Holding

The Tribunal’s retrospective wage‑scale revision and its clerical correction of the award under Rule 31 are valid, and dearness allowance need not be indexed to cost of living.

Summary

The Supreme Court examined an award by the Maharashtra Industrial Tribunal that revised wage scales for Tata Consulting Engineers' workmen, made the revisions retrospective to 1 January 1976, and added a flat increase of Rs 150 for draughtsmen and Rs 100 for other categories. The workmen sought to have the flat increase applied to each employee, claiming the Tribunal’s amendment under Rule 31 was beyond its jurisdiction and amounted to a fresh award. The Court held that the retrospective revision was justified given the employer’s financial capacity, and that the Tribunal’s correction of the omitted words "to each employee" was a permissible clerical correction, not a new award. It also ruled that dearness allowance need not be linked to the cost‑of‑living index. Consequently, both appeals were dismissed, with the order correcting the award upheld and the dearness‑allowance methodology affirmed.

Issues considered

Whether the Tribunal could make the revised wage scales retrospective from 1 January 1976.
Whether the Tribunal’s amendment under Rule 31, adding "to each employee", exceeded its jurisdiction and constituted a fresh award.
Whether dearness allowance must be linked to the cost‑of‑living index.
Whether the Tribunal could grant an ad‑hoc flat increase to each employee as part of wage‑scale revision.

Legislation cited

Industrial Disputes (Bombay) Rules, 1957s. Rule 31

Subjects

industrial disputewage revisionretrospective awardRule 31dearness allowancetribunal jurisdictionaward correctionflat increasefinancial capacity

Judgment

166

A TATA CONSULTING ENGINEERS
v.
WORKMEN EMPLOYED AND VICE-VERSA
November 13, 1980
B [V. R. KRISHNA IYER, R. S. PATHAK & 0. CIUNNAPPA REDDY, JJ.J

Industrial disputes-Tribunal making Gn award prescribing revised grades/
scales of pay to different categories with retrospective effect fro1n 1st .Tanuary,
1976-Validity of retrospectivity of the award.
•
Industrial Disputes (Bonibay) Rules, 1957-Rule 31, scope of-Whether
c the clarification n1ade by the Tribunal prescribing that a flat increase of Rs.
150/- in the category of Dra11ghtsn1en and Rs. 100!- in the case of the other
categories payable "to cacl1 oj its e111pfoyl'!es" an1011nts to a supplC'rnr'nfary
award not pennissible under Rule 31.
Dismissing the appeals by special leave, the Court.
}{ELD : Per Pathak, J. (Krishna Iyer and Chinnappa Reddy, JJ. concu1Ting)
D
(1) Having regard to the financial capacity of M/s. Tata Consulting Engi-
neers, the appellant, and the ,material on the record and the various olher consi-
derations \~rhich prevailed with the Tribunal, the granting of revised wa.ge
scales is in order. Although the V.'age scales were introduced as long ago as
1973 they were maintained at that level except for a slight revision some tilne
thereafter. No dearness allowance \Vas paid until the beginning of 1977 and
E the house rent allowance also was introduced about that time. The cost of
living had gone on increasing from 1972 onwards and the dearness 1ilowancc
and house rent allowances made no appreciable impact in neutralising the
increasing cost. During all these years, the appellant had continued to enjoy
increasing profits; nonetheless the en1oluments received by the workmen did not
receive the impress of the appellant's growing prosperity. The Charter of De-
mands was presented by the Union in July, 1974 and when conciliation pro-
F ceedings failed the State Government made a reference to the Industrial Tribu-
nai in 1975. The several considerations which prevailed with the Tribunal giv-
ing retrospectivity to the revised pay scale~ and referred to by it cannot be
ignored. [174C-G]
. .,
;

(2) It is not a universal rule that the dearness allowance should in all
cases be correlated with the· cost of Jiving index. The Tribunal, in the present
case, considered the matter and found it sufficient and in acoorc1 \\ith justice
G
that the wage sca1es should be restructured with suitable incren1ents provided
therein. Jt noted that dearness allowance was being granted by !he appellant
at 10% of the salary subject to a minimum of Rs. 50/- and house rent allow-
ance at 30% of the basic salary. Having regard to the not inconsiderable
improvement in the level of the basic \vage, it observed th:i.t there v.:ould be
a consequent increase in the dearness nllowance and house rent a11owance.
In view of the increase so secured, the Tribunal rejected the "uggestion that
H
a slab system ~houkl be, introduced in the dearness allowance or that there
should be any other modification of the principle on which dearness aliowance
V.'as being presently granted. Jt declared that the cumulati·,rc effect of an im-
TATA CONSULTING ENGINEERS V. WORKMEN 167

proved wage structure together with dearness allowance operating on a slab A
system would throw an impossible burden of about Rs. 1 crore on the financial
capacity of the appellant. It was open to the Tribunal to adopt the position
• which it did. If the dearness allowance is linked with the cost of living index;·
the whole award \Vi11 have to be reopened and ,the entire basis on which it
has been made will have to be reconsidered. The award is a composite docu~
ment in which the several elements of increased wage scales, larger increments,
longer span of 20 years for earning increme·nts, dearness allowance at 10% of B
the basic wage, besides several Other benefits, have been integrated into a
ha.lanced arrangement in keeping with what the Tribunal has found to be the
financial capacity of the appellant. It is not possible to maintain one part of
the award and supersede another. [179 E·F]

The Hindustan Ti111es Ltd., l•./cw Del/ii v. Their Work1ne11, [1964] 1 SCR
234, 247 and Bengal Che1nical & Phannace1t1;cal Works Linii<ed v. Its Work· c
men, [19691 2 S.C.R. 113. distinguished.
(3) The jurisdiction given to the Tribunal by rule 31 of the Industrial
Disputes (Bombay) Rules, 1957, is closely circumscribed. It is only a clerical
mistake or error which can be corre1.:ted and the clerical mistake or error must
arise from an accidental slip or omission jn the award. An accidental slip
or omis::1ion implies that something was intended and contrary to that intention
what should not have been included has been included or what should have
D
been included has been omitted. It must be a mistake or error amenable
to clerical correction only. It must Ilot be a n1istake or error which calls for
rectification by modification of the conscious adjudication on the issues involved.
[175 A-CJ
Per contra
The order of 22nd Dccen1ber, 1978 is invalid so far as it amends paragraph E
23 of the original award. The amendment hasi resulted in the Tribunal mak~
ing, as it were, a supplementary a.ward, whereby a further relief is being
granted beyond that granted in the original award. The original award was
completed and signed by the Tribunal, and it cannot be reopened now except
for the limited purpose of Rule 31. In travelling outside and beyond the
tenns of the original a.\vard, the Tribunal has committed a jurisdictional error.
The evidence contained in the award throughout provides incontrovertible proof F
that this flat increase (ad·hoc) was never originally intended in the award.
There was only one increase contemplated in the award, in paragraph 23 of
the award and it is more than plain that the increase was the one incorporated
in the revised pay scales pertai11ing to different categories. No second flat in-
crease \\.'as envisaged at all. The an1endment made by the Tribunal has the
effect of providing a second increase, this time to each individual workmen.
If, ns the Tribunal ha.s stated in the amendment order, the increase in para· G
graph 23 was intended to ,apply to each individual workmen, there is nothing
in the body of the award to forn1 the foundation on which the actual figures
in the restructured pay scales can be made to rest. There will be no explana-
tion ·~1hy· the initial start of the revised pa.y scales has been increased by
Rs. 150/- in the' case of the category of Draughtsmen and Rs. 100/- in the
case of other categories. Considering the fitment of the workmen in the revised
scales, it was stated in the award that workman found drawing a salary less
H
than the beginning of 1he gra.de would be' stepped up to the beginning of the
grade and if his pay fell between two steps in the reclassified pay scales the
168 SUPREME COURT REPORTS [1981) 2 S.C.R.

A basic pay \·vas to be fixed at the s.tep higher in the revised scale. Further the
award was made on the basis that the overall :financial load according to para-
graph 33 of the award would be to the tune of about Rs. 5 lakhs. It was
that figure which the Tribunal had in mind against the backdrop of the gross •
annual figures when it made the revised pay scales restrospective from 1st
January, 1976. [176 D-G, 177A, 178 D-F]

B The statement, Exhibit C-51 afforded an indication merely of what the
additional financial load would be if a flat increase \\'as given to the individual
workmen on the alternative basis set forth therein. None of the alternatives
was actually adopted by .the Tribunal, because when the award was made the
1"ribunal proceeded instead to restn1ctnre the wage scales by the addition of
Rs. 150/- in the case of the category of Draughtsmen and of Rs. 100/~ in the
case of other categories to the initial pay in the wage scales pertaining to these
c categories. The addition was integrated as a feature of the wage· scales, it was
not regarded as an addition to the pay of each individual workmen. [l 78A-C]

It is an accepted principle that consent by a party cannot confer jur.isdiction
on a court. What is \Vithout jurisdiction will remain so. [178 E-Fl

Per 0. C. Redd)', J. (Majority view, Iyer and Reddy, JJ.)
D
The order dated December 22, 19i8 of the IndustriaJ. Tribunal which pur-
ports to correct the award dated December 20, 1978 cannot be considered in
effect to be a fresh award and it is in order. The omission of the words "to
each employee" after the figure Rs. 150/- and again after the figure Rs. 100/-
v..as clearly an accidental slip or omission which the Tribunal \Vas entitled
to correct. The application for the correction was made immediately, that is
E to say, two days after the Award, while iron \Vas still hot or when everything
must have been fresh to the minds of the Tribunal. Even the endorsement
n1ade on the application by the Advocate for the Company to the effect "sub-
mitted to whatever this honourable Tribunal desires to do", does not indicate that
the Company had any objection to the award being corrected as sought by the
enlployees union. On the other hand the endorsement reads as if there was
tacit agreement on the part of the Company to the correction sought by the
F union; it cannot possibly be doubted that an Industrial Tribunal deciding upon
the v.•age scales of the employees of an establishment would have full liberty
to propose ad-hoc increase of salaries as part of the revision of pay scales, not
can it be doubted that fitment into the revised pay scales is ce1tainly a part of
the revision of pay scales. · This is elementary a.nd fundamental to the jurisdic-
tion of the Industrial Tribunal in revising wage scales. If without any fiat or
ad-hoc increase of salary the workmen were to be fitted into revised scales of
G pay, it would, obviously, result in serious anomalous situations. In the case of
several senior employees, the revised scale would yield but a ve1y small and
almost a token increase in the size of the pay packet whereas the junior em-
ployees would get a large benefit While workmen mi.sing industrial disputes
for revision of wage scales are certainly minded about their future prospects in ,
the matter of wages, they, surely would be more concerned with the immediate
benefit accruing to them. That was why the Industrial Tribunal thought that
H all round fiat increase of Rs. 150/~ in the case of Draughtsmen and Rs. 100/-
in the case of other workmen-to each employee-was called for. [180C,
1810-E, G-H, 182A, 183D-E, G-H, 184A-BJ
TATA CONSULTING ENGINEERS v. WORKMl'jN (Pathak!.) 169

( 4) While it is true that Dearness Allowance linked to cost of living index A
is ordinarily the best and the most scientific method of computing dearness
allowance, it cannot always be said that an illegality warranting interference
under Article 136 is committed if some other method is adopted. In the
ins-ta.nt case, the 1'ribunal has given satisfactory reasons for adopting a different
.. mode. [184 F-GJ

B
CIVIL APPELLATE JURISDICT!Ot\ : Civil Appeals Nos. 2299 and
2300 of 1979.

Appeal by Special Leave from the Award dated 20-12-1978 of
the Industrial Tribunal Maharashtra in Reference (IT) No. 292 of
1975, published in Maharashtra Government Gazette dated 15th
February, 1979.
c
G. B. Pai, Manick K. Gagrat, J. B. Dadachanji, 0. C. Mathur and
K. J. John for the Appellants in CA No. 2299 and Respondents in CA
2300/79.

V. M. Tarkunde, P. H. Parekh, S. R. !Deshpande and Miss Manik D
Tarkunde for the Respondents in CA 2299 and Appellants in CA
No. 2300/79.

The following Judgments were delivered :

. PATHAK, J.-This appeal by special leave has been preferred by E
Tata Consultancy Engineers against an award dated 20th December,
1978 of the Industrial Tribunal, Maharashtra, Bombay revising the
wage scales of certain categories of employees and granting various
other benefits.
F
Tata Consultant Engineers, at its inception, was a partnership firm
but subsequently the partnership was dissolved and in 1974 the under-
taking became one of the divisions of Tata Sons Limited. It func-
tions as a consulting organisation and a service industry, and does not
manufacture any product or carry on trade. Its workforce consists
of engineers and supervisors and different categories of workmen. Out
G
• of 665 employees at Bombay, the draftsmen and the administrative
staff number 306. These workmen are members of the Tata Consul-
tant Employees Union. They served a Charter of Demands in July,
1974, on the appellant, and as their demands were not accepted and
conciliation proceedings proved fruitless, the State Government made
a reference of the dispute under s. 10(1) (d), Industrial Tribunal, H
Maharashtra for adjudication. The Reference was numbered I. T.
No. 292 of 1975.
•L
•
•
170 SUPREME COURT REPORTS [1981] 2 S.C.R. !
A The Union filed a statement before the Tribunal claiming an up-
ward revision of the wage scales and dearness allowance and an in-
crease from fifteen years to twenty years in the span for earning an-
nual increments. It was urged that the Efficiency Bar, as a feature

B
of the wage scales, should be removed. The dearness allowance, it
was claimed, should be granted on a slab system. The claim of the
Union was resisted by the appellant, who maintained that the existing
..
wage scales were fair and reasonable on a region-cum-industry basis
and that it would not be possible for the appellant to bear the addi-
tional financial burden if the demands of the Union were accepted.
Reference was made to the political uncertainty in Iran which had
c placed an appreciable part of the appellant's business in jeopardy and
to various other factors, peculiar to an engineering consultancy busi-
ness, beyond the appellant's control There was fierce· competition
also, it was asserted, from other similar organisations.

D The appellant had introduced various pay scales in 1973 and some
time later they were revised. There was no separate dearness allow-
ance until January, 1977 when it was introduced for the first time.
House rent allowance was also paid. Dearness allowance became>
payable at 10% of the basic wage subject to a minimum of Rs. 50/-
and house rent allowance at 30% of the basic salary. Nothing those
E facts, the Tribunal observed that compared with the increased paying
capacity of the appellant, an inference drawn from the prosperity enjoy-
ed by the appellant over the years, there was definite need for revis-
ing the wage scales. It was pointed out that the dearness allowance
and house rent allowance granted by the appellant made little impact
in neutralising the cost of living. The need for revising the wage
F scales was not disputed by the appellant. In proceeding to revise the
wage structure the Tribunal took into account the two principles in- j
..,
G
volved in the process, the financial capacity of the industry to bear the
burden of an increased wage bill, and the prevailing wage structure on
an industry-cum-regi0n basis. Wage scale statements were filed
by the parties before the Tribunal pertaining to several engineer-
ing consultancy organisations but in the absence of pertinent informa-
.
"'
I-

tion concerning the strength of their labour force, the extent of their •
business, the financial position for some years, the capital invested,
the precise nature of the business, the position regarding reserves, ~
dividends declared and future prospects of the company, the Tribunal
H
found that it was unable to rely on them as comparable concerns.
Holding it impossible in the circumstances to apply the principle of
•
industry-cum-region basis, the Tribunal turned to a consideration of
the financial capacity of the company to bear an additional burden.
TATA CONSULTING ENGINEERS v. WORKME;N (Pathak J.) I 71

fn this connection, it proceeded on the footing that the appellant was A
a separate and independent division of Tata Sons Limited and had no
"functional integrality" with the other .divisions. Having regard tcJ
the net profits earned by the appellant from 1968 to 1977 it found
that the acceptance of the demands of the. Union would result in an
increased burden of Rs. 7 crores, a burden which would dry up the
appellant's resources and would be impossible for it to bear. The B
Union modified its demands but even the modified terms, according to
the Tribunal, appeared to be on the high side inasmuch as the result-
ing total burden of Rs. 1. 70 crores was much higher than the average
profits could sustain. The particular character of the appellant, tha~
it was a· service industry and not a manufacturing concern, was taken
into account and it was observed that unlike a manufacturing business
c
there was little scope for diversification in the case of an engineering!
consultllncy,, Nonetheless, the Tribunal obseyved, ther~ was eveey
reason to expect that the appellant would be able to earn sound pro-
fits in the future, and the instability in its business activities occasioned
by the turbulent political situation in Iran, would be, it was expected, D
compensated by contracts secured in different developing countries.
For the purpose of determining the financial capacity of the appellant,
the Tribunal followed Unichem Laboratories v. Their Workmen(')
where it was held that the gross profits should be computed without
maiking deductions on account of taxation, development rebate and
depreciation. It decided also that there was no ground for deductin,i?l
the notional value of gratuity. Revising the figures on that basis, it
computed the annual gross profits for the years! 1968 to 19n and
determined the annual average at Rs. 26.69 lakhs.
The Tribunal took note of the elaborate scales of wages already
existing in the wage structure of the appellant and decided "to modify F
the existing structure of the scales with flat increases in each cate-
gory." It also observed that the category of Draughtsmen needed a
special increase. But it rejected the demand of the Union for dear-
ness allowance on the basis of a slab system, because that would have
, imposed an unacceptable burden on the appellant's financial capacity
and thi:re was no reason why the~existing scheme of dearness allow-
G
ance should be disturbed when a substantial increase was being made
in the level of the basic wage. Taking into account the circumstance
that besides the staff of 306 workmen represented by the Union there
were several other employees who would also have to be paid, the Tri-
bunal considered it fair, in paragraph 23 of the award, to give a flat
increase of Rs. 150/- in the category of Draughtsmen and Rs. 100/- R
in the case of other categories. It rejected the demand of the Union
(I) [1972] I L.L.J. 576.
12-1281SCI/80
Ii2 SUPREME COURT REPORTS [198!] 2 S.C.R.

A for abolishing the Efficien~y Bar, but the span cif 15 years for oorningi
increment was expanded in some grades to 20 years and some adjust-
ments were also made in specific grades. The Tribunal also noted that
after the salllries of the employees had been fixed in the respective
scales, senior employees would have to be given some more incrern~'llt~
in the new scales according to their completed years of service. Taking >
B all these factors into consideration, it made an award dated 20th
December, 1978 prescribing the following revision in the existing scales1
of wages:

Grade & Category Existing Grade/Scale. Revised Grade/
Scale
c
I Peon/Helpor/Sweeper Rs. 250-10-300-EB- Rs. 350-10-450-15-
10-400. 600.
II Driver/Asst!. House-keeper/ Rs. 300-10-420-EB- Rs. 400-15-520-20-
Caretaker. 15-540. 660-EB-25-785.

D III Jr. Clerk-cum.-Typist/Jr. Steno/ Rs. 350-15-425-EB- Rs. 450-20-550-25-
Tel. Optr./Receptionist/Asstt. 20-625-EB-25-725. 800-EB-30-950.
Record Keeper/Yeh. Mechanic/
Jr. Librarian. '
IV Sr. Clerk/Steno/Record Keeper/ Rs. 450-20-530-EB- Rs. 550-25-675-30-
Tix. Operator/Xerox Operator. 30-860-EB-35-IOOO. 975-EB-40-1175.
V Office Asstt./Lib. Asstt./ Cost Rs. 590-30-740-EB- Rs. 690-35-865-40-
E 35-1020-EB-40-1300 1265-EB-45-1490.
Asstt./Administrative Asstt./
Personnel Asstt./Comm. Asstt./
Canteen Asstt.
VI Draughtsman/Site Supervisor/ Rs. 380-30-620-40- Rs. 530-40-730-50-
Surveyor/(Diploma Holder). 1020-EB-50-1320. 1230-EB-60-1530.
VII Junior Architect Rs. 760-40-1000-50- Rs. 860-50-1160-60-
F (Engineering Graduate) 1300. 1700.
VIII Sr. Draughtsman (Diploma
Holder)
Rs. 1000-50-1300-60- Rs. 1100-60-1340-70-
1600-7S-1750. 1690-80-2010.

The Tribunal maintained the existing schemes of dearness allow-
-..
ance and house rent allowance, and observed that in vi~w of the revi-
G sed basic wages there would be a resultant increase in the dearness
allowance and house rent allowance.
The revised wage scales, the Tribunal directed, should take effect
retrospectively from 1st January, 1976. It also laid down th~ princi-
ple enabling the actual fitment of the workmen in their respective
H wage scales as on that date and also provided for the number of incre-
ments to which they would be entitled having regard to the period
of completed service.
TATA CONSULTING ENGINEERS v. WORKME,N (Pathak J.) 173

Two days after the award was made, an application was made by A
the Union stating :
"In the said award, your Honour has observed, at the
end of para 22, "In view of the increase that is, being allowed
in the basic pa,y, I do not propose to revise the existing
scheme of Dearness Allowance." Further, it appears that B'
the Tribunal intended to grant the increase of Rs. 150/- to
1
each draughtsman and Rs. 100/- to all other workmen in
their basic pay. However, this is not clearly mentioned
anywhere in the award due to accidental slip or omission."
~The Union prayed that the position may be clarified and the award c
corrected accordingly. On the same date, the Tribunal disposed o~
the application by the following order :
"There can be no doubt that a flat increase of Rs. 150/-
to each of the employees in the category of Draftsmen and
of Rs. 100/- to each employee in the other categories has
been granted under my award. The same has been made D
clear in paragraph No. 23, but it appears that the words "to
eacl1 employee" after the figure "Rs. 150/-" were omitted.
Similarly, the same words "to each employee" after the figure
"100" were omitted. When the award is sent for publica-
tion, a necessary corrigendum be made in the award and
the aforesaid words after the figures1 Rs. 150/- and Rs. l 00/- E
be added. It may be mentioned that only from that
point of view viz. to grant fiat increase of Rs. 150/- and of
Rs. 100/- to the empl9yees in the category of Draftsmen
and the other categories respectively that a burden state-
ment was called for from the company and the same was
submitted (vide Ex. C-51). The fitment has also to be F
done only after the fiat increase is added to the present
basic salary of each employee. I do not think that any
problem would oarise for interpretation of the award. Since
the award has been already signed, I do not think anything
further can be added to this award.
G

sd/- K. N. Wani
• INDUSTRIAL TRIBUNAL."

In this appeal, the learned counsel for the appellant had covered
a wide field, but in the end he stoates that the appellant is aggrieved H
by two matters only. One is the retrospectivity attached to the revis-
ed wage scales, and the other is the fiat increase given to each

-----~~ ---
174 SUPREME COURT REPORTS [1981] 2 S.C.R.

A employee of Rs. 150/- in the category of Draughtsmen and Rs. 100/-
in other· categories resulting from the order dated 22nd December,
1978.
The workmen have filed an appeal by special leave, Civil Appeal
No. 2300 of 1979, in which they have challenged the rejection by the
B Tribunal of their claim in respect of dearness allowance which, they
contend, should be pegged to the cost of living index and should not
be a fixed amount.
Considering the appeal of Tata. Consulting Engineers first, the
contention of learned counsel for the appellant is that having rega"
c to the financial capacity of the appellant the Tribunal erred in making ,
the wage scales retrospective and, in any event, in ranging the retros-
pectivity back to 1st January, 1976. We have been taken through
some of the material on the record in the attempt to support the
contention, but after giving careful thought to the matter, I think
there is ample justification for what the Tribunal did. It must be re-
D membered that although the wage scales were introduced as long agd
as 1973 they were maintained at that level except for a >light revision
some time thereafter. No dearness allowance was paid until the
beginning of 1977 and the house rent allowance also was introduced
about that time. The cost of living had gone on increasing from 1972
onwards and, as the Tribunal has found, the dearness allowance!
E and house rent allowance made no appreciable impact in neutralising!
the increasing cost. During all these years, the appellant had conti-
nued to enjoy increasing profits; nonetheless the emoluments received
by the workmen did not receive the impress of the appellant's growingi
prosperity. The Charter of Demands was presented by the Union in
July, 1974 and when conciliation proceedings fuiled the State Go-
F vernment made the reference to the Industrial Tribunal in 1975. The
Tribunal has referred to various 'considerations which prevailed with..J
it in giving retrospectivity to the revised pay scales. They are consi•
derations which cannot be ignored. Accordingly, the contention
raised on behalf of the appellant against retrospectivity of the wage
scales must be rejected.
G
The challenge embodied in the second contention against the
amendment of the award is more serious. It is urged that the amend-
ment results in the inclusion of a flat increase of Rs. 150/- to each •
workman in the case of Draughtsman and Rs. 100 /- to each work-
man in the case of othclr categories, a result wholly unwarranted, it
H is said, by the intent of the original award and, therefore, falling be-
yond the jurisdiction of the Tribunal. In making the application of
22nd December, 1978, the Union invoked the jurisdiction of the
TATA CONSULTING ENGINEERS v. WORKMEN (Pathak J.) 17 5

Tribunal under rule 31 of the Industrial Disputes (Bombay) Rules, A
1957. Rule 31 provides:
"3 l. The Labour Court, Tribunal or Arbitrator may
correct any clerical mistake or error arising from an acci-
dental slip or omission in any award it or he issues."
The jurisdiction given to the Tribunal by rule 31 is closely circums-
B
cribed. It is only 11 clerical mistake or error which c.-an be corrected,
and the clerical mistake or error must arise from an accidental slip or
omission in the award. An 11ecidental slip or omission implies that.
something was intended and contrary to that intention wlrat should
~t have been included has be~n included or what should have been
included has been omitted. It must be a mistake or error amenable
to clerical correction only. It must not be a mistake or error which
c
calls for rectification by modification of the conscious adjudication;
on the issues involved.
Is the instant case one where the amendmept made by the Tribunal
in the original award can be said to correct a mere clerical mistake
or error arising from an acciden!'al slip or omission? To answer the D
question, it is necessary to examine the basis of the award a.nd the
intent which flows from that basis. The terms of reference in the
State Qovernment's order required the Tribunal to revise the scales
of pay and dearness allowance, and there was no mention of givingi
any ad hoc increase in the basic pay of individual workman. It would
do well to recall that the claim of the Union filed before the Tribunal E
also centred on the nee.d to revise the wage scales. Thut was the
main issue between the parties. It is to the task of revising the pay
scales that the Tribunal addressed itself, and throughout the material
part ·Of the award it is that msk which held its focussed attention.
The financial capacity of the appellant, and the related study of its
annual profits from 1968 to 1977, were examined from that view F
~int. The sufficien_cy of the existing pay scales was considered in
detail, and regard was had to their original structure and the accre-
.. tions made subsequently by way of dearness allowance and house
rent allowance. For the purpose of restructuring the P'ay scales the
Tribunal ruled on the paying capacity of the appellant, both with
G
reference to the profits of the preceding year as well as the prospects
of the future. The finandal capacity, as the Tribunal observed,
constituted one of "the principles which are required to be followed
in the fixation of the wage structure." A clear statement of its inten~
tion is found iri paragraph 22 of the award, where the Tribunal
stated : H
"I only propose to modify the existing structures of
the scales with flat increases in each category."
176 SUPREME COURT REPORTS [1981] 2 S.C.R.

A No ad hoc increase to the paY of each individual workman was intend-
ed. And that is confirmed by what was stated in paragraph 23 of
the award:

"Considering this outgoing the flat increase of Rs. 150/-
in the category of Draughtsman and Rs. 100/- in the case
B of the other categories would be fair."

It will be noted that the pay scales of different categories were being
restructured, and the flat increase envisaged there related to an increase
in the general pay scales of different categories. Individual workmen ~
were not present to the mind of the Tribunal. That the increase was ' ·
c pertinent to the general pay scales in the revised wage structure is
patently clear from a comparison of the existing pay scales and the
revised pay scales. The compara_tive table of existing pay scales and
the revised pay scales has been reproduced earlier. The revised pay
scales of all categories, except the category of Draughtsmen, shows
an increase of Rs. 100/- in the initial pay fixed in each scale, the in-
D crease in the case of the category of Draughtsmen being Rs. 150/-.
There was only one increase contemplated in the award, in para-
graph 23 of award, and it is more than plain that the increase was
the one incorporated in the revised pay scales pertaining to different
categories. No second flat increase was envisaged at all. The amend-
ment made by the Tribunal has the effect of providing a second in•'
E
crease, this time to each individual workmen. If, as the Tribunal hM
stated in the amendment order, the increase in paragraph 23 was
intended to apply to each individual workmen, there is nothing in the
body of the awdrd to form the foundation on which the actual figures
in the restructured pay scales can be made to rest. There will be nq
F explanation why, the initial start of the revised pay scales has been
increased by Rs. 150/- in the case of the category of Draughtsmen
and Rs. 100/- in the case of other categories. Considering the fitment ~
of the workmen in the revised scales, it was stated in the award that a
workman found drawing a salary less than the beginning of the grade
would be stepped up to the beginning of the grade and if his pay fell
G between two steps in the reclassified pay scales the basic pay was to
be fixed at the step higher in the revised scale. Conspicuous by its
absence is any reference to a fiat increase in the pay of an individual
workmen. Even when considering the range of permissible retros-
pectivity the Tribunal stated in the award :

H "In view of the revision of the wage scales, there would
be consequent increase in the dearness allowance and the
house rent allowance."
TATA CONSULTING ENGINEERS v. WORKMEN (Pathak!.) 177

And the clinching circumstances of all is that the award was made A
on the basis that the overall financial load according to paragraph 33
·of the award would be to the tune of about Rs. 5 htkhs. It was that
figure which the Tribunal had in mind against the backdrop of_ the
gr<M>s annual figures when it made the revised pay scales retrospective
from !st January, 1976. This liability taken with the liability accru-
ing on the need to increase the salaries of the other staff determined B
the Tribunal's deliberations in regard to the several fea.tures of the

. .<
award, including the grant of increments rellited to completed periods
of ~ervice, the expansion of the span from 15 years to 20 years' for
earning increments, and other benefits. It cannot be the case oi the
Union that the figure of Rs. 5 lakhs mentioned in paragraph 33 o~
the award represented the result of adding a flat increase to the pay c
of each workman in addition to the benefits .conferred by the revised
pay scales and other awarded reliefs. ·
In its order of 22nd December, 1978, the Tribunal has referred
to the statement (Exhibit C-51) filed by the appellant when called
upon to indicate the increased financial burden apprehended by it. D
The Tribunal has relied on this statement as evidence showing tha~
the appellant knew that a flat increase of Rs. 150/- and Rs. 100/-
was intended to each of the employees in the category of Draughts-
men and the other categories. In so construing the statement, Exhibit
C-51, the Tribunal has grievously erred. It seems from a perusal of
the document, Exhibit C-51, that it is a statement giving trial figures E
of the increased financial load on different bases. On the basis that
a sum of Rs. 150/- per month was added to the pay of each Draughts-
man and a sum of Rs. 100/- was added to the pay of every other
workman, who belonged to the Union staff, the financial load would
increase to Rs. 9,22,032/-. Likewise, if a flat increase of Rs. 100/-
F
was given to individual workmen of all categories, including Draughts-
~ men, the increased financial load would total Rs. 7,64,256/-. The
statement then goes on to indicate that if a flat increase of Rs. 75/-
per month were given to individual workmen of all categ9ries the
toi'al increase would be Rs. 5,78,220/-. Again, if the flat increase
is Rs. 65 /- per month to the individual workmen of all categories, G
the additional load would total Rs. 4,97,772/·. Finally, on the basis
that the individual Draughtsman would be given an increase of Rs.
75/- per month and the individual workmen of other categories Rs.
50/- per month, the additional load was calculated at Rs. 4,63,092/-.
It will be noted that the statement, Exhibit C-51, was prepared on
the basis of the employees' strength as in December, 1971. A similar H
statement was prepared on the basis of the employees' strength as in
Septeriber, 1978. These statements cannot be regarded as evidenctj
178 SUPREME COURT REPORTS [1981] 2 S.C.R.

A that the appefunt was cognizant of the intention of the Tribunal to
provide a fiat increase to the pay of each workman. The statement.
afforded an indication merely of what the additional financial load
would be if a fiat increase was given to the individual workman on
the alternative basis set forth therein. None of the alternatives was
actually adopted by the Tribunal, because when the award was made
B the Tribunal proceeded instead to restructure the wage scales by the
addition of Rs. 150/· in the case of the category of Draughtsmen and
Rs. 100/- in the case of other categories to thf! initial pay in the
wage scales pertaining to those categories. The "addition was integ- •
rated as a feature of the wage scales; it was not regarded as an addi- ·~.
tion to the pay of each individual workman.
c
It seems that the Tribunal was betrayed by a CU!"ious confusion in
accepting the plea of thi Union that ii fiat increase to the pay of each
workman was intended in the original wage and, consequently, it fell
into the error of amending the aw~rd. The evidence contained in the
award throughout provides incontrovertible proof thatl this flat increase
D was never originally intended in the award. The amendment! has, result-
ed in tho Tribunal making, as it were, a supplementary award, whereby
a further relief is being granted beyond that granted in the origimtl
award. The original award was completed and signed by the Tribu-
nal, and it cannot be reopened now except for the lin1ited purpose of
Rule 31. In travelling outside and beyond the terms of the original
E award, the Tribunal has committed a jurisdictional error. Our atten-
tion has been drawn to what purports to be an endorsement by coun-
sel for the appellant on the application dated 22nd December, 1978
filed by the Union before the Tribunal to the effect that the appellant
would submit to whatever the Tribunal decided, and it is urged that
the appellant is bound by the order made on the application. It is
F an accepted principle that consent by a party cannot confer jurisdic-
tion on a court. What is without jurisdiction will remain so. In the
circumstances the order of 22nd December, 1978 is invalid so far as
it amends paragraph 23 of the original award. The corrigendum
amending the award in consequence is liable to be quashed. The
second contention of the appellant is entitled to succeed.
G
I shall now consider Civil Appeal No. 2300 of 1979 filed by the
workmen. The only contention of the workmen is that the Tribunal
should have fixed the dearness allowance in communion with the costi
of living index. It is wrong in principle, it is said, to provide a fixed
dearness allowance. Reliance was placed on The llindustali,
H Times Ltd., New Delhi v. Their Workmen(') where it was
observed by · this Court that dearness allowance should no~
(1) [1964] I S.C.R. 234, 247.
TATA CONSULTING ENGINEERS V, WORKMEN 179
(Chinnappa Reddy !.)
remain fixed at any figure but should be on a sliding scal€l A
in order to neutralise a portion of the increase in the cost
of living. Reference was also' made to Bengal Chemical & Pharmaceu-
tical Works Limited v. Its Workmen(~). Now, it is not a universal
rule that the dearness allowance should in all cases be. correlated with
the cost of living index. The Tribunal, in th~ present case, considered
B
the matter and found it sufficient and in accord with justice that the
wage scales should be restructured with suitable increments provided
therein. It noted that dearness allowance was being granted by the!
a
appellant at 10% of the salary subject to minimum of Rs. 50/· and
~ •· house rent allowance at 30% of the basic salary. Having resard to
the not inconsiderable improvement in the level of the basic wage, it
observed that there would be a consequent increaso in the dearness\
c
allowance and house rent allowance. In view of thC: increase so
secured, the Tribunal rejected the suggestion that a slab system should
be introduced in the dearness allowance or that there should be any
other modification of the principle on which dearness allowance wail
being presently granted. It declared that the cumulative efiect of an D
improved wage structure together with dearnesli.allowa11ce operating on
a slab system would throw an impossibl~ burden of about Rs. 1 crore
on the financial capacity of tho appellant. It W11S open to the Tribunal
to adopt the position which it did. It the dearness allowance is. >Jinked
with the cost of living index th~ whole award will have t<> be reopened
and the entire basis on which it has been made will have to be recon· E
sidered. The· award is a composite document in which the severa]
elements of increased wage scales, larger increments, longer span ot
20 years for earning increments, dearness allowance at 10% of the
basic wage, besides several other benefits, have been integrated into a,
balanced arrangement in keeping with what the Tribunal has found
to be the financial capacity of the appellant. It is not possible to F
' maintain one part of the award and supersede another.
~

Accordingly, the appeal filed by the workmen must fail.
In the result, Civil Appeal No. 2299 of 1979 is allowed in part
insofar that the order dated 22nd December, 1978 of the Industria~ G
Tribunal, Maharashtra Bombay is quashed to the extent that it modi-
fies the original award dated 20th December, 1978, and the corrigen-
dum made consequent thereto is also quashed. Civil Appeal No.
2300 of 1979 is dismissed. There is no order as to costs.

CHINNAPPA REDDY, J. We have had the advantage of perusing H
the judgment prepared by our learned brother Pathak, J. we agree with
(I) [1969] 2 S.C.R. 113.
180 SUPREME COURT REPORTS [1981] 2 s.c.R.

A him that Civil Appeal No. 2300 of 1979 should be dismissed. We
also agree with him that Civil Appeal No. 2299 of 1979 should also
be dismissed iu so far as it relates to the award dated December 20,
1978. However, we do not agree' with our learned brother that Civil
Appeal No. 2299 of 1979 should be allowed iu so far aQ it relates to
the order dated December 22, 1978 of the Industrial Tribunal which
B
purports to correct the award dated December 20, 1978. In our
opinion Civil Appeal No. 2299 of 1979' should be dismissed in its
entirety.
We do not propose to give our reasons to the e.~tent we are iu
agreement with Pathak, J. and we propose to state our reasons for the
C disagreement only.
It is needless to recapitulate all the basic facts which have been
set out in the judgment of Pathak, J. The Award of the Industrial
Tribunal was made on December 20, 1978. On December 22, 1978,
that is to say, two days after the Award was made and when every-
thing must Ii.ave been fresh to the minds of the Tribunal, the respective
D
parties and their Advocates, the, employees Union made, an applicati0!1i
under Rule 31 of the Industrial Disputes (Bombay) Rules, 1957 seek-
ing a correction of an error, which it was claimed, had crept into the
Award. The application was as follows :
"In the above reference yonr honour was pleased to pass
E an award on 20th December, 1978.
In the said award, Your Honour has observed, ·at the
end of Para 22, 'In vie"". of the increase that is being allowed
in the basic pay, I do not propose, to revise the existing
scheme of Dearness Allowance'. Further, it appears that the
Tribunal intended to grant the increase of Rs. 150/- to each
F drnnghtsman and Rs. 100/- to all other workmen in their
basic pay. However, this is not clearly mentioned anywhere
in the award due to accidental slip or omission.
The Union therefore prays the honourable Tribunal to
clarify the position and correct the award accordingly".
G On this application, the Advocate for the employer company made
the following endorsement :
"Submitted to whatever this Hon'ble Tribunal desires to
do".
Thereafter the Tribunal made an order on the same day in the foll~w
H ing terms:
"There can be no doubt that a flat increase of Rs. 1SO/·
to each of the employees in the category of Draftsme~ and
TATA CONSULTING ENGINEERS V. WORKMEN I BI
( Chinnappa Reddy !.)
of Rs. 100/- to each employee in the O'ther categories has A
been granted under my award. The same has been made
clear in paragraph No. 23, but it appears that the words "to
each employee" after the figure "Rs. 150/-" were omitted.
Similarly, the same words "to each employee" after the figure
"100" were omitted. When the award is sent for publica-
tion, a necessary corrigendum be made in the award and the
aforesaid words after the figures Rs. 150/- and Rs. l 00/-
be added. It may be mentioned that only from that point
of view viz. to grant flat increase of Rs. 150/- and of
Rs. 100/- to the employees in the category of Draftsmen and
the other categories respectively that a burden statement was
called for from the company and the same was submitted C·
(vide Ex. C-51). The fitment has also to be done onl)I after
the fiat increase is added to the present basic salary of each
employee. I do not think that any: problem would arise for
· interpretation of the award. Since the award has hem
already signed, ~ do not think anything further can be added D
to this award".

This order was made in the presence of Shri Manak Gagrat, Advocate
for the Company and Shri N. P. Mehta, Advocate for the workmen.
The endorsement made on the application by the Advocate 'for the
company does not indicate that the company had any objection to the E
award being corrected as sought by the employees union. On the
other hand the endorsement reads as if there was tacit agreement on
the part of the Company to the correction sought by the union. The
order dated December 22, 1978 of the Tribunal also does not reveal
that there was any opposition by the company to the application for
correcting the award. Even so we propose to examine whether the F
correction sought by the employees, union was within. th<J bounds of the
authority of the Tribunal or whether it was, in effect, a fresh award.

The primary and basic question considered by the Industrial Tri-
bunal, in making the award dated December 20, 1978 was the ques"
tion a& revision of the wage-scales. Implicit and intrinsically connect- G
ed with the question of revision of the wage-scales were the questions
of fitment of employees into the' wage-scales and flat or ad-hoc increase
of salaries of workmen wherever considered necessary. It. cannot pos-
sibly be doubted that an Industrial Tribunal deciding upon the wage-
scales of the employees of an establishment would have full liberty to
propose ad-hoc increase of salaries as part of the revision of wages. ff
Nor can it be doubted that fitment int() the revised pay scales' is cer-
tainly a part of the revision of pay scales. This in our opinion is
182 SUPREME COURT REPORTS [1981] 2 S.C.R.

elementat:y and fundamental to the jurisdiction of the Industrial Tribu-
nal in revising wage-scales.

In the present case the Industrial Tribunal on a consideration of
the material placed before it came to the conclusion that the company
B was in an ur.doubted position to bear the additional financial burden.
At the encl of paragraph 15 of the Award, the Tribunal stated : "But
there can be no doubt that the company can very well bear the addi-
tional burden. The question is what should be the extent of such a
burden?" At the end of paragraph 18 of the award the 'Tribunal
said: "A mere reading of Exhibit U-15 will immediately dispel thtj
c mis-givings about the future of the present company. For some years
to come this is likely to be one of the few Consulting Engineers who
will be securing major contracts". Again in Paragraph 19 it was said:
"I have no doubt that the present Company would be able to bear the
additional burden for the years to come. This is further borne out
from the trading results of the Company for the, year 1968-69 to 1977.
D
The profits have increased all along. The copy of the letter datecJ·
July 23, 1973, alongwith the Annexures from the Company to the
Director General, Posts & Telegraphs, Delhi (Ex. C-27) indicates the
important projects the Company was handling in India and abroad,
and the amount of foreign exchange earned and repatriated. I will;
E therefore, proceed on the ground that the present Company can bear
the additional financial burden". Finally at the end of paragraph 21
the Tribunal said : "In view of thi~ position, the Company can easily
bear some burden that might fall as a result of the upward revision of
the wage-scales. The question is to what extent the relief should be
giveu to the employees ?"
F
After expressing himself in categoric terms about the capacity of ·-.f
the company to bear the additional financia~ burden, the Tribunal went
on to say : "I only propose to modify the existing 5tructure of the
scales with flat increases in each category". The Tribunal then con-
G sidered the question whether Draftsmen should get a higher flat in-
crease and the question whether the existing scheme of Dearness
Allowance should be revised. The Tribunal then observed : " ..... .
the flat increase of Rs. 150/- in the category of Draftsmen and
Rs. 100/- in the case of the other categories would be fair''. There-
after various other matters were considered and finally the Tribunal
H revised the wage scales in the manner already mentioned by my
brother Pathak, J. The question of "Fitment" was then considered
in the following manner :
TATA CONSULTING ENGINEERS V. WORKMEN 183
(Chinnappa Reddy, J.)
A
"34. Fitment : -
If as on !st January, 1976, an employee is drawing a·
salary less than the beginning of the respective grade, he
should be first stepped up to the beginning of the grade. If
the pay of an employee does not coincide with any step in
the revised pay scale, and falls between two steps in the re- B
classified pay scales, the basic pay of that employee! shall be
fixed at the step higher in the revised scale.
35. After fixing the salary of the employees in the scales
as above, the employees should be given increments1 in, the
new scales as noted below : - c
(i) Employees who have completed 5 years or. more as
on 1st January, 1976, 3, increments.
(ii) Employees who have completed 4 years of service as
on !st January, 1976, 2 increments.
(iii) All other employees with more than one year's ser- D
vice shall be given one increment".
Now, if, without any flat or ad hoc increase of salary, the workmen
were to be fitted into the revised scales of pay, it would obviously
result in •erious anomalous situations. In the case of several senior
employees, the revised scale would yield but a very small and almost
E
a token increase in the size of the pay packet whereas the junior
employees would get a large benefit. While workmen raising indus-
trial disputes for revision of wage-scales are certainly minded about
their future prospects in the matter of wages, they, surely would be
more concerned with the immediate benefits accrning to them That was
why the Industrial Tribunal thooght that an all round !lat increase of F
Rs. 150/- in the case of Draftsmen and Rs. 100/- in the case of other
workmen was called for. It was clearly so intended by the Tribunal
as is evident from the reference to "flat increase of Rs. 150/~ in the,
category of Draftsmen and Rs. 100/- in the case of the other ca;tego-
ries''. Since there was to be a' flat increase of Rs. 150/- and Rs. 100/-
in the case of draftsmen and other workmen respectively, the revised G
•
wage scale had necessarily to commence with fignres Rs. 150/- and
Rs. 100/- above the existing wage scales. Immediately after the
award was pronounced, while the iron was still hot as it were, the
employees apparently realised that the employer might take advantage
of the circumstance that it was not clearly mentioned in, the award that
all the employees were to get additional pay of Rs. 150/- and Rs. 100/• II
respectively and might contend that the Tribunal had only revised the
wage scales by increasing the salary on entry into the service and res-
184 SUPREME COURT REPORTS [1981] 2 S.C.R.

A tructuring the scale of pay and never granted any ad hoc increase of
salary to all employees. Therefore, they filed an application before
the Tribunal for correcting the award so as to bring out what was
intended. As it has now turned out what the employees apparently
suspected the employer might contend, is precisely what the employer
is not contending, though the employer did not choose to so contend
B before the Industrial Tribunal itself when the employees filed the appli-
cation for rectification. The application before the Tribunal was filed
under Rule 31 of the Bombay Industrial Disputes Rules 1957, which
is as follows :
"A Bqard, Court, Labour Court, Tribunal or Arbitrator
c may, at any time, suo moto or on an application made by
any of the parties concerned, may correct any clerical mis-
take or· error arising from an accidental slip or omission: in
any proceedings, report, award or as the case may be,
decision".
The omission of the words to each employee first after the figure
D
Rs. 150/- and again after the figure Rs. 100/- was clearly an acciden-
tal slip oc omission which the Tribunal was entitled to correct. We
are unable to see how it can be held to be otherwise. We ar~ · not
impressed with the submission of the learned counsel for the Company
that the corrigendum was in effect a fresh award'. We, therefore, see
E no ground for quashing the order dated December 22, 1978 of the
Tribunal. The result of the foregoing discussion is that Civil Appeal
No. 2299 of 1979 has to he dismissed in its entirety.
We have already indicated that we agree with our brother Pathak,
J., 'that the appeal (Civil Appeal No. 2300 of 1979) filed by the
workmen should also be dismissed. While we find lot of force in the
F submission of Shri V. M. Tarkunde, learned counsel for the workmeri
that Dearness Allowance Jinked to cost of living index is ordinarily
the best and the most scientific method of computing dearnes~ allow-
ance, it cannot always be said that au illegality warranting interference
under Article 136 is committed if some other method is' adopted. The
G Tribunal has given satisfactory reason for adopting a different model
and we are not disposed to interfere with the award of the; Tribunal.
In the result both the appeals are dismissed without any order as to
costs.
ORDER
In view of the opinion of the majority both the appeals are dismissed
H and there is no order as to costs.

S.R. Appeals dismissed.