Skip to content


Rallis India Ltd., Bombay Vs. Its Workman - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberAward, in Reference (I.T.) No. 114 of 1965
Judge
Reported in(1965)IILLJ712Bom
ActsPayment of Bonus Act - Sections 3, 13, 23 and 34; Industrial Disputes Act, 1947 - Sections 10(1) and 12(5)
AppellantRallis India Ltd., Bombay
Respondentits Workman
Excerpt:
- - this arrangement is reasonable and allows the manufacturing division as well as the selling division a fair margin of profit. 6.12 unanimously recommended as follows :where industry-wise arrangements already exist, the parties are at liberty to renew the agreements with such modifications, if any, as may be agreed to by them. the formula proposed by us would also not apply during the currency of any industry wise or unit-wise agreement, except where such agreements stipulate that the formula recommended by the bonus commission should apply in modification or substitution of existing arrangements. 34 is perfectly valid and applies to the present case, and that the workers are entitled in the alternative to a total amount of bonus according to the provisions of s.acts/rules/orders: payment of bonus act - sections 3, 13, 23 and 34; industrial disputes act, 1947 - sections 10(1) and 12(5)award1. this is a reference by the government of maharashtra under s. 10(1)(d) read with s. 12(5) of the industrial disputes act for adjudication of a dispute between rallis india, ltd., and the workmen employed under it in its head office and allied offices over the following demands : 'the company should pay all its workmen unconditional bonus equivalent to five-twelfths of their earnings including salary, wages, dearness allowance, during the year 1 september 1962 to 31 august 1963.' 2. in the statement of claim by the rallis india, ltd., lower grade staff union, it is stated, inter alia, as follows. the company was incorporated in 1948. it has an all-india.....
Judgment:
Acts/Rules/Orders:

Payment of Bonus Act - Sections 3, 13, 23 and 34; Industrial Disputes Act, 1947 - Sections 10(1) and 12(5)

AWARD

1. This is a reference by the Government of Maharashtra under S. 10(1)(d) read with S. 12(5) of the Industrial Disputes Act for adjudication of a dispute between Rallis India, Ltd., and the workmen employed under it in its head office and allied offices over the following demands :

'The company should pay all its workmen unconditional bonus equivalent to five-twelfths of their earnings including salary, wages, dearness allowance, during the year 1 September 1962 to 31 August 1963.'

2. In the statement of claim by the Rallis India, Ltd., Lower Grade Staff Union, it is stated, inter alia, as follows. The company was incorporated in 1948. It has an all-India distribution and service organization with its head office in Calcutta and branches at various cities and towns in India. For the year ending 31 August 1963, the company has made a profit of Rs. 86 lakhs as against Rs. 44 lakhs for the previous year for which bonus of three moths' basic wage was paid. The union submitted a demand for five months' total earnings as bonus for the year 1962-63. The union states that having regard to the enormous profit made, the demand is justified.

3. In the statement of claim by the Rallis and Associated Concerns Employees' Union it is stated, inter alia, as follows.

4. The union refers to the history of the company and its various activities and the merger with it from 1 May 1962 of Teddington Chemical Factory, Ltd. For the year 1962-63 the company, according to its practice in the past, declared an interim bonus of one month's basic salary. Subsequently it paid further two months' basic wages as bonus to the clerical and lower grade staff. The union wrote to the company that the acceptance of bonus was subject to its demand for adequate bonus when the financial position was known. The company has made a profit of Rs. 79.56 lakhs before charging depreciation. The wages of the workmen are quite inadequate. The union goes on to say that for the purpose of arriving at the gross profit certain items should be added. The company is spending extravagantly on its executive staff. Officers are paid bonus at the same rate and top executives have been paid on a lavish scale. In calculating bonus, bonus to officers drawing over Rs. 500 per month should not be taken into consideration.

5. The company has, in its reply to the statement of claim by the Rallis and Associated Concerns Employees' Union, stated inter alia as follows. The Bonus Ordinance has just been promulgated and its submissions are without prejudice to its right and contentions under the Ordinance after obtaining legal advice thereon. With regard to the merger of the Teddington Chemical Factory, Ltd. (hereinafter referred to as T.C.F.) the company says that by an order of the High Court all assets of that company were merged in Raills India, Ltd. Before the merger, the management of that company had entered into a five-year agreement with the T.C.F. Kamgar Sangh; by which interalia the workmen of the factory were entitled to bonus at the rate of give months' basic salary for the year 1962-63. In view of the merger, Rallis India, Ltd., took upon itself the obligation as to payment of bonus, wages, dearness allowance, etc., in terms of the agreement dated 25 April 1961 between T.C.F. Ltd., and the T.C.F. Kamgar Sangh. This contractual liability would have to be deducted as expenditure while computing gross profits under the bonus formula. In the present reference the staff of T.C.F. would have to be excluded, as bonus in terms of the agreement has been paid to them, in full and final settlement for the year 1962-63. The company goes on to state as follows. It is denied that the wages of the workmen are inadequate. They are exceedingly liberal and fair and compare favourably with those in comparable concerns. The company denies the claim of the union that certain items should be added back to the gross profits. Bonus paid to supervisors and officers is legitimate expenditure incurred by the company. Finally the company says that the bonus of three months' basic wages paid to the workmen is fair and liberal. A similar written statement has been filed in reply to the statement of the other union.

6. It is common ground between the parties that this case is governed by the Payment of Bonus Act. The union has filed the following exhibits : Ex. U. 1 (bonus calculations) Exs. U. 2 and U. 10 (revised calculations); Ex. U. 14 (alternative calculations); Ex. U. 3 which is a letter from the managing director to Sri B. R. Pithawala dated 19 December 1963 that the directors had decided to give him bonus of Rs. 2,160; Ex. U. 4 which is a letter from the company dated 17 December 1960 and Ex. U. 5, a letter dated 23 December 1963 regarding the terms on which Sri Mango was appointed as managing director (this has little relevance to the present case); Ex. U. 6, which is an extract from the articles of association of the company before the amendment (this also has little relevance) Ex. U. 7 is a special resolution of the company dated 30 August 1961 by which a new article [Art. 95(a)] was substituted. It is as follows :

'Subject to the provisions of Ss. 309, 310 and 311 of the Act and with effect from 1 September 1960, a managing director or a director who is in the whole-time employment of the company shall, in addition to the remuneration payable to him as a director of the company under these articles, receive such additional remuneration as may from time to time be approved by the company in general meeting.'

7. Exhibit U. 8 is a statement of the total wages and bonus paid by the company to various classes of employees for the year Ex. U. 9 is a notice to the company to produce certain documents; Ex. U. 11 is the last balance sheet of T.C.F. Ex. U. 12 contains extracts from service agreements of the executives of the company; Ex. U. 13 is a list of executives. The company has produced the following exhibits; Exs. C. 1 (bonus calculations); balance sheet and profit and loss account of Rallis India, Ltd., agreement between T.C.F. Ltd., and T.C.F. Kamgar Sangh dated 25 April 1961 regarding wages, bonus, etc.; confidential Ex. C. 1 being the balance sheet of Rallis India, Ltd., after excluding T.C.F. Division accounts; confidential Ex. C. 2 which is the profit and loss account of the year of the T.C.F. Division; confidential Ex. C. 3 being the balance sheets and profit and loss account of T.C.F. Division for 1961-62 and 1962-63 before adjustments (this point about adjustments I shall be dealing with later). At Ex. C. 4 the company has filed calculations as per S. 34(2) without prejudice to its contention that the section is not applicable.

8. The main issue to be decided in this reference is regarding the company's contention that the profits of the T.C.F. Division which has been all along treated as a separate establishment for the purposes of bonus should not be included in the profits of Rallis India, Ltd., for the purposes of this reference. Section 3 of the Act is as follows :

'Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act :

Provided that where for any accounting year a separate balance sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then such department or undertaking or branch shall be treated as a separate establishment for the purpose of computation of bonus under this Act for that year, unless such department or undertaking or branch was immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus.'

9. The company has contended that a separate balance sheet and profit and loss account have been prepared and maintained for T.C.F. Division which is a pharmaceutical division; that immediately before the commencement of the accounting year for which this dispute has arisen it was not treated as part of the Rallis establishment for the purpose of bonus. This contention is obviously correct on the facts which are either admitted or proved but as it is strenuously contended by the union that it cannot be treated as a separate establishment, I deal with it. It is undisputed that T.C.F. was a separate limited company (though a subsidiary of Rallis) before May 1962. Before the amalgamation with T.C.F., Rallis did not have any pharmaceutical factory or make pharmaceutical product. As it was a separate limited company the entire accounts of T.C.F. were separate and distinct. After the amalgamation Rallis India has maintained separate balance sheet and profit and loss accounts for T.C.F. They have been produced for the] years 1962, 1963 and 1964. These separate accounts have been audited by a reputed firm of auditors, Lovelock & Lewis. On behalf of the union it is urged that after the merger there has been 'financial integrality' with Rallis India, Ltd. This contention is unsupported by any evidence and it is besides entirely irrelevant, for it is shown that a separate balance sheet and profit and loss account have been maintained for T.C.F. and it has been treated as a separate establishment for purposes of bonus and the proviso to S. 3 quoted above is applicable, the argument of financial integrality is irrelevant. That the establishment has been separately treated for the purposes of bonus is further supported by the following facts. There was a five-year agreement between T.C.F., Ltd., and the workmen of that company, dated 25 April, 1961. By the agreement the workmen were to be given bonus linked to turnover. The agreement further provided that :

'In the event of the business of this company being absorbed and/or amalgamated with that of any other company, the annual turnover will be calculated with reference to the list prices of goods sold by the company during the year in respect of T.C.F. products after making deductions for rejections, returns inwards, breakages, replacements, and additional discounts or commissions and difference in prices in respect of the company's products manufactured during the year less 47 1/2 per cent in respect of T.C.F. branded products with added to the sum so arrived the amount billed by the company in respect of services rendered for manufacturing or processing goods other than T.C.F. branded products less any credits for rejections, returns and alike.'

10. It is also evident from the various terms of the agreement that bonus was in lieu of profit bonus. According to the agreement the workers, having regard to the turnover for 1962-63, were entitled to and were given five months' basic wages as bonus for that year. When T.C.F. merged with Rallis India, Ltd., this contractual liability had to be carried out by Rallis India, Ltd., and bonus as stated above was paid. It is urged on behalf of the unions that the balance sheets and profit and loss accounts prepared for T.C.F. should not be relied on. As stated above, bonus has been paid on the basis of the income of T.C.F. to employees of the T.C.F. Division; the accounts of T.C.F. Division have been audited by a reputed firm of auditors and I see no reason for not accepting them. On behalf of the unions, reliance was put by Sri Buch on the decision, Legal Remembrancer v. A. K. Guha [I.L.R. 1937 Cal. 328]. The ratio of that case has no application to the present case. Sri Buch further urged that the presumption under S. 23 of the Act regarding audited accounts applies only to the overall accounts of a company certified under the Companies Act. This contention has no substance. Section 23 makes the presumption applicable to accounts audited by an auditor qualified to act as auditor of companies under the Companies Act. The presumption does not apply to the overall accounts of this company only. The companies Act does not require accounts of separate establishments of a company to be audited and filed before the Registrar of Companies. But when the proviso to S. 3 of the Act is applicable, it is evident that what the tribunal has to consider are the separate balance sheet and profit and loss accounts of the separate establishment, and where there are audited accounts by a qualified auditor, the presumption under S. 23 can be drawn in respect of those accounts and it is not necessary for the company to prove the accuracy of these accounts by affidavit or otherwise. There is however one point referred to by the union which deserves consideration. The audited profit of T.C.F., as merged in the profit and loss account of Rallis, shows a figure of Rs. 20 lakhs and odd while the audited profit and loss account showing the true profit of the T.C F. Division is shown to be Rs. 28 lakhs and odd. This difference is explained by the company as follows :

(a) In the consolidated profit and loss account the factory manager's emoluments were not charged to the T.C.F. Division as his services were seconded. They have been charged to the T.C.F. account as also the bonus paid to officers of T.C.F. Division who do not participate in bonus paid to the workmen of the T.C.F. under the agreement referred to above.

(b) Depreciation which did not feature in the consolidation account is separately charged.

(c) T.C.F. Division enjoys no overdraft facilities as these are provided only to a company. The interests incurred on T.C.F. Division is charged in the separate account.

(d) One-half of the pharmaceutical publicity expenses are charged in the separate account as was the practice prior to the merger.

(e) The price of goods transferred by the T.C.F. Division to the main company has been worked out on the pre-merger basis which is also the basis set out in the T.C.F. bonus agreement. This arrangement is reasonable and allows the manufacturing division as well as the selling division a fair margin of profit. The margin of discount allowed by T.C.F. to the selling division, is between 47 1/2 to 55 per cent from which dealers' commission, publicity expenses, depot expenses, administrative and selling expenses, amounting in all to about 35 per cent, are deducted, leaving a profit on the selling division of 12 1/2 per cent and upwards on turnover which is fair.

11. The calculations have all been made according to the practice before the merger, long before the Bonus Act was enacted. IT is pointed out on behalf of the company that in making the calculation of surplus for each undertaking separately, where the proviso to S. 3 applies, the provisions of the Act must be adhered to the such adjustment must be made as would show the correct gross profit according to the provisions of the Act, on which basis the profit and available surplus have to be worked out. If such adjustments are not made, the workers of one unit would be at a disadvantage compared to the workers of the other unit. I see no reason for not accepting the adjusted profit as certified by the auditors. In the course of the arguments for the union it was urged that the adjusted accounts were prepared some time in 1965 and the suggestion was that they were prepared for the purposes of this case. The company's representative offered to tender the adjusted accounts for 1964 and 1963 which were prepared on the same basis but the union representative objected to the production. Having considered the submissions of both sides, I accept the figure of Rs. 28,06,669 as the true profit of T.C.F. Division for the year and this will have to be deducted from the profit of Rallis for the purpose of calculations according to the bonus formula for the workmen of Rallis (excluding T.C.F. workmen). The company has filed its calculations as follows. From these the capital invested in T.C.F. is excluded and no return is claimed on that capital. The capital of the T.C.F. Division was taken as the purchase price paid by Rallis for T.C.F., Ltd., and this is deducted from the total equity capital of the company for the purpose of return on capital. The development rebate reserve on which return is claimed excludes the development rebate reserve of the T.C.F. Division :

Rs. Rs. 1. Net profit as per profit and ... ... ... 45,27,953 loss account 2. Add back provision for : (a) Bonus ... ... ... ... ... 8,67,263 (b) Depreciation ... ... ... ... 3,28,232 -------- 11,95,495 --------- 57,23,448 3. Les : (a) Depreciation ... ... ... ... 3,28,232 (b) Development rebate ... ... ... ... 17,470 (c) Direct taxes for the year, Income-tax and sales tax. 28,57,623 Surtax ... ... ... ... ... Nil. --------- 32,03,325 --------- 25,20,123 4. Other deduction : Dividend on preference shares (actual rate) ... 4,99,500 3 1/2 per cent on equity capital (Rs. 1,91,16,055) ... 16,24,864 --------- 21,24,364 --------- 3,95,759 5. Less 6 per cent on reserve : Development rebate reserve ... ... ... 76,989 General reserve ... ... ... ... ... 13,45,627 Balance of profit and loss account ... ... 3,23,563 Doubtful debts reserve ... ... ... ... 1,55,000 --------- 19,01,179 6 per cent thereof ... 1,14,070 -------- 6. Available surplus ... ... ... ... 2,81,689 7. Allocable surplus (60 per cent of available surplus) ... 1,69,013 Share of employees, percentage of annual wage bill ... 3.50 per cent

12. In the calculations filed on behalf of the workmen it is sought to add to the profits

(a) additional remuneration which has been paid to directors and higher executive drawing more than Rs. 1,600 per month at ascertain percentage of the profits according to the terms of contracts with them;

(b) contributions to the superannuation fund.

13. These items cannot be notionally added to the profits. The union's argument that they stand on the same footing as bonus and should be added cannot be accepted. In support of his argument Sri Bunch relied on a quotation from Palmers English Company Law at p. 650, which has no relevance to this proceeding. What is allowed by the Income-tax Act as legitimate expenditure cannot be disallowed under the bonus formula as laid down in the Act. Besides, Sch. II to the Act shows that only provision for bonus to employees has to be added to the profits. The term 'employees' is defined in S. 13 and does not include higher executives drawing over Rs. 1,600 per month.

14. I accept the calculations filed by the company as correct. The correct profit of Rallis, Ltd., and available surplus for the Rallis staff (excluding the T.C.F. staff) can be correctly ascertained by deducting the profit of the separate establishment of T.C.F. The balance sheet and profit and loss account of Rallis after excluding the T.C.F. Division have been correctly prepared and certified by the auditors as correct and I see no reason to doubt its correctness. From the calculations it is seen that the workmen concerned in this reference are entitled to 3.50 per cent of their total wages. Since they have actually been paid much more than this amount as bonus, they are not entitled to anything more.

15. Sri. Buch for the union alternatively urged that bonus should be allowed in proportion to the bonus for the preceding year under the provisions of S. 34(2) of the Act. To that sub-section is applicable only if there is an award or agreement relating to Rallis, Ltd. covering the year for which this bonus dispute has been referred to adjudications and as there is no such award or agreement that subsection does not apply. Sri Palkhiwala put the argument this way. Sub-section (2) must be interpreted in this way as a proviso to Sub-section (1) to harmonize with Sub-section (1); otherwise the section would be void being against the Constitution and violating the right to equality before the law and also being an unreasonable restriction on the fundamental right to carry on business and to hold property. The subject-matter of Sub-secs. (2) and (1) is the same. If not, all calculations according to the formula of the Act would be meaningless and a fair calculation of the available surplus so elaborately provided by the Act would be futile if in all cases we have to make alternative calculation of bonus in proportion to the bonus paid in the year which happens accidentally to be the base year. He pointed out illustrations of the absurdity if the construction urged by him is not followed. There may be two concerns making the same profit and liable to pay a certain amount as bonus under the formula of the Act. One may have had an overall settlement for reasons extraneous to bonus and it may have decided to pay some bonus in spite of meager profit of the base year. For all years to come it would be saddled in effect with liability to pay maximum bonus and would not be entitled to a fair return on capital or other prior charges laid down by the Act and it would not be entitled to pay only a fair bonus under the formula of the Act which has been evolved after prolonged labours of a Bonus Commission. Another concern which has paid no such bonus in the base year would be liable only to pay bonus according to the formula of the Act. One concern which may have paid an ex gratia bonus even on a nominal profit in the year which happens to be the base year according to the provisions of S. 34, would have to pay the maximum bonus in perpetuity. Such a construction would be irrational and such concerns would have to pay an amount of bonus not related to the principles of bonus contained in the Act but related to the accident of the particular total quantum of bonus paid in the base year. On the other hand, Sri Buch argued against this construction and urged that Sub-section (2) applies to the present case and there is nothing unconstitutional in the legislature providing for bonus according to whichever alternative formula is more favourable to the workers. When in the course of his arguments I asked Sri Palkhiwala whether some of the arguments advanced against the constitutionality of S. 34, if valid, would not also be valid even on the interpretation put by him, he said he was concerned to show that if the interpretation put by him was accepted, the section would not apply in this case. He stated that some of the arguments regarding invalidity of S. 34 would also apply even if the interpretation put by him were accepted, and that if the tribunal thinks fit, a notice may be given to hear the Attorney-General. It is not necessary for me in this case to decide the point whether the interpretation put on the section by Sri Palkhiwala or the contrary put by Sri Buch is correct, for on either interpretation the argument that Sub-secs. (1) and (2) are void as offending the right to equality before the law and as putting unreasonable restrictions on the right to carry on business would be applicable, if the argument is valid. One concern may have a capital, say, of rupees one crore and made a nominal gross profit of Rs. 5,000 without allowing for depreciation. It has by an overall agreement with the union paid an ex-gratia bonus of seven days' basic wages. In the next year for which there is bonus dispute the profit is still very small, say, Rs. 2,00,000, without providing for depreciation, much less for any return on capital. It must be a quantum of bonus forty times, i.e., 280 days' basic wages to all employees subject to a maximum of 20 per cent of the total wages, with a carry-over of a further 20 percent for additional bonus for the next four years while another concern in a similar financial position which has not paid any such ex gratia bonus would have to pay only the 4 percent minimum, with a right to set off of the bonus paid in spite of there being no available surplus, in the next four years. This would be an irrational result, penalizing in perpetuity a company which might have paid bonus ex gratia under an agreement in a year which happens accidentally to be the base year according to the Act. A concern may have, in the course of an overall agreement, made a five-year agreement in 1962 with the union to pay bonus for five years according to a certain rate or formula. The agreement in so far as it relates to bonus would be wiped out for the years 1964, 1965 and 1966. If the bonus agreed to is more than under the formula of the Act, the workers would get more, but if the bonus under the formula is less, they would get more according to the formula of the Act. Again the profit may have trebled in the year compared to the profit of base year, due to spending of additional capital on installation of automatic machinery. The number of workmen may have been halved. Still the concern must distribute three times the total amount of bonus to the reduced number of workmen (without regard to the priorities provided under the bonus formula of the Act or provision for return on additional capital, subject to a maximum of 20 percent of the total emoluments of the employees and the concern would have to carry over a further 20 per cent for bonus for the next four years. It has been the policy of the legislature embodied in various labour laws, a fundamental requirement for preserving industrial peace, that voluntary agreements between employers and unions should be respected and even encouraged. Unions are capable of looking after the interests of workmen. By this section not only settlements and contracts of service in regard to bonus but also awards are overthrown if the bonus paid or payable under them is less than under the formula of the Act, not if the bonus is more. Long-term settlements are also overthrown. There is much to be said for the view that S. 34 as enacted denies to employers equality before the law and is an unreasonable restriction on their rights to carry on business. Sri Palkhiwala conceded that the legislature has power to override agreements and awards and in doing so it does not exercise judicial powers, but the legislature cannot do so in a way as to interfere with the right of equal protection of the law or put unreasonable restrictions on the right to carry on business. Equal protection means the right to equal treatment in similar circumstances both in the privileges conferred and the liabilities imposed by the law.

16. A union may have agreed to a lower bonus in consideration of an overall agreement increasing wages or agreement not to retrench, yet the agreement is overthrown by this section. Rights finally determined by awards and disputes settled by agreement cannot be upset and reopened unless there are reasons which bear some rational relation to the object which the legislature had in view in enacting the Act. There is much to be said for the argument that not only the principle of equality before the law is infringed in Sub-secs. (1) and (2) of S. 34 but that the granting of an option in perpetuity to employees of bonus according to the mathematical proportion of the total quantum of bonus to the profit in the year which happens in the particular case to be the base year, and which may differ from concern to concern, according to provisions of Sub-section (2) without regard to the capacity of the concern to pay the amount, for the bonus in the base year might have been paid ex gratia in spite of very inadequate profits, or as a consideration for an overall settlement, or that the number of workmen may have been greatly reduced after the settlement, or any other change of circumstances such as large installations of machinery increasing the profits in proportion to the profits of the base year, rendering the mathematical proportion of bonus to bonus paid in the base year inequitable or absurd amounts to an unreasonable restriction on the right to carry on business. The Statement of Objects an Reasons appended to the Payment of Bonus Bill says that the Bill seeks to implement, with certain modifications, the recommendations of the tripartite Bonus Commission with some modifications. The Bonus Commission in its report at Para. 6.12 unanimously recommended as follows :

'Where industry-wise arrangements already exist, the parties are at liberty to renew the agreements with such modifications, if any, as may be agreed to by them. If the employers' and employees' association can agree to make or continue industry-wise arrangements on a basis acceptable to them, the forms proposed by us in our recommendations in the succeeding chapters will not apply. The formula proposed by us would also not apply during the currency of any industry wise or unit-wise agreement, except where such agreements stipulate that the formula recommended by the Bonus Commission should apply in modification or substitution of existing arrangements.'

17. In the Statement of Objects and Reasons to Clause 34 of the Bill (which has become S. 34), it is stated :

'In certain establishments, the employees are getting bonus under an award, agreement, settlement, or contract of service which would be higher than that payable under the Act. The clause seeks to safeguard the interest of such employees by providing that they would get bonus either on the existing basis or on the basis of the formula provided in the Act, whichever is higher.

Provision has also been made in the clause enabling the employer and the employees to enter into an agreement with regard to the payment of bonus under a formula which is different from that under the Act.'

18. But S. 34 appears to go far beyond this object stated. Nor is it clear what is the rational relation between the provisions of Ss. 34(1) and 34(2) and object sought to be achieved by the legislature. It might have been necessary before me to give a notice to the Attorney-General before deciding the serious points arising out in this case, but I am relieved of the necessity of giving such notice or giving a decision on the points, because even if the calculations are made on the basis that S. 34 is perfectly valid and applies to the present case, and that the workers are entitled in the alternative to a total amount of bonus according to the provisions of S. 34(2), then in the present case the workers would still not get more bonus than what has already been paid, as can be seen from the calculations filed by the company at Ex. C. 4 without prejudice to its contentions as regards S. 34. The calculations are correct and are as follows :

Base year 1961-62 Current year 1962-63 Rs. Rs. Rs. Rs. LAKHS LAKHS LAKHS LAKHS 1. Net profit as per profit and loss account ... 34.18 45.28 2. Add back provisions for : (a) Bonus to employees ... 5.98 6.99 (b) Depreciation ... 46.17 10.15 3.28 10.27 ----- ----- 3. Add back also subscription to ... political parties ... 0.31 ----- ------ Gross profits before tax ... 44.64 55.55 4. Less direct taxes ... 20.20 27.24 ----- ----- 24.44 27.81 Gross profit in base year ... ... ... ... ... 24.44 Gross profit in 1962-63 ... ... ... ... ... 27.81 Bonus paid to employees in base year ... ... ... 5.98 Therefore bonus payable to employees in 1962-63 per S. 34 of Payment of Bonus Act ... ... ... ... ... ... 6.88 Bonus already paid to above employees in 1962-63 ... ... 6.90 For the foregoing reasons the demand is rejected.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //