were situate in the same area in Delhi, the various units were independent industries and each unit had to be considered on its own and the wage-structure etc. fixed on the basis of the financial position of each unit; in particular, it was urged that two of the main units in Delhi were the textile mills run by the Company and the claim of the respondents that the chemical works should in all matters be treated on a par with the textile units was untenable, on the ground, among others, that it would be against the principle of industry-cum-region. Before therefore we take up the particular matters raised in the two appeals before us, we shall first have to consider whether the claim of the respondents that the overall position of the Company should be taken into account in fixing the wage-structure etc. of the chemical works is sound; for if that position is accepted, the award may have to be set aside as the tribunal has held that in the circumstances of this case the chemical works should be treated as an independent unit and that the wage-structure etc. therein cannot be fixed on the basis of the over-all position of the Company.

(2.) In order to appreciate the various contentions put forward by the parties on this question it may be useful to look into the history of the Company and how it has grown. The Company came into existence in 1889 with a modest capital of about Rs. 10 lacs. It seems that the policy of those in control of the Company was to plough back a substantial part of the profits into the industry itself and to create a reserve for that purpose. Originally the Company started with a textile mill but in course of time with the help of ploughed back profits and also with the aid of further capital, the Company set up a large number of other industrial concerns in Delhi and elsewhere. In Delhi itself, the Company now has the Delhi Cloth Mills, the Swatantra Bharat Mills which are both textile concerns, the D.C.M. Tent Factory established in 1940, and the chemical works with which we are concerned in the present appeals. Besides, there are other industrial concerns owned and controlled by the Company outside Delhi, as for example, the Daurala Sugar Works established in 1932, the Lyallpur Cotton Mills in 1934 and the Mawana Sugar Works in 1940.

(3.) The Chemical works were started in 1942 and the only line of production at that time was sulphuric acid. In 1943, an alum plant was set up, in 1944 a soap plant, in 1945 a superphosphate plant and in 1946 a contact sulphuric acid plant. In 1947 a vanaspati plant was established and also a power house was erected in order to meet the requirements of the vanaspati plant. In 1948-49 a caustic soda plant was added so that what began as modest subsidiary to the textile mills has now expanded into a full fledged unit for production of chemicals and vanaspati. The total capital which was originally about Rs. 10 lacs when the Company started in 1889 has now grown to Rs. 4 crores. Even so the capital employed in the chemical works has always been found from the reserves of the Company and is now of the order of over a crore. It is also not in dispute that very little out of the production of the chemical works is used in the textile mills of the Company and that by far most of the production is sold in the open market. Further even the small part of the production that is used by other units is charged at market rates and not at cost price, so that for all practical purposes the chemical works is being run as an independent unit.