Judgment

BHARGAVA, J. :- These three appeals by special leave arise out of two Awards by the Industrial Tribunal, Bombay, in two References relating to bonus made by the State Government under Section 10 (1) (d) of the Industrial Disputes Act, 1947. The employer is Messrs. Gannon Dunkerlay and Company Ltd. (hereinafter referred to as "the Company"). The workmen of the Company were represented in these industrial disputes by the Gannon Dunkerlay Employees Union (hereinafter referred to as"the Union"). One reference related to the bonus claimed by the workmen at 50 of their annual wages for the years 1958-59 and 1959-60, while the second reference related to the bonus claimed at the same rate for the year 1960-61. The Tribunal awarded the bonus after calculating surplus available for distribution of bonus in accordance with the Full Bench Formula laid down by the Labour Appellate Tribunal and approved by this Court in the case of Associated Cement Companies Ltd., Dwarka Cement Works, Dwarka v. Its Workmen, 1959 SCR 925. Both parties to the appeals are agreed that the Tribunal acted rightly in applying that formula for calculation of bonus payable to the workmen; but both the parties were dissatisfied with the manner in which the calculations were made and with the details of the calculations. When arguments were heard by us in these appeals, we asked learned counsel for parties and the representative of the Union in the appeal of the Union to give us fresh calculations based on Full Bench Formula as explained by this Court in the cases of National Engineering Industries Ltd. v. Its Workmen, (1968) 1 SCR 779 and Workmen of Hindustan Motors Ltd. v. Hindustan Motors Ltd., (1968) 2 SCR 311 as the Tribunal had not followed all those principles. Counsel for parties gave us calculations, but it was again found that there was difference of opinion on a number of points arising in connection with these calculations. The points of difference were 10 in number. As a result, we heard detailed arguments on all those 10 points of difference, and we proceed to give our decision on these 10 points of difference. We may add that, on conclusion of the arguments on all these contested points, we indicated to counsel our decision on 9 of them when reserving the judgment, so that counsel could work out agreed figures of surplus available for distribution of bonus in each of the three years in accordance with those principles and the other agreed principles. The figures of available surplus having been supplied by counsel for parties, we shall proceed in this judgment to allocate the surplus and to declare what is the appropriate amount of bonus payable in respect of each of the three years. We now take up the ten contested points, one at a time.

2. The first dispute related to the question whether the amount shown in the balance-sheet as advances recoverable in cash or in kind or for value to be received, on the assets side is to be treated as part of fixed and capital assets, or is to be treated as part of working capital, in order to determine on what amount of reserves, utilised as working capital, return should be allowed to the Company in calculation of surplus. The claim of the Company was that these advances should be treated as part of the working capital when working out the figure of working capital in accordance with the principle adopted by this Court in Hindustan Motors case, (1968) 2 SCR 311 (supra), because these advances were made in accordance with the business transactions of the Company to various constituents etc. The argument is not supported by any material. There is no evidence on the record that these advances were made in the course of business of the Company to parties from whom the Company was making purchases. In fact, the nature of two of the advances during the year 1958-59 appears to be that these advances were given to officers of the Company, or to a private limited Company wherein two Directors were interested. Such