The distribution of available surplus for bonus purposes must take into account the claims of the employer, shareholders, and labour.

Judgment

GAJENDRAGADKAR, J. : This appeal by special leave arises from an industrial dispute between the management of the Trichinopolly Mills Limited, (hereinafter called the appellant) and its workmen (hereinafter called the respondents). For the year 1951 the respondents claimed by way of bonus six months wages including dearness allowance and the appellant denied its liability to grant the said claim. The dispute which thus arose between the parties was referred to the Industrial Tribunal at Madurai for adjudication. The tribunal directed the appellant to pay to the respondents bonus for the relevant year amounting to four months basic wages. Against this award the respondents preferred an appeal before the Labour Appellate Tribunal and urged that in the circumstances of the case they were entitled to a much larger bonus. The appellate tribunal substantially accepted the respondents plea and increased the amount of bonus from four months basic wages to eight months basic wages. It is against this increased award of bonus directed by the appellate tribunal that the present appeal has been filed by the appellant with special leave.

2. It is common ground that in determining the amount of bonus the Labour Appellate Tribunal has applied the Full Bench formula. Two contentions have, however, been raised before us by Mr. Vishwanatha Sastri on behalf of the appellant. He argues that the Labour Appellate Tribunal was in error in awarding to the appellant only Rs. 66,948 by way of rehabilitation and replacement charges. According to him the tribunal was right in fixing the said amount at Rs. 1,61,780. The other contention raised is that even on the findings recorded by the Labour Appellant Tribunal it was unreasonable to have increased the bonus to eight months basic wages.

3. Now, the position with regard to the appellant s claim for rehabilitation is that the appellant led no evidence in support of its claim. It contented itself by relying on a previous award between the parties in respect of a claim for bonus for the year 1948. On the other hand, the respondents relied on a previous award between the parties in respect of the claim for bonus for the year 1950. The tribunal took the view that the decision between the parties in respect of bonus claim for 1948 was binding and it should be taken as a basis for deciding the present claim, whereas the Labour Appellate Tribunal has preferred to rely upon the latter decision and taken that as the basis for calculating the amount of rehabilitation and replacement charges. It is now well settled that the employer has to prove by satisfactory evidence the particular claim he wishes to make under the head of rehabilitation and replacement charges. There is no doubt that no satisfactory evidence has been led in the present proceedings. It is true that Mr. H. Srinivasa Rao, the Secretary of the appellant, has made some statements in respect of this claim in his evidence-in-chief but they are wholly insufficient to assist in deciding the merits of the appellant s claim for rehabilitation. The witness stated that the present cost of replacement of the machinery in the mills if replaced would be Rs. 16,65,000 c.i.f., and he added that the cost of the existing general machinery may be Rs. 22,00,000 while that of the existing electrical machinery may be about Rs.6,00,000. He also produced Ex. M-11 which contains the quotations received by the appellant in 1950. It would be noticed that the witness gave no evidence about the probable life of the machinery and about its condition during the relevant year. Unless satisfactory evidence is given on this point it would be impossible to make any finding as to the rehabilitation charges on the materials given by the witness. Therefore, it is not possible to accede to the argument that the evidence of this witness affords a legal and reliable basis for dealing with the point in dispute.

4. That takes us to the question as to which of the two previous de