M/s Shivam Foods vs Vijay Vasudeo Dhoble & Ors.

Since both the petitions are in the nature of cross-petitions, inasmuch as the award impugned in both petitions is one and the same, both the petitions are being decided by way of this common judgment.

Heard. Rule. Rule made returnable forthwith. Heard finally with the consent of learned counsels appearing for the parties.

As far as Writ Petition No.2157 of 2026 is concerned, the petitioner herein is the employer, while in Writ Petition No.5224 of 2026 is concerned, the writ petition is filed at the behest of the employees (elected representatives).

The facts, as can be seen from the petitions, are as under :

Both petitions challenge the Award dated 30^th August 2025, passed in Reference (IT) No. 01 of 2021, by the Industrial Court, Nagpur. By this Award, the Industrial Court has revised wages and dearness allowance as far as the employees are concerned.

On 9^th January, 2017, the State Government in exercise of powers under the Minimum Wages Act, 1948 issued a notification revising minimum rates of wages for scheduled employment including "Employment in Bakeries", and specific basic rates of wages as well as cost of living allowance. Thereafter, on 7^th November, 2017, a wage agreement was executed between the management and the employees represented by their elected representatives governing the wages and other conditions of service. The duration of the said agreement was till 31^st March 2019.

On 4^th April 2019, upon expiry of the term of the earlier wage settlement, the employees' representative gave a notice of change in prescribed Form 'L' under Section 42(2) of the Maharashtra Industrial Relations (MIR) Act, 1946 (hereinafter referred to as, ‘the Said Act’) and submitted a charter of demands seeking revision of wages for the period from 1^st April 2019 to 31^st March 2021. However, since there was no agreement, the employees issued a notice under Section 52(2) of the said Act for initiating conciliation on their charter of demands. However, no settlement could be reached before the Conciliation Officer and accordingly, a failure report was submitted on 26^th August 2019. Thereafter, on 18^th December, 2020, the State Government, in exercise of powers under Section 73 of the said Act, referred the charter of demands for adjudication to the Industrial Court, Nagpur. On 22^nd June, 2021, the employees submitted their statement of claim in justification of their demands. On 9^th September 2021, the management of the petitioner firm filed a written statement opposing the demands.

In the proceedings which ensued, the employees led evidence of one of their office representatives, and the said employee was cross-examined. Evidence was also led on behalf of the petitioner management of its General Manager by filing an affidavit on 4^th October 2024.

During the pendency of this reference, the employees submitted a fresh charter of demands for subsequent years i.e., from 1^st April 2021 to 31^st March 2023. A similar charter of demands was raised for a subsequent period from 1^st April 2023 to 31^st March 2025. Both the said references are still pending.

On 30^th August 2025, the Industrial Court partly answered the reference in the affirmative and directed the petitioner employer to increase the dearness allowance paid to the employees with effect from 28^th March 2019 as per the “Consumer Price Index (India)” prevailing on 28^th March 2019 and thereafter from time to time. Various other directions were also given in the impugned award. The said award is challenged in the present petitions.

I have heard Mr. H.V. Thakur, learned counsel for the petitioner and Mr. R.N. Deshpande, learned counsel for respondent Nos. 1 to 5.

Mr. H.V. Thakur, learned counsel for the petitioner contends that the Award of the Industrial Court is completely erroneous inasmuch as it directs an arbitrary increase in the dearness allowance and basic pay by 25% as well as an increase in M.T.C. allowance. He submits that the said directions were given without taking into consideration the relevant factors and parameters of the "industry-cum-region" formula recognized in law for fixation/revision of wages. He further submits that the Industrial Court has erred in failing to consider the financial capacity of the petitioner/employer in its true perspective to bear the liability toward the wage rise in the current financial condition as well as its future business prospects and needs.

It is his submission that it was never in dispute that the dearness allowance as notified by the State Government under the provisions of the Minimum Wages Act was being paid and received by the employees. Furthermore, the employees had not raised any demand for an increase in dearness allowance based on the Consumer Price Index, and therefore, the award is unsustainable in law. He points me out various grounds raised in the petition to show that the award is erroneous on various fronts.

He places reliance on the judgment of the Hon'ble Apex Court reported in AIR 1964 SC 689 (Greaves Cotton & Co. Ltd. v. Workmen employed by the Appellants), to draw home a point that the industry-cum-region formula is the basis for fixing wages and dearness allowance and has made comparison with concerns which are not comparable. It is further stated that the Tribunal has relied more on the region aspect of the industry-cum-region formula and not on the industry aspect when dealing with clerical and subordinate staff. In the said judgment by relying on the earlier judgment in Hindustan Motors Vs. Hindusthan Motors (1962 (2) Labour Law Journal 352), it is submitted that the Hon'ble Apex Court has observed that it was ordinarily desirable to have as much uniformity as possible in the wage scales of different concerns of the same industry working in the same region, as this puts similar industries more or less on the equal footing in their production struggle. In the said judgment it is also observed that the basis of fixation of wages and dearness allowance is industry-cum-region and applying the said formula for fixing wage-scales the Tribunal should lay stress on the industry part of the formula if there are a large number of concerns in the same region carrying on the same industry; in such a case in order that production cost may not be unequal and there may be equal competition, wages should generally be fixed on the basis of the comparable industries, namely, industries of the same kind. But where the number of industries of the same kind in a particular region is small it is the region part of the industry-cum-region formula which assumes importance.

He also places reliance on judgment of the Hon'ble Apex Court reported in (2004) 10 SCC 460 (Mukand Ltd. v. Mukand Staff & Officers' Association), wherein also the same principle is reiterated. He has also placed reliance on a judgment of this Court in Diffusion Engineering Limited Vs. Prithviraj Patle and Others (2019 (5) Bom. Case Reporter 586), wherein it is categorically held in para 9 that while dealing with aspect of comparable concerns and more particularly the comparable charactor of industrial undertakings, the adjudication should not rely only upon oral evidence. The question has to be considered in light of the material facts and circumstances that are generally proved by documentary evidence. It is further held that the questions regarding total capital invested in the concern, the extent of its business the nature of profit made cannot be merely decided on the basis of interested testimony either of the workman or of the employer and his witness. This Court in the judgment of Diffusion Engineering remanded the matter to the Industrial Court again.

Reliance is also placed on a judgment of the Hon'ble Apex Court reported in (1975) 4 SCC 357 (Sangam Press Ltd. v. Workmen), to state that the question of capacity of the employer to pay is irrelevant in the case of minimum wage, the matter of a fair wage however stands on a different footing. In case of a fair wage, besides the principle of industry cum region the company’s capacity to bear the financial burden must receive due consideration. The past performances of the company and the future prospectus with a totality of the picture must be present in the mind of the adjudicator in deciding a dispute of this nature. Thus, it is the submission of Mr. Thakur, learned counsel for the petitioner/employer that no such exercise seems to have been done by the Court while passing the impugned award. He, therefore, submits that the Award is, therefore, infirm in law and liable to be quashed and set aside by this Court in writ jurisdiction.

Per contra, Mr. Deshpande, learned counsel, however, justifies the Award but also states that he has also challenged the same in Writ Petition No.5224 of 2026. He submits that the Award could not have been answered partly in the affirmative and it should have allowed in its entirety. He submits that the Award, therefore, is unsustainable to that extent.

I have considered the contentions canvassed by the learned counsel for the respective parties. In para 143 of the award, the Industrial Court has dealt with various cross-examination of the witness of party No. 2 (i.e. the employees). In the said matter he has held that the witness has admitted that the employees are receiving wages as per the Minimum Wages Act. The said para also deals with the cross-examination of the witness of party No. 1 (i.e. employer/petitioner herein), who has admitted in the cross-examination that since 2018, the basic, HRA, washing allowance of the employees is not increased. He has also admitted that dearness allowance increases because of rising cost of living. Thus, various admissions are also discussed in the said para. Reliance is also placed in the para on Indian Price Index prevailing on 28.03.2019, and the Award has answered in the affirmative partly.

It has been rightly submitted by Mr. Thakur that the Award records a finding that the employer can be directed to increase Dearness Allowance with effect from 28.03.2019 as per Consumer Price Index (India) prevailing on the said date, and thereafter from time to time, and to increase basic pay of party No.2 by 25% of the basic pay as on 30^th October 2025. It is his submission that there is no such industrial practice to pay double the allowance. Furthermore, he submits that there are no reasons mentioned by the Industrial Court for recording such a finding. He submits that indirectly, if there is an effect on the basic pay, that would also amount to an increase in all allowances proportionately. I find considerable force in the submissions made by the learned counsel for the petitioner.

Furthermore, after going through the record of the matter, I find that no such exercise as has been contemplated by the judgments referred to supra has been undertaken by the Industrial Court. There is no reason, much less a justifiable one, to accede to demand No.2, which pertains to increase the rate of basic wage and dearness allowance to the extent of 50%. As there is no justifiable reason, in my considered opinion, it would be proper to relegate the matter to the Industrial Court for fresh adjudication on merits in view of the authoritative pronouncements discussed by me in the preceding paras.

The Industrial Court in my considered opinion has lost sight of the fact that the petitioner/employer has already paid the dearness allowance from April 2019 to March 2021 and is continuing to pay special allowance as notified by the State Government. Moreover, the Industrial Court has overlooked the fact that there was no specific demand for the same.

The Industrial Court has completely lost sight of the concept of minimum wages, fair wages and living wages. The power to fix minimum wages is exclusively conferred upon the State Government and the Industrial Court has usurped the said powers, while deciding the reference. The consideration of the balance sheets of the employer in the award impugned is, to say the least slipshod and lacking in details.

Further, the Industrial Court has not undertaken an enquiry as to similar industrial concern in adjoining or other region in State having similar economic conditions.

Taking overall view of the matter, I have reached to a conclusion that the award is erroneous since it failed to undertake various exercises as laid down by the Hon’ble Apex Court and this Court in various judgments referred by me supra.

In that view of the matter, the following order is passed: