Judgement

K. N. WANCHOO J. This is an appeal by special leave against the award of the Industrial Tribunal, Bombay, in a dispute between the Tata Oil Mills Co. Ltd., Bombay (hereinafter referred to as the company) and its workmen, in the matter of profit bonus for the year 1955-58: The dispute arose over a demand made by the workmen for payment unconditionally as bonus for the year 1955-56 of a sum equivalent to four months wages/salary for all employees drawing wages/salary of less than Rs. 500/ per mensem. This dispute was referred to the Industrial Tribunal by the Government of Bombay by order of dated 18-6-1957. The company already paid 2 1/2 months basic wages as bonus to its workmen and the real dispute was thus only about the remaining bonus for a month and half.

2. The case of the workmen was that the company had made record profit during the year and declared a dividend of 12 per centum free of income-tax, the workmen were getting much less than the living wage and the dearness allowance was not sufficient to fill the gap and, therefore profit bonus at the rate of four months basic wages should be granted. The company, on the other hand, contented that it was paying graded scale of wages with annual and biennial increments and had already paid profit bonus for 2 1/2 months. It was not possible for the company to pay more than that as bonus, as the available surplus according to the Full Bench formula did not justify it. It was also pointed out that though the company started as far back as 1917, the share-holders began to get dividends only from 1940, and, therefore, a dividend of 12 per centum free of income tax was in the circumstances not high. The company also claimed that in making calculations for the purposes of the Bench formula certain items of extraneous income should not be taken into account. Next it claimed that a profit of Rs. 3 lacs appearing in the accounts due to the change in the method of valuation was no real profit due to the efforts of labour and should not be taken into account in arriving at the available surplus. Lastly, it also claimed that it was entitled to 4 per centum interest on the working capital , including the amount in the depreciation fund.

3. The Industrial Tribunal disallowed the claim of the company on all these three points and after making relevant calculations came to the conclusion that there was a sufficient surplus available to permit the grant of bonus for 31/2 months calculated on basic wages and therefore awarded the same. The company thereupon applied for special leave to appeal, which was granted; and that is how the matter has now come up before us for decision.

4. We shall first take the question of erroneous income. Six items were sought to be excluded by the company as extraneous income, and they were these:

In lacs of Rs.

(i) Income earned by way of rent, light and power ... 0.24

(ii) Estates Revenue ... 0.08

(iii) Profits on sale of empty barrels 0.89

(iv) Excess provision for expenses in the previous year ... 0.31

(v) Refund of income-tax on revision of Cochin assessment of Excess Profits Tax ... 0.49

(vi) Sale proceeds of tin cans, scraps, logs, planks, gunnies & c. ... 2.11

Total ... 4.12

The Tribunal rejected the claim with respect to all these items, though in the judgment it mentioned only items (i), (ii), (iii) and (vi) as those in dispute. Apparently, items (iv) and (v) were not in dispute before it; but while making calculations, it seems to have lost sight of this and disallowed the claim with respect to these two items also. Learned counsel for the respondents appearing before us has stated that the claim with respect to items (iv) and (v) was conceded by the workmen before the Tribunal and it seems that by over-sight these items were not excluded by it. He fairly concedes that these two items may be excluded from consideration in making calculations for arriving at the available surplus. We are thus left with four items, which were disallowed by the Tri