Where an owner of a studio mingles studio business and production business, these activities become one unit vis-à-vis the employees, and the owner cannot disregard the profits of one line of business in determining the availability of surplus for bonus payment.

Judgement

DAS GUPTA, J. - This appeal by special leave is by the Management of Pakshiraja Studios against the Award in an industrial dispute regarding bonus. The employees based their claim on the total profits of the working of the Studios, taking into account both the strictly studio line and the line of picture production. This was resisted by the Management, whose contention is that the "studio" business is totally distinct from the business of production and distribution of pictures, and that the employees who have claimed bonus having no connection with the business of production and distribution of pictures their claim must be considered on the results of the working of the strictly studio business alone. It was the common case of the parties that if the results of the working of the studio lien alone are considered, the employees were not entitled to any bonus; but if the total results of the entire working of the Pakshiraja Studios, including both the Studio working and the production and distribution of pictures be taken into consideration, the profits left a sufficient surplus to justify the payment of bonus.

2. The Tribunal therefore rightly addressed itself to the question whether the Pakshiraja Studios when engaged in the production and distribution of pictures was a distinct industrial unit for the purpose of bonus payment from the Pakshiraja Studio engaged in proper studio work. Applying the principles laid down by this Court in several cases the Tribunal answered this question in the negative and came to the conclusion that the total results of the working of all the activities of the Pakshiraja Studios as disclosed in the documents M-2 and M-12 had to be considered in adjudicating on the claim of bonus. On that basis, it awarded bonus "equivalent to six months basic wages."

3. The only question raised before us is whether Pakshiraja Studios as engaged in the pure studio business and as engaged in the production and distribution of pictures, form one single industrial unit or two distinct industrial units. There can be no doubt that there can be a studio, which carried on studio business pure and simple - earning money by "shooting" pictures for producers, by "recording" for talking pictures, by way of hire for "setting" by "processing films" by preparing "still photos", and such other activities, without engaging itself in the production and distribution of the same. There is equally no doubt that there are many studios which are engaged in purely studio activities. Producers of films take the assistance of such studios, for producing films, and have to pay for the service o the studios, irrespective of the profits and losses. There is nothing however to prevent the owner of a studio himself turning a producer, and using his own studio for the same service as an independent producer might have done. When the owner of a Studio turns producer, it is for him to decide, whether he will keep his studio business and the production business separate and distinct or mingle them. If he mingles them, these several sides of his business activities become one unit, vis-à-vis the employees; and he will not be heard to say the high profits of say, the production side, will be disregarded, in deciding whether there is an available surplus. At the same time, if there are heavy losses, in one of the lines, say, production side, the employees will not be heard to say that these losses should be kept out of account in deciding the question of available surplus.

4. The question whether two or more units of business under the same ownership form one industrial unit or more has often arisen before the industrial courts. In Pratap Press etc. v. Their Workmen, (1960) 1 Lab LJ 497 at p. 499; the Court pointed out that the most important of the tests which are helpful in deciding the questions are :- "that of functional integrality and the question of unity of finance and employment and of labour" and that in all such cases the Court