TMI Blog1976 (12) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... ces before the Industrial Court, Gujarat, being References Nos. 406, 407, 408, 409 and 421 of 1973. The rate of D.A. for the employees in the cotton textile industry in Ahmedabad had earlier been fixed by an award of an Industrial Tribunal which will be referred to hereinafter as the Ahmedabad Rate. The prevalent D.A. in 1973 in the mills with which we are concerned was 90% of the Ahmedabad Rate. The union was raising the aforesaid disputes for increasing the D.A. to 100% of the Ahmedabad Rate with effect from October 1, 1972. Hence, the above references were pending before the Industrial Court. As a result of negotiations between the parties during the pendency of the said disputes before the Industrial Court D.A. was agreed to be paid at the rate of 95% of the Ahmedabad Rate of D.A. with effect from January 1, 1974, as will appear from an interim award of the Industrial Court dated June 21, 1974. Thereafter, by further negotiations the disputes regarding D A. were finally resolved by the mills and the union entering into a settlement on June 28, 1974, by fixing D.A. at 100% of the Ahmedabad Rate with effect from January 1, 1974. Awards were later made by the court in conformit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest at 2 1/2% over and above the Bank deposit rate. Before we proceed further we may note some of the provisions of the Act material for our purpose : By section 2(a) of the Act, " appointed day " means the " 6th day of July, 1974 By section 2(b) " 'additional dearness allowance' means such dearness allowance as may be sanctioned from time to time, after the appointed day, over and above the amount of dearness allowance payable in accordance with the rate in force immediately before the date from which such sanction of additional dearness allowance is to take effect. " By section 2(e) " 'dearness allowance' means all cash payments, by whatever name called, made to an employee on account of rise in the cost of living ". Under section 2(g) emoluments' include wages and dearness allowance ". Under section 5 every specified authority (herein the employer) shall open two separate accounts, namely, the Additional Wages Deposit Account and the Additional Dearness Allowance Deposit Account. The employer shall open a separate ledger account in the name of each employee. Section 6(2)(b) of the Act enjoins on the employer a duty to make deductions and to remit to the nominat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for future deductions of additional D.A., after 6th July, 1974, the appellants claim that the Workers should be treated as if they were in receipt of D.A., prior to the appointed day, at 95% of the Ahmedabad Rate which had been in force in terms of the interim award of 21st June, 1974, which is the earlier sanction for the 95% rate. Hence, 2 1/2% (that is, 50% of 5% being the difference between 95% and 100%) of the same will be liable for deduction under the Act from 6th July, 1974. According to the appellants, the benefit of 100% was available only after the making of the awards which was, thus, sanctioned after the appointed day notwithstanding the fact that the settlement had been entered upon on 28th Jane, 1974. Section 2(b) will, therefore, be clearly attracted, according to the appellants. It is submitted by the appellants that the word " sanctioned " in the definition of 'additional dearness allowance' under section 2(b) is very significant. It is contended that the settlement during the pendency of an industrial dispute before the Industrial Court has to be approved by the court before it can be said to be sanctioned within the meaning of the provisions of section 2(b). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were in terms of the settlement which had retrospective operation from January 1, 1974. Since the settlement has merged in the awards the terms of the awards are those specified in the settlement. It is those dates which are, therefore, specified in the awards and, under section 75 of the Bombay Industrial Relations Act, the awards came into operation with effect from January 1, 1974. The sanction of the awards in such a case is the sanction under the settlement and since the settlement was prior to July 6, 1974, the additional D. A. cannot be said to be sanctioned after the appointed day. 100% of the Ahmedabad Rate of D.A. will be payable to the workers with effect from January 1, 1974, and the sanction for that rise was on 28th June, 1974, the date of the settlement which was prior to the appointed day. Sanction must have relevance to the reality of the transaction between the parties. The settlement of 28th June, 1974, makes the increased D.A. of 100% payable with effect from January 1, 1974. Hence, the said rate of increased D. A. which was payable to the workers between January 1, 1974, and July 5, 1974, was sanctioned prior to the appointed day. We have already ..... X X X X Extracts X X X X X X X X Extracts X X X X
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