(1.) The last straw which might break the back of a camel may or may not exist but if it exists can one say that it will not break the back of the camel if it proceeds for a hundred miles but it will break its back if it proceeds 10 miles more ? Can one say so without examining the question closely and carefully and without applying ones mind to this dimension of the matter ? Similar is the question which arises in this petition instituted by the Chalthan Kamdar Mandal under Art. 227 of the Constitution arising from an award rendered by the Industrial Court in Reference (IC) No. 144 of 1980 on 28/10/1980 The award is challenged to a limited extent. The grievance is that while the award upholds the claim of the workers to a pay-scale adopted by the industry in the whole region as recommended by the Second Wage Board eleven years back in 1969 now in 1980 a rider is added. The rider is to the effect that it will be enforced only with effect from a subsequent date ( 1/11/1980 and not with effect from the date of reference ( 24/04/1980 as the Industrial Court would be Ordinarily expected to do even if it was disinclined to make it effective retrospectively from the date of making of demand. So far as employers are concerned they have accepted the award in toto in the sense that they have not challenged any part of the award by way of a petition under Article 227 of the Constitution of India and it has become final and binding in so far as they are concerned and to the extent it is adverse to them.
(2.) The main grievance of the workers is that the direction as regards implementation of the pay-scales recommended by the Second Wage Board should have been made effective from the date on which the demand was made. There was no good ground for making it effective from a date later than the date of the making of the reference in any case. The resultant position is that the workers would be deprived of the benefit of the pay-scales as recommended by the Second Wage Board for a period of about seven months after the date on which the reference came to be made. Toe Industrial Court has the discretion to give retrospective effect to its directions. It can also give prospective effect. That depends upon the facts and circumstances of each case. The Industrial Court however cannot do so without taking into consideration all the relevant aspects of the matter. It cannot be a matter of the pleasure of the Industrial Court. It must be built on some principle. It cannot be the ipse dixit of the Industrial Court. The petitioner contends that there is no good reason for not directing the employers to implement the pay-scales as recommended by the Second Wage Board with effect from the date of the making of the reference if not from an earlier date. The Industrial Court has considered the question as regards the financial capacity of the employers and the question as regards the justification for the demand for pay-scales as recommended by the Second Wage Board in paragraph 6 onwards of its award. The Industrial Court has conceded that the Second Wage Board has made its recommendations in the context of the situation obtaining in 1969. The Industrial Court has also conceded that the cost of living has risen sharply since 1969 and the wages as recommended by the Second Wage Board were not given to the workers even till 1980 (more than 10 years). The Industrial Court recorded a clear finding to the effect that the employers were giving wages which were comparatively low in the present circumstances. The Industrial Court also recorded a finding to the effect that the recommendations though they were merely in the form of recommendations assumed importance inasmuch as the cost of living had gone very high since 1969 which was the year in which the recommendations were made. And that in that limited sense it could be said that whatever was recommended at the relevant point of time in 1969 could be considered to be the minimum which would be required to be paid to the workers at present. It is not in dispute that the pay-scales which were recommended by the Second Wage Board have been given effect to by the other sugar factories in the region viz. Chalthan Gandevo Bardoli and Maroli. It should be mentioned that the respondents employers had commenced production only two years prior to 1980. The employers had made a net loss of Rs. 1 41 0 and odd in 1978-79. According to the respondents the estimated loss for the year 1979-80 was in the neighbourhood of about a crore of rupees. Another circumstance which impressed the Industrial Court was that the employer was a Cooperative Society which had engaged itself in the production of sugar. It was a Society formed by the farmers from a backward area. The Industrial Court took into account the fact that the society had not been able to declare any dividend so far. All the same the Industrial Court upheld the contention of the workers that they were entitled to the pay-scales as recommended by the Second Wage Board in 1969. The view taken by the Industrial Court is expressed in the following words :-
(3.) Is it correct to say that in respect of every demand for wage fixation the factor as regards the losses incurred by the employer is a good and valid answer to deny the demand of the workers? The question will bear examination on principle. In a way labour is a commodity or an input which the employer needs to purchase from the open market like other raw materials commodities or inputs required to be purchased from the open market in order to manufacture its products or carry on its business. Let us visualize the case of an employer who is working at a loss. When he goes to the market in order to purchase the essential inputs say coal or oil or cotton or jute or machinery or spare parts will the supplier countenance his request for supply of goods at a lesser or concessional rate at a rate lower than the market rate? Would the supplier not refuse to hear the argument that he is incurring losses and show him the door? An employer will not be able to secure from the market the raw materials coal oil electricity and the other materials required for the running of the factory or business at lesser rate merely because he is incurring losses. If the employer has a fleet of trucks it cannot obtain oil or diesel from a Petrol pump at a rate lower than the rate at which it is supplied to all other purchsers. If the producer of a commodity or supplier of goods will not sell to the respondents the commodity at a lesser price than the price obtainable in the open market with what face can the employers contend that they are entitled to purchase the commodity in question namely labour (which may be treated as a commodity for the purposes of the present discussion) at a rate lower than the rate at which it is made available to their counterparts and rivals? What the other factory owners have to pay for the labour the respondents will also have to pay to their workers for they cannot claim arty privileged treatment merely on account of the fact that they are incurring losses. Returning now to the facts of the present case there is another factor which cannot be ignored. It may be realised that the respondent Co-operative Society is a society formed by the farmers growing sugarcane. If the respondent society pays to its members prices higher than the prevailing prices for the sugarcane supplied by its own members it would be incurring losses. There is no manner of finding out whether the respondent society has paid to its farmer members the same price as is being paid by the other factory owners or the price at which it could be sold in the open market. It might well have paid a price higher than the price at which sugarcane could have been obtained in the open market. It would not be possible to say positively that the respondent society has in fact done so. But there is the inherent possibility of this having happened when the factory in question is being run by a Co-operative society formed by the farmers producers themselves and the farmers have to pay to themselves through the agency of the collective society formed by themselves. One paying to oneself does not have to consider the cost because it is like putting something from ones own left side pocket to ones own right side pocket. They may well pay to themselves higher price and create a situation where they can show that they are incurring huge losses. This aspect cannot be ignored. Be that as it may so far as the present petition is concerned the question is whether the Industrial Court has at all applied its mind to the relevant aspect as to whether the employers could or could not bear the additional burden for the seven months (intervening between the date of the reference and the date from which the direction has been given effect to) in the light of the aforesaid circumstances. The Industrial Court has altogether failed to do so. And that is where the error apparent on the face of the record has crept in. Counsel for the employers has pressed into service the following decisions rendered by the Supreme Court in support of his contention that it is a matter of discretion and this Court in exercise of its power under Article 227 of the Constitution of India should not interfere with the discretion exercised by the Industrial Court viz. Rajkamal Kalamandir v. Indian Motion Pictures Employees Union 23 Factories Journal 74 and Bengal Chemical and Pharmaceutical Works v. Its Workmen (1969) I LLJ. 751. The two propositions enunciated by the Supreme Court in the aforesaid decisions are (i) that under Art. 227 the High Court cannot exercise powers akin to the powers of an appellate Court and substitute its own discretion or decision in place of that of the Tribunal and (2) that the question as regards the date from which the award should be made effective is of discretion (albeit discretion has to be exercised on some rational principle . A reference to Bengal Chemical and Pharmaceutical Works Ltd. v. Its Workmen (1969)I L.L.J. 751 would show that the Supreme Court his accorded its approval to the proposition that art award can be made effective retrospectively from the date of the demand i.e. even a date prior to the date of the making of the reference. It is a matter of discretion to be exercised by the Tribunal. Reliance has been placed on two earlier decisions of the Supreme Court in this connection as is evident from the following passage:-