Judgement

P. B. GAJENDRAGADKAR J.: This appeal by special leave arises from a bonus dispute between the Indian Oxygen and Acetylene Co., Private Ltd., (hereafter called the appellant) 1115 and its workmen, the relevant years for the bonus claim being 1952-53 and 1953-54. This claim was made separately by the workmen excluding the members of the clerical staff as well as by the clerical staff and the two claims, thus made were referred by the Bombay Government to the Industrial Tribunal for its adjudication. The claim raised by the workmen excluding clerical staff was numbered as Ref. (I. T.) No. 40 of 1956, while that made by the clerical staff was numbered as Ref. (I. T.) No. 44 of 1956. Both categories of workmen will hereafter be described as the respondents in this judgment.

2. The appellant is a private limited company incorporated in 1935 and it has its head office at Calcutta. Its business is to manufacture and sell oxygen and acetylene. It is a subsidiary" of the British Oxygen Co. Ltd. It sells its products to the hospitals & nursing homes and in large quantities to industrial concerns for welding, cutting and blasting operations. It voluntarily paid bonus equal to two months basic wages for both the years in dispute; but the respondents were not satisfied with the said payment and they made a claim for 1/3 of their total earnings for the two respective years. That is how the dispute arose between the parties.

3. It appears in evidence that all the shares of the appellant (excepting two or three held by nominee share-holders) are held by the British Oxygen Co. Ltd. Evidence also shows that the appellant has been prospering and has been expanding at a rapid rate. It has capitalised its reserves in 1940, 1941, 1942, 1945, 1946, 1947&1949 with the result that the major portion of its capital is made up of bonus shares. It has made good profits for the year ending 30-9-1953 as well as for the year ending 30-9-1954. There is also no doubt that a large gap exists between the actual wages paid by it to its workmen and the living wage. It is on these allegations that the respondents made a claim for bonus of 1/3 of their total earnings.

4. The appellant pleaded that it was paying good wages to the respondents and that under the formula the respondents were not entitled to claim any additional bonus for the relevant years. In fact, according to the appellant, if the formula was properly worked the bonus already voluntarily paid by it to the respondents could not have been claimed by them.

5. The tribunal has, however, rejected the appellant s case and has directed it to pay to the respondents bonus at the rate of 1/4 of the annual basic wages for l952-53 and 1/3 of the said wages for 1953-54 (less the bonus already paid for these years). It has also directed that in calculating the amount of bonus overtime and dearnness and other allowances should be excluded. This award has been made subject to the two conditions specified by it. It is the correctness of this award that is challenged by the appellant before us.

6. The first point which the appellant has urged is against the finding of the tribunal that it was not bound to give effect to the Full Bench formula. In determining the available surplus the tribunal has taken the view that the formula was not binding on it and that on considerations of social justice to which it has referred it was open to it to reject the claim of the appellant for rehabilitation, This question has been considered by us at length in the case of Associated Cement Companies Ltd., Bombay v. Their Workmen, Civil Appeals Nos. 459 and 460 of 1957, D/- 5-5-1959, and we have held that in dealing with claims for bonus industrial tribunals must give effect to the formula. We have also indicated how the calculations under the formula should be made in such disputes. In view of the said decision we must hold that the tribunal was in error in not granting to the appellant its claim for rehabilitation.

7. According to