Full Judgment Text
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PETITIONER:
WORKMEN
Vs.
RESPONDENT:
MANAGEMENT OF DUNLOP RUBBER COMPANY OF INDIA LIMITED
DATE OF JUDGMENT04/05/1973
BENCH:
VAIDYIALINGAM, C.A.
BENCH:
VAIDYIALINGAM, C.A.
GROVER, A.N.
CITATION:
1973 AIR 2394 1974 SCR (1) 228
1973 SCC (2) 492
ACT:
Industrial dispute-Claim for additional bonus-’Extraneous
profit’-Return on share premium-Rehabilitation claim-When
may not be included in profits Reserves used as working
capital-Mode of proof of.
HEADNOTE:
For the years 1962 and 1963 the appellants-workmen demanded
additional bonus of three months’ basic wages. The
tribunal, to which, the industrial dispute was referred on a
consideration of the materials placed before it by both the
parties, accepted the case of the respondent-management,
regarding certain deductions made from the profits. and held
that the bonus already paid to the workmen was sufficient
and that they were not entitled to any additional bonus for
those two years.
Dismissing the appeal to this Court.
HELD : (i) The commission and royalties received from
Dunlop, U.K., for the two years were rightly not included by
the respondent in its profits, because, the evidence
established that the circumstances under which the
respondent earned the amounts showed that appellants had not
made any ,contribution of work or labour for earning those
amounts. It accrued to the respondent as extraneous income.
[233D-F]
Workmen of M/s Hindustan Motors Ltd. v. M/s Hindustan Motors
Ltd. & Anr, [1968] 2 S-.C.R. 311, followed.
Tata Oil Mills Co. Ltd. v. Its Workmen and Others [1960] 1
S.C.R. 1, referred to.
(ii) The contention of the appellants that no return should
be allowed on the share premium of Rs. 70 lacs was rightly
rejected by the tribunal. When ,a company makes a Rights
issue, the Government, while giving consent, fixes a certain
amount of premium to be charged for those shares. Those
shares are issued only to the shareholders who ask for them
and who pay the premium amount in addition to the nominal
value of the share. Under the Companies Act. 1956, as
amended, a capital introduced by the shareholders in a
company had to be shown in accordance with schedule VI as a
separate item. But the share premium is not undistributed
profit and cannot be distributed as dividend. It is really
the share capital of the respondent and therefore, the
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respondent was justified in claiming 6% return on this
amount. [234 A-C]
(iii) Mere production of a balance-sheet by a company
cannot be taken. as proof of a claim as to what portion of
the reserves had been actually used as working capital. The
utilisation of any amount from the reserves as working
capital has to be proved by an employer by adducing proper
evidence by way of affidavit or otherwise after giving
opportunity to the workmen to contest its correctness in
cross-examination. The company will have to satisfactorily
prove that the amount on which the return is claimed has
been actually used as working capital. But in the present
case the respondent has adduced oral and documentary
evidence. It is not a case where merely profit and loss
account alone has been filed without any further evidence
being adduced by’ the respondent. Therefore there is no
basis for the contention of the appellants that the
respondent had not properly established its claim for return
on working capital [234G-H, 235 C-D]
2 2 9
The Oriental Gas Company Ltd. v. Their Workmen, [1971] 11
L.L.J. 657 and Bareilly, Electricity-Supply Co. Ltd. v. The
Workmen & Ors. [1972] 1 S.C.R. 241 referred to.
(iv) (a) Even if the claim of the company for rehabilitation
is rejected completely, on the basis of the findings, that
is, after taking into account the claims of the respondent,
allowed and rejected, and the rebate in income-tax that may
be received by the company, the workmen would still have
been paid bonus at a rate which has been accepted as correct
by this Court. [237 C-D]
(b) On the basis of the education to be made according to
the appellants in respect of rehabilitation claim, the
respondent will be entitled to some amount at least in that
regard. Even if that lesser amount is taken into account
the available surplus will be reduced further, and, the
result will be that even the amount paid as bonus already by
the respondent will be more than what the workmen will be
entitled to according to the decisions of this Court. [238
E-H]
(c) The industrial Tribunal, Calcutta, in relation to a
claim for bonus for the year 1957 had elaborately discussed
the matter and allowed a certain sum as rehabilitation
charges. When once the tribunal had considered a similar
claim and had adopted it on the basis of evidence adduced by
the parties, normally, the amount so awarded towards
rehabilitation should be adopted even though it will not be
conclusive for subsequent years. In the present case, the
rehabilitation claim was worked out only on the basis of
replacement costs of the year 1958. If the appellant’s case
was that the tribunal, when working out the claim for 1957
had not properly appreciated the evidence they should have
elicited from the witnesses who deposed on behalf of the
respondent that the figures furnished by the respondent are
not correct and could not be accepted. But the appellants
had not objected to the data adduced as well as the
documents produced by the company with reference to its
rehabilitation claim. No suggestions had been made to the
various witnesses examined on behalf of the respondent that
the figures on the basis of which the rehabilitation claim
was made were in any way erroneous. [237G-238D]
Therefore, considering the matter from any point of view,
there is no question of the workmen being entitled to any
additional bonus over and above what has already been paid
M/s Gannon Dunkerley and Co. Ltd. v. Their Workmen, A.I.R.
1971 S.C. 2567. followed.
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JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1291 of 1968.
Appeal by special leave from the Award dated October 29,1967
of the Industrial Tribunal, ’Madras in Industrial Dispute
No. 65 of 1966 published in the Supplement to Part II
Section I of the Fort St. George Gazette dated the 15th day
of November 1967.
M. K. Ramamurthi, R. C. Pathak and J. Ramamurthi, for the
appellants.
B. Sen, C. Doraiswami and D. N. Gupta, for the respondent.
The Judgment of the Court was delivered by--
VAIDIALINGAM, J.-This appeal, by special leave, by the
workmen is against the award dated October 20, 1967, of the
Industrial Tribual, Madras, in I.D. No. 65 of 1966 in so far
as it declined to grant additional bonus for the years 1962
and 1963.
The respondent, Dunlop Rubber Company of India Limited,
which is engaged in the manufacture and sale of types and
tubes for light and heavy vehicles, has a factory in
Calcutta ’besides one at Ambattur in Madras, which was
started or about 1959. At the time of the award, the
company was employing about 1200 workmen but,
230
during the years 1962 and 1963, it wag employing about 800
workmen. The company paid to its workmen for each of these
two years, 1962 and 1963, 12 weeks’ basic wages as annual
bonus. The workmen were not satisfied with the said payment
and demanded additional bonus of three months’ basic wages
for each of these years. According to the workmen, the
company has made a net profit of about 3.30 crones in each
of these years. The company, however, declined to meet the
demand with the result that the Government of Madras by its
order dated October 15, 1966, referred the dispute regarding
the additional bonus to the Industrial Tribunal, Madras.
There was also another dispute referred regarding the
alteration of the gratuity scheme. But we are not concerned
with this dispute.
The case of the workmen, as disclosed by their written
statement before the Tribunal, was as follows
The company, according to their published profit and loss
account has made a net profit of Rs. 3.30 crores and Rs.
3.27 crores for the years 1962 and 1963 respectively. The
management have made various deductions from their gross
profit, which were not justified according to the Full Bench
Formula. The management in their work sheet claimed Rs.
2.49 crores as rehabilitation and this huge amount has been
claimed to purposely defeat the just demands of the workmen.
Having due regard to the profits earned by the company, the
demand of three months’ basic wages as additional bonus was
justified-
The company resisted the claim of the union. The case of
the company was as follows :-
In each of these two years, 1962 and 1963, it has paid to
its workmen in India bonus equivalent to. fifteen weeks’
basic wages. All the workmen, except the workmen at
Ambattur, who represent only about 12 per cent of. the total
number of employees, have accepted the payment and they are
fully satisfied with the amount paid voluntarily by the
company. The company made proper deductions and additions
according to the Full Bench Formula and arrived at the
available surplus. Out of the said available surplus, the
company has paid nearly 60 or 63 per cent as bonus to the
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workmen which represents fifteen weeks’ basic wages.
Before the Tribunal, the company as well as the workmen
filed charts in respect of their pleas. The union objected
to the deduction made by the company in respect of the
commission received out of the sales made by the Dunlop
United Kingdom as well as the royalties receivable out of
the sales made by the London firm. There were also
objections taken by the union in respect of certain
deductions and claims made by the company. As those
contentions have been raised before us also, we will refer
to those matters later. There was also controversy
regarding the rehabilitation claimed by the company. The
Tribunal, on a consideration of the materials placed before
it by both the parties, ultimately accepted the case of the
management and held that the bonus already paid to the
workmen was sufficient and that they are not entitled to any
additional bonus for these two years.
231
Mr. M. K. Ramamurthi, learned counsel for the appellant-
workmen attacked the view of the Tribunal accepting the
claims made by the company in respect of several items. The
company had filed before the Tribunal a statement, Ext. M-
3, extracted below, showing the available surplus for the
years 1962 and 1963 :
"The Dunlop Rubber Co. (India) Limited Available Surplus
Computations for the years 1962 and 1963.
--------------------------------------------------------------
1962 1963
--------------------------------------------------------------
Rs. Rs. Rs. Rs.
Net Profit per Accounts 95,59,317 1,68,86,953
Add: Bonus (account
charged in accounts) 48,86,449 48,40,912
Provision for Taxation
per Accounts 2,34,78,958 1,88,82,441
Depreciation per Accounts 60,79,969 3,41,45,376
59,82,6642, 67,06,024
4,37,04,693 4,35,92,977
Deducts
Commission receivable
(Note 1) 3,94,9643,94,973
Royalties receivable
(Note 2) 59,19150,580
Profit on sale of Fixed
Assets (Note 3) 92,5962,974
Provision for Retirement
Gratuities written
back 5,52,7515,00,0009,42,579
Total Gross Profit 4,31,51,942 4,26,50,398
Less :
Notional Normal Depre-
ciation 72,67,88783,90,107
3,58,84,0551,76,23,953,3,42,60,291
Less :
Notional Income Tax
and Super Tax 1,84,68,616
Notional Super Profits
Tax/Sur Tax. 49,09,9652,33,78,58125,36,5852,01,60,538
1,25,05,4741,40,99,753
Less
Return on paid-up Capital
Ordinary share Capital
(6%). 27,00,00027,00,000
Share Premium (6% ) 4,20,0004,20,000
Preference share Capital
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(Actual). 4,60,0004,60,000
4% Return on Reserves
employed as working
capital Schedule A. 23,35,00959,15,O0,924,90,56360,70,
563
Available surplus subject
to rehabilitation claim 65,90,465 80,29,190
-------------------------------------------------------------
Note 1. Commission receivable arises out of sales made by
Dunlop U. K. of their products to India either through the
Indian High Commissioners purchasing Commission in London or
to direct importers.
2 32
Note 2. Royalties receivable arise out of sales made by
Dunlop U.K., of their products to Afghanistan, Burma and
Pakistan.
According to the company, it has paid more than 60 per cent
of the available surplus as bonus to the workmen and that
they are not entitled to any additional bonus. The first
item that was challenged by Mr. Ramamurthi was regarding the
deduction made by the company in the sum of Rs. 3,94,964 and
Rs. 3,94,973 for the years 1962 and 1963 respectively as
commission as well as the sums of Rs. 59,191 and 50,582 as
royalties for the years 1962 and 1963 respectively received
from Dunlop, United Kingdom. According to the counsel, the
workmen have also contributed to enable the company to earn
these amounts and, therefore, they will be entitled to a
share in the said profits. In this connection, Mr.
Rammurthi referred us to the decision of this Court in The
Tata Oil Mills Co. Ltd. v. Its Workmen and mothers.(1) In
that decision certain items were claimed by the company as
extraneous income obtained by them without any contribution
by labour. While allowing the claim of the company in
respect of two items regarding the rest it was held by this
Court that they had been earned by the company in the normal
course of its business and that there was no reason why the
labour should be’ excluded from its share in the profit. It
was no doubt observed by this Court that normally there must
be contribution of the workmen in earning profits before
they are entitled to profit bonus, but it is not necessary
that a direct connection between the efforts of the workmen
and a particular item of profit earned has to be established
before the profit can be taken into account for the purpose
of arriving at the available surplus.
Mr. B. Sen, learned counsel for the company, on the other
hand, referred us to Notes 1 and 2 in Ext. M-3, which has
been extracted by us earlier. Notes 1 and 2 clearly explain
the circumstances under which the said amounts are earned by
the company and they show that the labour has made no
contribution whatsoever in the company’s earning either the
commission or the royalties. Mr. Sen also drew Our
attention to the evidence of MW-1, the Deputy Chief
Accountant of the company, who has explained the
circumstances under which the said amounts were received.
We are of the opinion that the Tribunal was justified in
accepting the contention of the company that the amounts
received as commission and royalties need not be added back.
MB-1, the Deputy Chief Accountant of the, company, has
deposed to the nature of these amounts received by the
company. According to him, the commission is received from
the parent company in United Kingdom for sales made by them
through the High- Commission in London or sales effected as
against orders received directly by the company from the
Indian customers. The amounts due to the company were
credited by the London office. Similarly, royalties were
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also received out of sales of Dunlop products made to
Afghanistan, Burma and Pakistan. No canvassing for orders
in those countries is done by the company- Apart from the,
fact that Notes 1 and 2 in Ext. M-3,
(1) [1960] 1 S. C. R. 1,
233
have not been challenged, we also find that there is no
cross-examination by the union of MB-1 when he has referred
to the nature of these receipts, which go to show that the
workmen in India have not at all contributed, in any
measure, in earning those amounts. In our opinion, the
amounts received by the company, by way of commission and
royalties, are analogous to the home delivery commission,
which was held by this Court in Workmen of M/S Hindustan
Motors Ltd. v. MIS Hindustan Motors Ltd. & Anr.(1) to be
extraneous income. The Hindustan Motors Limited, which was
manufacturing cars in collaboration with a foreign concern,
was entitled to commission on the sales made in India by the
foreign concern, even though the company was not a party to
those transactions. This amount was called home delivery
commission. The company claimed that the said commission
should be deducted while calculating the surplus out of the
profits available for distribution of bonus. The workmen
challenged the said deduction. This Court, however,
rejected the contention of the workmen and held that the
amount received as home delivery commission has to be
treated as extraneous income, which was earned by the
company without any activities in which the workmen
participated or contributed their labour. The decision
relied on by Mr. Rammurthi in the Tata Oil Mills Co..
Ltd.(2) was referred and it was held that the situation
therein was entirely different. But the principle laid in
the Tata Oil Mills Co. Ltd.(2) that if any income was earned
in the course of the normal business of a company in which
the workmen were- also engaged, that income must be included
in the profits for calculation of surplus available for
distribution of bonus, was approved in the Hindustan
Motors(1) case. Applying the said principle to the case on
hand, we are of the opinion that the commission and
royalties received by the company did not require any
contribution or work or labour on the part of the workmen
and it accrued to the company in view of the arrangements
spoken to by MW-1. In the circumstances, the deduction of
these amounts from the profits by the company was fully
justified.
It may be mentioned that the company had deducted from the
profits the provision made for retirement gratuities written
back. Mr. Sen has quite fairly accepted that the deduction
is not justified. Therefore, this item need not be
discussed further.
The company had claimed Rs. 4,20,000 for each of these years
being return of 6% on the share premium of 70 lakhs. The
company had also claimed a sum of Rs. 27 lakhs for each of
these years being 6% return on ordinary share capital. The
claim for return made in respect of ordinary share capital
is not challenged. But the claim made for return on the
share premium of 70 lakhs is attacked by Mr. Ramamurthi on
the ground that the share premium does not represent paid-up
capital. The Tribunal did not accept this contention
advanced on behalf of the workmen.
MW-1 has again spoken regarding the share premium amount.
From his evidence it is clear that when a company makes a
Rights
(1) [1968] 2 S. C. R. 311.
(2) [1960] 1 S. C, R. 1.
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234
issue, the Government, while giving consent, fixes a certain
amount of premium to be charged for those shares. Those
shares are issued only to the shareholders who ask for it
and who pay the premium amount in addition to the nominal
value of the share. A capital introduced by the
shareholders in the company is shown as part of share
capital according to the Companies Act upto 1956. When the
said Act was amended, it had to be shown in accordance with
Schedule VI as a separate item, as it was only available for
issue to shareholders and could not be distributed as
dividend. The said share premium amount had no bearing as
general reserves and they were really the share capital of
the company and, therefore, the company was justified in
claiming 6% return on this amount. The share premium is not
undistributed profit and cannot be distributed as dividend.
We are satisfied, in the circumstances, that the contention
of the union that no return should be allowed on the share
premium amount, has been rightly rejected by the Tribunal.
The third item relates to the deductions made, by the
respondent out of the profits of two items of donations made
in 1962. No donations were claimed as deduction in 1963.
As- a substantial part of the donations was for the National
Defence Fund, the Tribunal held that the expenditure was
properly incurred and the company was justified in deducting
the donations from the profits. Mr. Sen accepted that the
deduction made by the management under this head is not
justified. Even otherwise, the company is not entitled to
deduct those amounts,- as is clear from the decision of this
Court in Voltas Ltd. v. Its Workmen(1).
The fourth item, which is contested by the appellant, is the
return of 4% on reserves employed as working capital. The
company claimed Rs. 23,35,009 and Rs. 24,90,563 as 4% return
on reserves employed as working capital in 1962 and 1963
respectively. According to Mr. Ramamurthi, this claim has
not been established in accordance with the decisions of
this Court. He referred us to the decision in The Oriental
Gas Company Ltd. v. The Workmen(-’) and Bareilly Electricity
Supply Col. Ltd. v. The Workmen & Ors.(3). In both these
decisions, the nature of the evidence to sustain a claim for
return on working capital has been discussed and laid down.
In particular, in the second decision cited above, the
various decisions bearing on the point have been
exhaustively reviewed. The position emerging from the
decisions of this Court is that mere production of a
balance-sheet by a company cannot be taken as proof of a
claim, as to what portion of the reserves has been actually
used as working capital. The utilisation of any amount from
the reserves as working capital has to be proved by an
employer by adducing proper evidence by way of affidavit or-
otherwise, after giving an opportunity to the workmen to
contest the correctness of the same in cross-examination.
The company will have to satisfactorily prove that the
amount on which return is claimed, has been actually used as
working capital.
(1) [1961] 3 S.C. R. 167.
(2) [1971] (11) LLJ 657.
(3)[1972]1 S. C. R. 241.
235
The question is whether the criticism of Mr. Ramamurthi that
the company has not properly established its claim for
return on working capital in accordance with the decisions
of this Court, is justified? The company has filed Ext. M-
8 containing particulars regarding the amount used as
working capital for the years 1962 and 1963. It has also
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filed Ext. M-9, the certificate of the Chartered
Accountant, that reserves of Rs. 5,83,75,236 and Rs.
6,22,54,083 have been used as working capital in the years
1962 and 1963 respectively. MW-1 has spoken to the con-
tents of Exts. M-8 and M-9. The Chartered Accountant of
the auditors, who issued the certificate, Ext. M-9, has
also given evidence as MW-2. When they have spoken about
the amounts used as working capital, there is absolutely no
cross-examination by the union regarding these matters.’
This is not a case where, merely the profit and loss account
alone has been filed without any further evidence adduced by
the management. Mr. Ramamurthi no doubt attempted to
satisfy us by a reference to the profit and loss account for
the two years that the entire amount claimed by the company
could not have been used as working capital. We have gone
through the balance-sheet and profit and loss account. We
are satisfied that the Tribunal has rightly accepted the
claim of the management for 4% return on the working
capital.
The fifth and the last item that is in controversy between
the parties is the claim for rehabilitation made by the
company. Before we consider that question, we must refer to
a contention raised by Mr. Ramamurthi that the management
had no claim for rehabilitation and, therefore, no claim for
rehabilitation should be allowed. In particular, Mr.
Ramamurthi referred us to the statement in Ext. M-3, which
we have adverted to earlier, to the effect "available
surplus subject to rehabilitation claim" and stressed that
the company itself has made a calculation without claiming
any rehabilitation. We are not inclined to accept this plea
of Mr. Ramamurthi. On the other hand, Ext. M-3 shows that
the company was prepared to take a stand that even without
any claim for rehabilitation being allowed in its favour,
the available surplus, shown in Ext. M-3 will establish
that the workmen have been paid more than 60 to 62% of the
available surplus as bonus for each of the two years. Ext.
M-3 does not and cannot be put against the company if it can
properly establish a claim for rehabilitation. Before we
discuss further the claim for rehabilitation, it is now
necessary to work out the figures on the basis of the
findings recorded by us earlier. We have accepted the claim
for deduction of commission and royalties in favour of the
company. We have also accepted its claim for return on the
share premium amount
2 36
of Rs. 70 lakhs. We have disallowed the claim of the
company regarding the amount paid by them as donation in
1962. We have allowed the company’s claim for return on the
working capital. On the above basis, two charts have been
prepared of the available surplus for the years 1962 and
1963. They areas follows
Available Surplus Computations for the year 1962.
Rs. Rs.
Net Profit per Accounts 95,59,317
Add: Bonus (amount charged in Accounts) 45,86,449
Provision for taxation per Accounts. 2,34,73,958
Donation to N. D. F. 5,25,000
Depreciation per Accounts. 60,79,9693,46,70,376
4,42,29,693
Deduct:Commission receivable (Note 1) 3,94,964
Royalties receivable (Note 2).59,191
Profit on sale of fixed Assets (Note 3).98,5965,52,51
Total Gross Profits : 4 ,93942
Less :Notional Normal Depreciation 72,67,887
3,64,09,065
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Less :Notional Income-tax and Supertax
1,87,31,118
Notional Super Profits-Tax/Surtax 50,53,4342,37,34,542
1,25,24,513
Less :Return on paid-up capital
Ordinary Share Capital (6 %) 27,00,000
Share Premium (6 %) 4,20,000
Preference Share Capital (Actual)4,60,000
4 % Return on Reserves employed as working
capital (Schedule A).23,35,009 59,15,006
Available Surplus 67,09,504
Available Surplus Computations for the year 1963
Rs. Rs.
Net Profit per Accounts1,68,86,952
Add: Bonus (amount charged in Accounts.)48,40,912
Prevision for Taxation per Accounts.1,58,82,448
Depreciation per Accounts. 59,82,6642,67,06,024
4,35,92,977
Deduct Commission receivable (Note 1).3,94,973
Royalties receivable (Note 2) 50,580
Profit on Sales of Fixed Assets (Note 3).(2,974)4,42,579
Total Gross Profit4, 31,50,298
Less : Notional Normal Depreciation 83,90,197
2,47,60,291
Less : Notional Income-tax and Supertax.1,78,73,953
Notional Super Profits-Tax/Sur Tax.21,90,5282,00,64,481
1,46,95,810
2 3 7
Less:Return on paid-up capital
Ordinary Share Capital (6%) 27,00,000
Share Premium (6 %) 4,20,000
Preference Share Capital (Actual). 4,60,000
4% Return on Reserves employed as working
capital (Schedule A). 24,90,56360,70,563
Available Surplus 26,25,247"
In both the charts no claim for rehabilitation has been
taken into account. Out of the available surplus in 1962,
the company paid nearly 66% as bonus for that year.
Similarly out of the available surplus in 1963, the company
has paid nearly 60 to 62% as bonus. Prima-facie, we are of
the view that even if the claim of the company for
rehabilitation is rejected completely, still on the basis of
the figures worked out in the above charts, after taking
into account the rebate in Income-tax that will be, received
by the company, the workmen have been paid bonus at a rate
which has been accepted as correct by this Court and as such
they cannot have any grievance.
Regarding the claim for’ rehabilitation, the company had
filed three statements. Exts. M-15, M-16 and M-17 are
charts relating to the buildings, plant and machinery and
moulds. The company has also adduced evidence in respect of
the claims made in these statements. Mr. Ramamurthi has
attacked the claim for rehabilitation made by the company.
When the charts prepared by the management regarding
rehabilitation were before the Tribunal, we find that
several matters spoken to by the witnesses regarding the
charts do not appear to have been seriously challenged by
the workmen. Regarding the multipliers and divisor for
plant and machinery, including moulds, these have been
spoken to by the factory Engineer, MW-3. Regarding the
buildings, the Architect, MW-4, has also given evidence.
Regarding all these matters, the Chartered Accountant
attached to the auditors of the respondent company, has
given evidence as MW-2. The appellant has not objected to
the data adduced as well as the documents produced by the
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company. No suggestions have been made to these witnesses
that the figures on the basis of which the rehabilitation
claim was made, were in any way erroneous. It is before us
for the first time that Mr. Ramamurthi has urged that-the
evidence of these witnesses is not sufficient to justify the
claim for rehabilitation made by the company. Mr.
Ramamurthi has referred us to the variousdecision
regarding the nature of the evidence that is required
to be produced by a company when it makes a claim for
rehabilitation. Mr. B. Sen invited our attention to the
award dated February 5, 1960of the Industrial
Tribunal, Calcutta, Ext. M-26, which related tothe
claim of the workmen of the respondent company in Calcutta
for bonus for the year 1957. In that award, the-Tribunal
has very elaborately gone into the evidence adduced-by the
company and has allowed a sum of Rs. 2,18,36,983, as
calculated by the company, as,rehabilitation charges. When
once a Tribunal has considered a similar claim and has
adopted on the basis of the evidence adduced by the parties,
normally the amount awarded towards rehabilitation claim
should be adopted. We do not say that it is conclusive.
But that award is certainly entitled to due consideration at
our hands. In
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that award the Tribunal had worked out the rehabilitation
claim for the year 1957. The charts filed by the company
regarding rehabilitation, though for the years 1962 and
1963, were worked out only on the basis of the replacement
cost of the year 1958., We are mentioning this aspect
because if the appellant’s case was that the Tribunal, when
working out the claim for 1957 in Ext. M-26 has not
properly appreciated evidence, it should have elicited from
the witnesses, who deposed on behalf of the company, that
the figures furnished by them are not correct and cannot be
accepted. No such attempt has been made by the appellant.
Mr. Sen, learned counsel, relied on the decision of this
Court in M/s Hindustan Motors Ltd.(1) case and pointed out
that according to that decision, the only permissible
deduction from the total amount claimed as required for
rehabilitation by the appellant can be the depreciation
amounting to Rs. 5.17 crores and Rs. 5.75 crores in 1962 and
1963 respectively. He further pointed out that if the
amount representing depreciation reserve is taken out of the
total reserves, which is established by the evidence, then
the balance amount has been utilised in raw material and
hence there were no available liquid assets towards
rehabilitation.
We do not propose to go into the details of the claim for
rehabilitation made by the respondent-company, as well ’as
the objections now made on behalf of the workmen to the said
claim. The reason is that when evidence, oral and
documentary, was adduced by the company before the Tribunal,
the appellant has not objected to the data adduced and the
documents produced by the management and they have not put
any questions to the witnesses to establish that the
calculation made by the company is erroneous. There is also
the additional fact that from the two charts of available
surplus for the years 1962 and 1963, reproduced earlier,
even without allowing any claim for rehabilitation, the
workmen have been paid bonus for the two years in question
at rates higher than 60%. Allowing for the benefit that the
management will get by way of tax rebate on the amount of
bonus paid, the payment of bonus already made is in
accordance with the Proportion accepted by this Court vide
M/s Gannon Dunkerley and Co. Ltd. v. Their WorkMen(2).
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11
Even on the basis of the calculation to be made, according
to the appellant, in respect of the rehabilitation claim,
the company will be entitled to. some amount at least in
that regard. Even if the amount, as contended by Mr.
Ramamurthi, is taken into account, the available surplus, as
shown in the charts, will be reduced further. The result
will be that even the amount paid as bonus already by the
company, will be more than what the work-
(1) [1968] 2 S.C R. 311.
(2) AIR 1971 S. C. 2567.
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men will be entitled to according to the decisions of this
Court. As pointed out earlier, even without making any
provision for rehabilitation, the percentage of bonus paid
is amply sufficient. Considering the matter from any point
of view, there is no question of the workmen being entitled
to any additional bonus over and above what has already been
paid.
To conclude, we are satisfied that the award of the Tribunal
holding that the workmen are not entitled to any additional
bonus for the years in question, is correct. The appeal
fails and is dismissed. There
will be no order as to costs.
V. P. S. Appeal dismissed.
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