Workmen Vs. Management of Dunlop
Rubber Company Of India Limited  INSC 117 (4 May 1973)
CITATION: 1973 AIR 2394 1974 SCR (1) 228 1973
SCC (2) 492
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.
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,  2 S-.C.R. 311, followed.
Tata Oil Mills Co. Ltd. v. Its Workmen and
Others  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
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,  11 L.L.J. 657 and Bareilly, Electricity-Supply Co. Ltd. v. The
Workmen & Ors.  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.
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 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
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
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 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 (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
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 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)
 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
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
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
From his evidence it is clear that when a
company makes a Rights (1)  2 S. C. R. 311.
(2)  1 S. C, R. 1.
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
(1)  3 S.C. R. 167.
(2)  (11) LLJ 657.
(3)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 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
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 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
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 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 various decision
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 to the 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
But that award is certainly entitled to due
consideration at our hands. In 238 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).
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)  2 S.C R. 311.
(2) AIR 1971 S. C. 2567.
239 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
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.