Judgment

GAJENDRAGADKAR J. : These two appeals arise out of a demand for bonus made against the appellants by their workmen for the year 1953-54. The Associated Cement Companies Ltd., Bombay, the Cement Marketing Company of India Ltd., Bombay and the Concrete Association of India, Bombay, were faced with a demand of their workmen employed in their offices at Bombay for bonus equivalent to seven months basic wages with dearness allowance. The industrial dispute arising out of this demand was referred by the Government of Bombay for adjudication before the Industrial Tribunal, Bombay, under S. 10 of the Industrial Disputes Act and it was numbered I. T. No. 10 of 1956. The Associated Cement Companies Ltd., Dwarka Cement Works, Dwarka, was similarly faced with a demand of its workmen for bonus equivalent to 50 per cent. of total earnings or six months total earnings. This dispute was referred to the same tribunal and was numbered I. T. No. 13 of 1956. By consent of parties both the references were heard together and evidence was recorded and documents tendered in the first reference. By its award delivered on 30-11-1956, the tribunal directed the companies to pay their workmen drawing a basic pay or wages up to Rs. 500 per month bonus equivalent to 1/3 of their basic wages or pay (less bonus already paid for the year 1953-54) subject to the conditions specified in the award. It is against this award that the respective companies have preferred the two appeals by special leave. In this judgment the said companies will hereafter be described as the appellant and their workmen as respondents.

2. The A. C. C. is the principal company concerned in the dispute. The Cement Marketing Company of India Ltd., (hereafter called the C.M. I.) has been separately registered under the Indian Companies Act as a Joint Stock Company; but it is a hundred per cent. subsidiary of the A. C. C. The C. M. I. are the Sales Managers of the A. C. C. while the Concrete Association of India (hereafter called the C. A. I.) is merely a department of the C. M. I. As a result of the agreement which came into operation from 1-8-1953, all financial transactions of the C. M. I., in relation to sales now find a place in the accounts of the A. C. C. Similarly all of its fixed assets have been taken over and appear in the balance-sheets of the A. C. C. All the three concerns have a common staff in Bombay. The A. C. C. had already paid to its employees bonus equivalent to three months basic wages for the year 1953-54 and so had the C. M. I. to its workmen. It appears that the C. M. I., including the C. A. I., undertakes to pay to its employees the same amount of bonus as has been paid or awarded to the employees of the A. C. C.

3. There is no dispute that the A. C. C. is the biggest amongst the companies in India which manufacture cement. It owns 15 cement factories at different places in India and 2 in Pakistan. Out of the total quantity of cement despatched by all the cement factories in India in 1953-54 the A. C. C. despatched 55.46 percent. The A.C.C. came into existence in 1936 as a result of the merger of four important groups of companies engaged in the manufacture of cement. These were F. E. Dinshaw, Tatas, Killick Nixon and Khatau, groups. It appears that 11 companies in all merged with the A. C. C.

4. Before the tribunal the case for the respondents was that the appellant held a position of monopoly in the cement industry and was easily in a position to pay the bonus claimed by them. Their allegation was that the appellant had inflated the capital invested by the merging companies while taking them over in 1936; it had set up new factories out of the profits earned by it without raising fresh capital and thereby had used profits for the purpose of expansion. In the year 1953-54 the appellant had capitalised the full amount standing to the credit of the premium-on-shares account and had transferred a part of the reserves for taxation to the capital account thus in