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1962 Supreme(SC) 27
SUPREME COURT OF INDIA
25th January, 1962.
P.B. GAJENDRAGADKAR, A.K. SARKAR AND K.N. WANCHOO, JJ.
Management of Sone Valley Portland Cement Co. Ltd., Appellant
Versus
Their Workmen and others, Respondents.
Civil Appeal No. 586 of 1960.
Advocates appeared
Mr. A.V. Viswanatha Sastri Senior Advocate (M/s. A. B.N. Sinha and B. P. Maheshwari, Advocate, with him), for Appellant; Mr. L. K. Jha, Senior Advocate (Mr. R.C. Prasad, Advocate, with him) for Respondents (Nos. 1 & 2); M/s. M. K. Ramamurthi and D. P. Singh Advocates of M/s. Ramamurthi and Co. for Respondent No. 3.
A.B.N.Sinha, A.V.VISHWANATHA SASTRI, B.P.MAHESHVARI, D.P.Singh, L.K.JHA, M.K.RAMAMURTHI, R.C.Prasad
Financial capacity for gratuity should be assessed on a practical basis of annual retirements, and tribunals must allow parties to substantiate balance sheet explanations with documents before awarding additional bonuses based on alleged discrepancies.
Headnote:(A) Industrial Dispute - Fair Hearing - Remand - In a long-pending matter, the tribunal is not unjustified in refusing further adjournments and insisting on the production of material within a short timeframe if the party has already had sufficient opportunity to present its case. (Para 3)
(B) Industrial Dispute - Permanency of Employees - Where work is not of a temporary nature but part of a continuous manufacturing process and there is sufficient workload, the order to make a percentage of temporary staff permanent is justified. (Para 4)
(C) Industrial Dispute - Gratuity - Financial Capacity - The burden of a gratuity scheme should be evaluated based on a practical approach, considering the actual percentage of employees retiring annually, rather than a theoretical actuarial basis. (Para 5)
(D) Industrial Dispute - Bonus - Evidence - If a party provides an explanation for a discrepancy in the balance sheet and offers to produce supporting documents, the tribunal cannot arbitrarily disallow the amount and award additional bonus without calling for such documents. (Para 7)
Facts of the case:
A dispute between a cement factory and its workmen regarding gratuity, bonus, and permanency of staff was referred for adjudication. The tribunal ordered that 50% of cement packers be made permanent, introduced a gratuity scheme, and awarded an additional 15 days' bonus. The company challenged these findings and also sought a remand on the grounds of not receiving a fair hearing.
Findings of Court:
The court held that the company was given a fair hearing and the tribunal was justified in refusing further adjournments. The order for permanency was upheld as the work was continuous. The gratuity scheme was upheld as the company had the financial capacity based on practical retirement rates. The additional bonus was set aside as the tribunal failed to verify the company's explanation regarding balance sheet discrepancies.
Issues: Whether the appellant was denied a fair hearing; whether the order for permanency of staff was justified; whether the company had the financial capacity to implement a gratuity scheme; and whether the award of additional bonus was based on a fair assessment of the balance sheet.
Ratio Decidendi: The court ruled that financial capacity for employee benefits should be assessed practically. Furthermore, a tribunal must act fairly by allowing a party to substantiate its financial records with documents before treating a discrepancy as profit for bonus calculation.
Result: Appeal partly allowed.
WANCHOO, J. : This is an appeal by special leave in an industrial matter. There was a dispute between the appellant-company, which is a cement factory, and its workmen, and it was referred for adjudication by the Government of Bihar as far back as November 1954. There were a large number of matters which were referred. In this appeal however only three of them, namely, (i) gratuity, (ii) bonus for the year 1953, and (iii) all those whose names are on the company s roll for a year should be made permanent, have been pressed before us. An award was made on October 31,1956 by the industrial tribunal disposing of the dispute. The award was brought up before this Court by special leave and was set aside on a technical ground. Thereafter the matter went back before the tribunal. In the meantime, however, 33 out of 41 points of dispute referred originally had been disposed of by agreement between the appellant and its workmen. The tribunal therefore dealt with the remaining eight points only in the subsequent proceedings after the order of this Court, of which we are now concerned with only three as indicated above. We propose to deal with each point seriatim and the contentions of the parties will appear as we deal with the points. Before, however, we do so we may dispose of a preliminary point raised on behalf of the appellant, namely, that the appellant had not been given a fair hearing by the tribunal and was therefore unable to place relevant material before it and consequently the matter should be remanded to the tribunal to hear it again after giving an opportunity to the appellant to present its case properly before it.
2. In this connection the appellant relied on the order-sheet of the tribunal to show that sufficient opportunity was not given to the appellant to place its case before it. It may be mentioned that the earlier order of this Court was made on August 22, 1958 and thereafter proceedings began before the tribunal in September 1958. A good deal of time thereafter was spent in preliminaries which were settled by the end of November 1958. When the case came up on December 4,1958 before the tribunal, the appellant wanted time on the ground that it proposed to move the High Court in connection with the order of the tribunal of November 7,1958. An adjournment was granted thereupon. As the appellant did not move the High Court the matter was taken up again. Some time was then spent in an effort to arrive at an amicable settlement but this failed. Thereafter there were various hearings which were postponed for one reason or the other till we come to June 25, 1959. on that date the tribunal had before it a petition field by the parties jointly in which it was prayed that the hearing might take place at Japla where the cement factory is situate. Consequently the tribunal adjourned the case for hearing at Japla on June 26. on that day the parties appeared before the tribunal; but an objection was raised by the respondents that there was no proper appearance on behalf of the appellant and in any case the appellant could not be allowed to appear by a lawyer. The tribunal held that the lawyer could not be permitted to appear as the other party was objecting to it. There were two officers of the appellant-company also present; but as objection was taken to their appearance, the tribunal asked them to produce their authority, which they were not able to produce. The tribunal therefore seems to have held, though not in so many words, that they could not properly represent the appellant. Even so it seems from the order-sheet that though the two officers were not strictly entitled to appear on behalf of the appellant the tribunal permitted them to appear. The tribunal also noted that though the matter had been ending since 1954 the appellant was trying for further adjournment to delay adjudication. The tribunal was not prepared to give a long adjournment. Even so, it postponed the case to June 27 to allow the parties to file
