Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1959 Supreme(SC) 107

SUPREME COURT OF INDIA
8th May, 1959.
B.P. SINHA, P.B. GAJENDRAGADKAR AND K.N. WANCHOO, JJ.
M/s. Shalimar Works Limited, Appellants
Versus
Their Workmen, Respondents.
Advocate Appeared
Mr. N. C. Chatterjee, Senior Advocate (M/s. S. N. Mukherjee and B. N. Ghosh, Advocates, with him), for Appellants in C. A. No. 317 of 56 and Respondent No. 1 in C. A. No. 318 of 56; Mr. A. V. Viswanatha Sastri, Senior Advocate (M/s. A. K. Dutt and B. P. Maheshwari, Advocates, with him), for Appellants in C. A. No. 318 of 56 and Respondents in C.A. No. 317 of 56.

Advocates:
A.K.DATTA, A.V.VISHWANATHA SASTRI, B.N.GHOSH, B.P.MAHESHVARI, N.C.CHATTERJI, S.N.MUKHERJEE

The Supreme Court interpreted Sections 33 and 33-A of the Industrial Disputes Act, 1947, and held that the order of discharge of April 6, 1948, was a breach of S. 33, but the workmen did not avail themselves of the remedy under S. 33-A and the reference was made after an unreasonable length of time and in a vague manner. Therefore, the Appellate Tribunal should not have ordered the reinstatement of even the fifteen workmen.

Headnote:
INDUSTRIAL DISPUTES - Profit sharing bonus - Reinstatement of workmen - Interpretation of Industrial Disputes Act, 1947 - Ss. 33, 33-A.
Fact of the Case:

Dispute between Messrs. Shalimar Works Ltd. Howrah and its workmen represented by two unions over profit sharing bonus and reinstatement of 250 old workmen. Industrial Tribunal revised the profit sharing bonus scheme and ordered reinstatement of 15 workmen. Labour Appellate Tribunal upheld the award with a modification. Both parties appealed to the Supreme Court.
Finding of the Court:

The Supreme Court held that the revised profit sharing bonus scheme was acceptable to both parties and deleted the condition added by the Appellate Tribunal. The condition of minimum attendance for 100 days for entitlement to any bonus at all and of minimum attendance of 275 days for entitlement to full bonus was reasonable. Bonus for the years 1951 and 1952 should have been ordered to be paid according to the revised scheme. The order of discharge of April 6, 1948, was a breach of S. 33 of the Industrial Disputes Act, 1947, but the workmen did not avail themselves of the remedy under S. 33-A and the reference was made after an unreasonable length of time and in a vague manner. The Appellate Tribunal should not have ordered the reinstatement of even the fifteen workmen. The company was prepared to reinstate four workmen out of human considerations.
Issues: Whether the revised profit sharing bonus scheme was acceptable to both parties? Whether the condition of minimum attendance for 100 days for entitlement to any bonus at all and of minimum attendance of 275 days for entitlement to full bonus was reasonable? Whether bonus for the years 1951 and 1952 should have been ordered to be paid according to the revised scheme? Whether the order of discharge of April 6, 1948, was a breach of S. 33 of the Industrial Disputes Act, 1947? Whether the workmen availed themselves of the remedy under S. 33-A? Whether the reference was made after an unreasonable length of time and in a vague manner? Whether the Appellate Tribunal should have ordered the reinstatement of even the fifteen workmen?
Ratio Decidendi: The Supreme Court held that: (i) The revised profit sharing bonus scheme was acceptable to both parties and the condition added by the Appellate Tribunal was deleted. (ii) The condition of minimum attendance for 100 days for entitlement to any bonus at all and of minimum attendance of 275 days for entitlement to full bonus was reasonable. (iii) Bonus for the years 1951 and 1952 should have been ordered to be paid according to the revised scheme. (iv) The order of discharge of April 6, 1948, was a breach of S. 33 of the Industrial Disputes Act, 1947, but the workmen did not avail themselves of the remedy under S. 33-A and the reference was made after an unreasonable length of time and in a vague manner. (v) The Appellate Tribunal should not have ordered the reinstatement of even the fifteen workmen.
Final Decision: The Supreme Court allowed the company's appeal with respect to the remaining eleven workmen who had been ordered to be reinstated by the Appellate Tribunal. The order of the Appellate Tribunal will stand with respect to the four workmen named above in view of the company's willingness to take them back. The appeal of the workmen on the question of reinstatement fails and is hereby dismissed.

Judgement

K. N. WANCHOO J. : These are two appeals by special leave against the same decision of the Labour Appellate Tribunal of India in a dispute between Messrs. Shalimar Works Ltd. Howrah (hereinafter called the company) and its workmen represented by two unions (hereinafter called the workmen). Appeal No. 317 is by the company while Appeal No. 318 is by the workmen. We shall dispose them of by one judgment.

2. There was a dispute between the company and its workmen on a number of matters and it was referred to the Sixth Industrial Tribunal for adjudication by the Government of West Bengal. Only two matters now survive out of the many referred to the Tribunal, namely, (1) profit sharing bonus and (2) reinstatement of 250 old workmen.

3. We shall first deal with the question of profit sharing bonus. It appears that the company had a profit sharing bonus scheme in force on the following lines. It provided that after making certain deductions, if the remaining profit was between Rs. 1,50,000 and Rs. 1,99,999, the workmen would be entitled to quarter of a month s average basic pay as bonus. When the remaining profit was between Rs. 2.00 lacs and Rs.2,49,999 the bonus went up to half of a month s average basic pay. When the remaining profit was between Rs. 2,50,000 and Rs. 2,99,999, the bonus was to be three quarters of a month s average basic pay and when the remaining profit was Rs. 3 lacs or more the bonus was to equal one month s basic pay. No bonus was to be paid if the profit was less than Rs. 1,50,000. There were provisions that the full bonus would be paid to a workman who had attended 275 days in a year (inclusive of holidays and leave with pay) while those with less attendance were to be paid proportionately with the condition that if the attendance of any workman was less than 100 days he would be entitled to no bonus. The workmen wanted this scheme to be revised and the main revision they desired was that the bonus should begin with a profit of Rs. 25,000 after the usual deductions when it would be one week s wages and should go on increasing till it came to three months wages for profit above Rs. 1 lakh and up to Rs. 3 lacs; thereafter it should increase further at the rate of 21 days wages for each lakh over 3 lakhs. This was opposed by the company, though the company agreed to a change in the quantum of bonus when profit after deductions was Rs. 3 lakhs or above. In the scheme in force, the bonus was equal to one month s basic pay when the profit was Rs. 3 lakhs or above, with no further increase whatsoever be the profits. The company agreed to revise this term and suggested that when profit was-

(i) between Rs. 3 lakhs to Rs. 4 lakhs, bonus should be four weeks wages;

(ii) above Rs. 4 lakhs up to Rs. 5 lakhs, bonus should be five weeks wages;

(iii) above Rs. 5 lakhs, it should be six weeks wages.

4. The Industrial Tribunal did not accept fully the contentions of either party in this connection, though it varied the scheme in force in certain particulars. After the variation the scheme was as below:

(i) from Rs. 80,000 to Rs. 1,99,999, bonus at the rate of one week s average basic pay;

(ii) from Rs 2.00 lakhs to Rs. 2,49,999, bonus at the rate of half of a month s average basic pay;

(iii) from Rs. 2.50 lakhs to Rs. 2,99,999, bonus at the rate of three-quarter of a month s average basic pay;

(iv) from Rs 3.00 lakhs to Rs 4.00 lakhs, bonus at the rate of four weeks average basic pay;

(v) from above Rs. 4.00 lakhs up to Rs 5.00 lakhs, bonus at the rate of six weeks average basic pay; and

(vi) from above Rs. 5.00 lakhs, bonus at the rate of two months average basic pay.

5. For remaining profit after the usual deductions-

The Industrial Tribunal also accepted 275 days attendance for earning full bonus and proportionate bonus when the attendance fell below 275 days and the minimum of 100 days attendance for earning any bonus at all. It also held that bonus for the years 1951 and 1952 should be paid at the existing rat

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