Bharat Barrel and Drum MFG. Co. Private
Ltd. Vs. Govind Gopal Waghmare & ANR  INSC 54 (24 March 1960)
GUPTA, K.C. DAS
CITATION: 1960 AIR 873 1960 SCR (3) 378
CITATOR INFO :
R 1961 SC1191 (3) R 1963 SC1007 (13)
Industrial Dispute--Full Bench
The workmen of the appellant company claimed
four months, wages including dearness allowance as bonus for the year 1952, and
retrospective operation of the increased wage scale to be fixed by the
Industrial Tribunal from March 1, 1952. The appellant agreed to the increased
wage scale suggested by the Tribunal but wanted that it should be linked to
some guaranteed production, and opposed its operation retrospectively on the
ground that there had been eliberate slowing down of production by the workmen
in the previous years. The Tribunal found that there was some justification in
the appellant's contention that there was considerable go-slow which had affected
production and ordered that retrospective effect should be given to its order
relating to increase in wages which was passed on May 13, 1957, from June 1,
1956, and not March 1, 1952, as claimed by the workmen, The increased wages
were not linked to any guaranteed production but it was made clear that the
workers would give certain reasonable production to which the workmen agreed.
The Tribunal granted five months basic wages by way of bonus on the basis of
the Full Bench formula which is generally applied to these matters. On appeal
by the Appellant-company by special leave :
Held, that there was no reason for
interference with the order of the Tribunal fixing the date as June 1, 1956,
from which the increased wages should come into force and that the Tribunal had
jurisdiction to award five months' basic wages by way of bonus.
For the purpose of the Full Bench formula,
the income tax payable has to be deducted on the figures worked out according
to the formula and it is immaterial what the actual income-tax paid is-whether
more or less.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 93 of 1959.
Appeal by special leave from the Award dated May 13, 1957, of the Industrial Tribunal, Bombay, in Reference (I.T.) No. 166 of 1955.
R. J. Kolah, S. N. Andley, J. B. Dadachanji,
Rameshwar Nath and P. L. Vohra, for the appellants.
K. B. Chaudhury and Janardan Sharma, for the
respondents Nos. 1 and 2.
379 1960. March 24. The Judgment of the Court
was delivered by WANCHOO, J.-This appeal by special leave raises two questions,
namely, (i) bonus for the year 1952 and (ii) retrospective operation of the
order of the Industrial Tribunal relating to increase in wages. The appellant
is a company manufacturing barrels and drums at Bombay. There was a dispute
between the appellant and its workmen about a number of matters, which was
referred to the tribunal by the Government of Bombay on November 17, 1955. In respect of the two matters which are now raised in appeal the workmen claimed
(i) four months wages including dearness allowance as bonus for the year 1952
and (ii) retrospective operation of the wage-scale to be fixed by the tribunal
from March 1, 1952.
So far as the increase in wages, is
concerned, the appellant agreed to the scale suggested by the tribunal but it
opposed the grant of the increased scale retrospectively and also wanted that
the increased wages should be linked to some guaranteed production. The reason
for this was that the appellant felt that there had been deliberate slowing
down of production by the workmen in the previous years. The tribunal was of
opinion that there was some justification in the appellant's contention that
there had been considerable go-slow which had affected production. Taking that
into account it ordered that retrospective effect should be given to its order
which was passed on May 13, 1957 from June 1, 1956. As to the linking of the increased wages to a certain guaranteed production it found it difficult to lay
down any norm itself; but it made it clear that the increase in wages was made
by it on the basis that the workers would give a certain reasonable production
and noted that the workers were agreeable to do that. It, however, recommended
that immediately after the. award had been given, an expert should be appointed
by agreement, if possible, to go into this question. It also said that in case
it was not possible to appoint an expert by agreement it would be open to the
appellant to appoint one.
380 The appellant's contention before us is
that the tribunal having found some justification in its contention that there
had been considerable go-slow should not have given retrospective effect at all
to the order relating to the increase in wages. This matter has been considered
fully by the tribunal and it came to the conclusion that increase in wages
should be granted from June 1, 1956. This could hardly be called retrospective
considering that the reference was made in November 1955 ; in any case the
tribunal rejected the claim of the workmen for retrospective operation for the
period of over four years from March 1952 to May 1956 and a good deal of
go-slow was practised during this period. In the circumstances we see no reason
for interference with the order of the tribunal fixing the date as June 1,
1956, from which the increased wages should come into force.
This brings us to the next question relating
to bonus. The tribunal has awarded five months' basic wages by way of bonus.
The first contention in this connection is that the workmen had only claimed
four months' basic wages and the tribunal could not have awarded anything more
than what the workmen claimed. This in our opinion is incorrect. The workmen
had claimed four months' wages including dearness allowance as bonus. Five
months' basic wages which the tribunal has allowed are admittedly less than the
claim put forward (namely, four months' wages including dearness allowance). In
the circumstances the tribunal certainly had jurisdiction to award what it has
awarded to the workmen.
The next question is whether the tribunal was
justified in awarding as much as five months' basic wages on the basis of the
Full Bench formula, which is generally applied to these matters. The gross
profit found by the tribunal is not challenged, namely, Rs. 5.05 lacs. The
tribunal has then allowed Rs. 1.36 lacs as depreciation, leaving a balance of
Rs. 3.69, lacs. Deducting income-tax from this at seven annas in a rupee (i.e.
Rs. 1.61 lacs), we are left with a balance of Rs. 2.08 lacs. Six per cent. per
annum interest on the paid-up capital along with four per cent. interest on the
working capital comes to Rs. 16,000, leaving an available 381 surplus of Rs.
1.92 lacs. Out of this, the tribunal has allowed five months' basic wages as
bonus which according to its calculations comes to Rs. 91,000, leaving Rs. 1.01
There will be a rebate of Rs. 40,000 on this
sum, leaving a total of Rs. 1.41 lacs with the appellant. On these figures, the
bonus awarded by the tribunal cannot be interfered with.
The appellant, however, draws our attention to
two circumstances in this connection. In the first place it urges that the
tribunal has not taken into account anything for rehabilitation. But it may be
mentioned that the appellant had proved no rehabilitation amount as such. What
it had done was to appropriate Rs. 3.16 lacs towards depreciation, which of
course was not the proper amount of notional normal depreciation, which is
allowable under the formula. Our attention is drawn, however, to the figures
filed by the workmen in Ex. U-4 in which Rs. 40,000 has been allowed towards
rehabilitation. Even accepting this concession by the workmen and deducting it
from the figures given by us above, the appellant would still be left with Rs.
1.01 lacs after paying five months' basic wages as bonus. There is thus no
reason to interfere with the award of bonus on this ground.
Lastly it is urged that according to the
income-tax assessment which was actually made in this case sometime after the
order of the tribunal, the appellant has been assessed to income-tax amounting
to Rs. 2.35 lacs. The appellant claims that it should be allowed this entire
amount and not the notional figure calculated by us, namely, Rs. 1.61 lacs as
income-tax. We are of opinion that for the purpose of the Full Bench formula,
the income-tax payable has to be deducted on the figures worked out according
to the formula and it is immaterial what the actual income -tax paid is-whether
more or less. In this particular case, the income-tax appears to be more
because certain items which were challenged by the workmen but were allowed as
proper expense by the tribunal have apparently not been allowed as proper
expense by the income-tax department. The industrial tribunal, however, is not
concerned directly with what the income 49 382 tax authorities assess as actual
income-tax in a particular year; it is concerned with working out the Full
Bench formula in accordance with its notional calculations and this is what has
been done in this case. There is no ground therefore for interference-with the
award of bonus for this reason either.
We therefore dismiss the appeal, but in the
circumstances pass no order as to costs.