B.N. Banerjee, J.
1. The four petitioners and respondent No. 5 in Matter No. 287 of 1961 and the petitioners in Matter No. 38 of 1962 are Chartered Accountants and carry on business in partnership under the name and style of Lovelock and Lewes at No. 4 Lyon's Range, Calcutta.
2. There arose a dispute between the partnership business and its employees represented by their Union (respondent No. 2, in Matter No. 287 of 1961, which is again respondent No, 3 in Matter No. 38 of 1962) over payment of bonus. The respondent State Government referred the dispute to the First Industrial Tribunal for adjudication, the issue being couched in the following language :
'Whether the employees of Lovelock and Lewes are entitled to bonus? If so, what will be quantum of bonus for 1952/53 and 1953/54?'
3. The petitioners took two preliminary objections to the effect (i) that as persons practising as Chartered Accountants they do not carry on an industry within the meaning of the Industrial Disputes Act and that employees under Chartered Accountants are not workmen within the meaning of the said Act and as such, the Industrial Disputes Act has no application to the dispute and that the reference was incompetent; (ii) that the petitioners were debarred by the provisions of the Chartered Accountants Act from paying profit-sharing bonus to their employees, because that would amount to a professional misconduct under the Act. On the two preliminary objections raised, there were two preliminary issues framed to the following effect :
(i) Whether the dispute referred to is an 'industrial dispute'?
(ii) Is Messrs. Lovelock and Lewes debarred by any provision of the Chartered Accountants Act from paying bonus as claimed on the ground that that amounts to sharing fees/income with any person other than a member of the Institute or retired partner,
During the pendency of the Reference, the Union of the employees asked for production of certain documents. That prayer was disposed of by order No. 34, dated June 29, 1961, to the following effect:
'Mr. Mukherjee does not insist on the production of any of the documents mentioned in the affidavit. The documents that would be sufficient for the purpose are stated to be a statement by the firm of its profits for the year 1952-53, 1953-54 and accordingly the aggregate of the total basic wages of the clerical and the subordinate staff for a month for the year 1953-53, 1953-54 on the basis of which the firm has already paid Bonus for those years.
If the Association accepts the statement, no document such as mentioned in the Affidavit filed by the Association need be produced.
If on the other hand, the Association does not accept any of the statements or none of the statements, the Association may have to ask for production- of the cash books showing receipts for the year 1952-53, 1953-54 and also the salary Register for the clerical and the subordinate staff for the year 1952-53 and 1953-54-'
4. Pursuant to the aforesaid order, the petitioners filed their statement on July 25, 1961. The statement did not satisfy the employees and, there fore, the prayer for production of Cash Books and Salary Registers was renewed. The petitioners objected to the prayer. The nature of the objection and the manner in which the same was disposed of will appear from the following quotation from Order No. 37, dated August 1, 1961 :
'Mr. Ginwala raises now the question that the affidavit filed by the Union for discovery of the documents is not in proper form and further that the Tribunal's jurisdiction to entertain this reference being questioned by Messrs. Lovelock and Lewes it is not open to the Tribunal to make any order calling upon the employees to produce the books in question without deciding first the question of jurisdiction. I pointed out to Mr. Ginwala that the same question had been decided against Messrs. Price Waterhouse Peat and Co., which is also a firm of Chartered Accountants, exactly like Messrs. Lovelock and Lewes and in view of that decision the question need not be gone into afresh in this case, particularly when this reference is now 6 years' old already. Of course, as that decision is not legally binding on this firm it can technically insist on the question being considered afresh. The Tribunal has hardly any option in the circumstances but to pass an order fixing a date for the hearing of the preliminary issue regarding jurisdiction, although this inevitably means more delay in the disposal of the reference. Mr. Ginwala's objection to the defective character of the affidavit for production of certain documents does not appear to me at all tenable, in view of the fact that Rule 12 of Order 11 of Civil Procedure Code does not prescribe an affidavit as an essential for a prayer to the Court for production of documents by the other side. In this case there is no dispute that the books asked for on behalf of the Union are maintained by and kept in the custody of the employers. In their affidavit for documents also it is not the case of the firm that the books in question are not maintained by it. They have however objected to the production of the cash books on the ground that the firm receives and disburses money on behalf of its clients and as these receipts and disbursements are recorded in the Cash Books and are of a confidential nature, their disclosure would amount to a gross breach of professional etiquette, and further that receipts and payments cash books have no relevance to the present adjudication. As regards the salary Registers for the clerical and subordinate staff for the years 1952-53 and 1953-54 also they claim that those registers apart from being of a confidential nature have no relevance to the present adjudication. Thus there is really no objection as to the defective character of the affidavit of the Union. The question however is whether the firm should be called upon to produce these documents in view of its objections to produce them. As one of the grounds of objection raises the question of privilege for the firm it is open to the Tribunal to inspect these registers under Rule 19 Sub-rule 2 of Order 11 of Civil Procedure Code before making an order. As regards the other objections namely whether the documents are relevant or not for the Union, prima facie they seem to be relevant because the main issue in the case is bonus but the Tribunal will not call upon the firm just yet to produce the documents until the question of jurisdiction is disposed of one way or the other. Orders will be passed on this matter after the question of jurisdiction has been disposed of. To 25-9-61 for hearing on the question of jurisdiction.'
5. On September 5, 1961, the Labour Union of the employees filed an affidavit calling for certain documents. That matter was disposed by Order No. 40, dated September, 8, 1961, in the following manner :
'Mr. Ghose says that the Tribunal is not entitled to pass an order compelling the firm to produce the documents without deciding the question of jurisdiction, or in other words according to him if the question of jurisdiction cannot be decided without the documents it must be decided without the documents. That seems to be absurd. He also submits that the Firm does not maintain 4 kinds of Bill Register as specified in paragraph 2 of items 3 to 6 of the Association's affidavit but only 2 Bills Registers. If that is so, the Firm will produce whatever Bill registers it has for the years 1052-53 and 1953-54. Mr. Ghose further argues that in view of the order No. 34, dated 20th June, 1961, the Firm should not be directed to produce such documents as were not insisted on behalf of the Association by its Advocate Sri Mukherjee. Mr. Das Gupta contends on the other hand that Mr. Mukherjee at that time agreed to do without certain documents' on the supposition that after the derision of the question of jurisdiction in the case of Messrs. Price Water house Peat and Co. and its employees, Messrs. Lovelock and Lewes will not insist on a fresh decision of that question because both the firms carry on the same kind of professional work. It was also my impression that the representative of the Firm had given me to understand that he would not insist on a fresh decision of this question after the decision of the question in the case of Price Water-house Peat and Co. In any event the Firm now wants to have a fresh decision and that is why the Association is entitled to inspect the documents in the custody of the Firm which they consider relevant for their purpose. Let the Firm allow the Association an inspection of the documents mentioned in paragraph 2 of its affidavit subject only to this that instead of 4 Bill registers mentioned in item Nos. 3, 4, 5 and 6 of paragraph 2 only a bill registers which are maintained by the Firm for the years 1952-53 and 1953-54 should be allowed to be inspected by the Association. The Firm may allow inspection of these registers to the authorised representative of the Association in its own office at a time to be settled between the Firm's representative and the representative of the Association as early as possible and the inspection must be completed within a week and a report to that effect will have to be submitted to the Tribunal and if after inspection the Association thinks that any of the documents inspected should be called for from the Firm an application to that effect must be filed with notice to the Finn at least one week before the hearing i.e., by the 18th September, 1961 at the latest.'
6. The petitioner firm wanted a review of the order. That prayer, however, was dismissed by order No. 41, dated September 15, 1961.
7. Again on September 18, 1961, the Tribunal passed the following order :
'As the Firm is reported not to have allowed inspection of the documents, which the Union was asked to inspect at the Firm's Office, the documents must be produced by the Firm at the hearing.'
8. Against orders No. 40, 41 and 42, respectively dated the 8th, the 9th and 18th September, 1961, as also against the reference made on the question of bonus the petitioners moved this Court and obtained a Rule being Matter No. 287 of 1961.
9. During the pendency of that Rule, the preliminary objection as to whether petitioners, in their business, did carry on an industry was decided, by an order dated October 11, 1961, against the contention of the petitioners and following its own award in the case of Price Waterhouse Peat and Co. (which is the subject-matter of the decision of this Court in Rabindra Nath Sen v. First Industrial Tribunal W.B., Matter No. 288 of 1961 : : AIR1963Cal310 the Tribunal held that the petitioners, in their business, were really carrying an industry. The petitioners moved against that order and obtained A Rule being Matter No. 38 of 1962.
10. Both the Rules, being Matter No. 287 of 1961 and 38 of 1962, were heard together by consent of parties.
11. I propose to take up Matter No. 38 of 1967 first of all, because if the Tribunal was not right in holding that the petitioners, in their business, were carrying an industry, then the reference itself becomes bad and the other points raised by the petitioners need not be decided.
12. It is not disputed that in addition to auditing work, the petitioners, in their business, carry on three other kinds of work, namely, taxation work, liquidation work and Secretarial work. The auditing work is, however, the main business of the petitioners and the other types of works constitute a small percentage of their business. They employ about 283 employees, other than menial staff. Their business is organised and their employees are utilised in the same manner as done by Price Waterhouse Peat and Co., which I have already noticed in Matter No. 288 of 1961 : AIR1963Cal310 Rabindra Nath Sen v. First Industrial Tribunal.
13. The point as to whether the business of a Chartered Accountant, of the type carried out by the petitioners, constitutes an industry has already been decided by me in Matter No. 288 of 1961 : AIR1963Cal310 (Supra) and I need not separately deal, in this judgment, with the point, which is already covered by that judgment. I hold, as I did in the other matter, that the business of the petitioners is an industry.
14. I need however, refer to an additional argument which was canvassed in this Rule. It was contended by Mr. Ginwala, learned-Advocate for the petitioners, that even if the petitioners were carrying on an industry (which however, he strongly disputed) it would not be possible for the petitioners to pay any profit-sharing bonus to the employees because such sharing of profit was prohibited under item 2, Part one of the First Schedule to the Chartered Accountants Act, 1949. The said Item reads as follows :
'A Chartered Accountant in practice shall be deemed to be guilty of professional misconduct if he
(2) pays or allows or agrees to pay or allow, or indirectly, any share, commission or brokerage, in the fees or profits of his professional business, to any person other than a member of the Institute or a partner or a retired partner or the legal representative of a deceased partner.
* * * *
15. It is clear from the written Statement of the employees union that the claim of the employees is limited to bonus out of profit. Relevant paragraphs in the said written statement read as follows :
'The Company is one of the biggest Chartered Accountant's Firm, not only in India but in the entire Eastern Asia. The Company has been earning huge profits and the employees are greatly contributing by their labour in earning the said huge profits of the Company. But the Company, on various baseless pleas, is depriving the employees of their legitimate claim of Bonus out of the profits.
The employees have been demanding bonus out of profit year after year. The employees and the Union demanded the bonus for the years 1952-53 and 1953-54 in those years and thereafter but the Company has so long been avoiding payment on various pretexts.
It is submitted that in the years 1952-53 and 1953-54 the Company has earned huge profits. The employees can reasonably claim considerable amount as bonus out of the said profits. The Union demanded bonus out of profit equivalent to 3 months' salary or more for each year on the established principles. On the profits earned by the Company as can be gathered, the employees can legitimately claim 6 months' salary as bonus out of profit for each year, if not more.'
16. This argument, in my opinion, is one of great interest, although somewhat premature at this stage, because the Tribunal has not as yet pronounced its opinion on this argument. Yet then I propose to consider the argument because the point was taken by way of preliminary objection and the entire reference matter is going to be heard on the merits, although the Tribunal has not yet disposed of this branch of the preliminary objection.
17. The word 'bonus' has acquired a special meaning in the sphere of industrial relations. It is classified amongst the methods of wage payment, an addition to the contractual wage, and is stimulated by the theory of social justice that workers, who labour to earn profit, must share with their employers the fruits of their common enterprise (vide Munir Mills Co., Ltd. v. Suti Mill Mazdoor Union Kanpur, (S) : (1955)ILLJ1SC ). Further explaining the concept of 'bonus' the Supreme Court observed in Lipton Ltd. v. Its Employees, : (1959)ILLJ431SC :-
'It has been judicially recognised that bonus is not deferred wage and justification for a demand of bonus as an industrial claim arises when wages fall short of the living wage and the industry makes sufficient profits to which both labour and capital have contributed x x x. It has also been said that bonus is a temporary or partial filling up of the gap that exists between the living wage and the actual wage paid: where the goal of living wage has been attained bonus is a mere cash incentive to greater efficiency and production, but where an industry has not the capacity to pay living wage or its capacity varies or is expected to vary from year to year so that the industry cannot afford to pay a living wage, the payment of bonus may be looked upon as a temporary satisfaction, wholly or in part, of the needs of the employees.'
18. Again in the case of Associated Cement Co., Ltd., Bombay v. Their Workmen, : (1959)ILLJ644SC , while laying down a formula for calculation of bonus, the Supreme Court observed that after deduction from the gross profit of depreciation charges, income-tax dues, a return on paid up capital and working capital, and rehabilitation charges the available surplus should be ascertained and the claim of three parties must share this available surplus, namely, labourer's claim for bonus, industry's claim for expansion and the shareholders' claim for dividend, by way of return on capital invested by them.
19. Then again there is the case of Central Bank of India v. Their Workmen, : 1SCR200 .
In that case the Supreme Court was called upon to consider the repercussion of Section 10 (i) (b) (ii) of the Banking Companies Act (prior to its amendment in 1956), which prohibited the employment by a Banking Company of any person whose remuneration or part of whose remuneration took the form of commission or of a share in the profits of the company, on the liability of the Company to pay profit-sharing bonus to its employees. The Supreme Court observed:-
'There can be now no doubt, however, that profit bonus, in industrial sense in which we now understand it, is a share in the profits of the company; it is labour's share of the contribution which it has made in the earning of the profits. The two grounds on which it has been contended that bonus is not a share in the profits are (i) that it is not a fixed or certain percentage of the available surplus of profits and (2) it partakes of the nature of a contingent, supplementary wage * * We do not think that either of these two grounds is valid. The first ground arises out of a confusion between the expression takes the form of share in the profits' and the expression 'profit sharing' used in a narrow technical sense. It is undoubtedly true that the bonus formula does not lay down any fixed percentage which should go to labour out of the available surplus. The share of labour will depend on a number of circumstances; but once the amount which should go to labour has been determined, it is easy enough to calculate what proportion it bears to the whole amount of available surplus of profits. There is thus no difficulty in identifying bonus as a share in the profits of the company. It is true that the International Congress on profit-sharing held in Paris in 1889 adopted the definition of 'profit sharing' in the technical, narrow sense. That definition said that profit sharing was 'an agreement (formal or informal) freely entered into, by which the employees receive a share, fixed in advance, of the profits' (see Encyclopaedia of the Social Sciences, Seligman and Johnson, Vol. XII. p. 487). But that is not the sense in which bonus has been understood in our industrial law, and it is worthy of note that Section 10 of the Banking Act does not use the technical expression 'profit sharing' but the more general expression 'takes the form of a share in the profits etc'. We are unable to hold that this general expression has a technical meaning in the sense that the share in profits must be fixed in advance, as in technical profit-sharing; such a meaning would, without sufficient reason, exclude from its purview schemes under which the workers are granted regularly a share in the net profits of industry, but in which the share to be distributed among the workers is not fixed in advance but is decided from time to time on ad hoc basis by an independent authority such as an industrial court or tribunal.
The second ground also appears to us to be equally untenable. Bonus in the industrial sense as understood in our country does come out of the available surplus of profits, and when paid, it fills the gap, wholly or in part, between the living wage and the actual wage. It is an addition to the wage in that sense, whether it be called contingent and supplementary. Nonetheless, it is labour's share in the profits, and as it is a remuneration which takes the form of a share in profits, it comes within the mischief of Section 10 of the Banking Act. It may be asked why should the legislature seek to deprive bank employees, who are not on the managerial or administrative staff, of their industrial claim to bonus when they contribute to the prosperity of the banks? This really is a question of policy on which we are not permitted to speculate. On the one side there is the necessity for safe-guarding the integrity and stability of the banking industry, and on the other side there is the claim of employees for a share in the profits. Which claim has a greater urgency at a particular time is really a matter for the legislature to say. We may refer here by way of contrast to Section 314 of the Insurance Act, 1938. That section is in terms similar to Section 10 of the Banking Act, but has some marked differences. Firstly, it specifically mentions bonus, along with a share in profits, in Clauses (b) and (c) of Sub-section (1); secondly, it has a proviso which says inter alia that nothing in Sub-section (1) shall prohibit the payment of bonus in any year on a uniform basis to all salaried employees etc., or such bonus which in the opinion of the Central Government is reasonable having regard to the circumstances of the case. This merely shows that it is for the legislature to decide how to adjust the claim of employees with the safety and security of the business in which the employees are in employment,'
20. Mr. Ginvala placed strong reliance on the last mentioned case and argued that a Chartered Accountant was prohibited from paying, directly or indirectly, any share, commission or brokerage in the fees or profits of his professional business to any person, other than a member of the Institute or a partner or a retired partner or a legal representative of a deceased partner. He further argued that the words 'any person' were wide enough to include salaried employees in the office of a Chartered Accountant. This, he argued, was all the more so because they were not expressly exempted from the operation of item 2, Part One, Schedule I, such as partners were. He also argued that inasmuch as payment of any share in the profits would also include payment of profit-sharing bonus and since such a payment would amount to professional misconduct on the part of a Chartered Accountant, he must not be compelled to make such a payment.
21. Unlike the provisions in Section 31-A of the Insurance Act, there is nothing in the Chartered Accountants Act, which relaxes the prohibition as to profit-sharing in the matter of payment of bonus to salaried employees of Chartered Accountants. It is true that in the Chartered Accountants Act there is no provision in pari materia with Section 10 of the unamended Banking Companies Act but yet then there is a provision making the payment of a share in the profit a professional misconduct with Chartered Accountants. The effect of this must be seriously considered. It is useless to speculate upon the reason why in cases of certain industries the Parliament chooses to deprive the workers of their claim for bonus (as was once done in the case of Banking industry). On the one hand there is the necessity of safeguarding the integrity and stability of a business and on the other hand there is the claim of the employees for a share in the profits. Which of the two should be emphasised in a business or profession, at a particular stage of evolution of the society, is for the Parliament to lay down. If the law on the point does not permit payment of profit-sharing bonus, then considerations of social justice should not weigh with the Tribunal in the matter of payment of bonus to the employees in a particular industry.
22. I need not probe further into the matter, because the point has not, as yet, been decided by the Tribunal in one way or the other. All that I need observe at this stage is that the Tribunal should decide the aforesaid branch of the preliminary objection first of all, before it takes up for consideration the claim as to bonus on its merits. In deciding the preliminary objection the Tribunal should bear in mind the observations made hereinbefore.
23. For the reasons aforesaid the Rule in Matter No. 38 of 1962 must be discharged.
24. I now take up for consideration Matter No. 287 of 1961. It is now settled law that is the matter of arriving at the figure of profit from which bonus is to be paid to the employees, if any, the onus lies with the employer to establish the same by relevant and acceptable evidence. (Vide Khandesh Spinning and Weaving Mills Co., Ltd. v. Rashtriya Girni Kamgar Sangh, : (1960)ILLJ541SC : The Management of Trichinopoly Mills Ltd. v. National Cotton Textile Mill Workers' Union, AIR 1960 SC 1603; Patland Turkey Red Dye Works Co., Ltd. v. Dyes and Chemical Workers Union, : (1960)ILLJ548SC ; Cannanore Spinning and Weaving Mills Ltd. v. Secretary Cannanore Spinning and Weaving Mills Workers' Union, AIR 1961 SC 1194. Since the workers were not satisfied with the statement filed by the petitioners, the Tribunal was right in considering the desirability of the production of supporting cash books and other documents.
25. The objections takes by Mr. Ginwala to the order for production of documents were twofold:
(i) some of the documents contained confidential informations, the disclosure whereof would amount to misconduct on the part of Chartered Accountants;
(ii) the affidavit for production of the documents was not in form.
So far as the first objection is concerned the Tribunal has merely directed production of the documents in Court reserving to itself, under Order 11 Rule 19 (2) of the Code of Civil Procedure, the liberty of decision on the question of privilege as claimed by the petitioners. Therefore, the first objection has no force. The Tribunal overruled the other objection with the observation that under Order 11 Rule 12 of the Code of Civil Procedure an affidavit was not essential for a prayer for production of documents. The Tribunal was not wrong in the observation.
26. Consequently, I hold that it is not necessary to interfere with the order made by the Tribunal at this stage. I, however, make it clear that the petitioners may raise the question of privilege, after the documents are produced, when the Tribunal is directed to consider the claim as to privilege,
27. The Rule in Matter No. 287 of 1961, is therefore discharged.
28. There will be no order as to costs, in any of the two Rules.