Provision for rehabilitation of the plant and buildings should be made on the basis of the current price of similar new plant and buildings, and not on the basis of the book value of the existing plant and buildings.

JUDGMENT :

N.L. VYAS, J.

1. In both these references the parties are the same. In Adjudication No. 24 of 1956 the demand is for bonus for the year 1954 and in Adjudication No. 89 of 1956 the demand is for bonus for the year 1955. As the same points arise for decision in both these adjudications, common evidence was heard, and I am disposing of both these references by a common award.

2. The factory at Bhavnagar appears to have been constructed in 1933-34, though no definite evidence was produced before me on this point. The manager has given evidence and he has stated that the buildings were constructed and the plant was installed in 1933 or thereabout. Thereafter, the factory was working for about two or three years, and was then closed as it was not possible for the factory to market the finished goods outside Saurashtra because of the customs cordon at Viramgam. According to the manager, the factory was not working for several years, and ultimately it was rented by the company in 1943. The company appears to have been formed also in 1943. From 1943 to 1945 the factory was working intermittently, and almost continuously from 1945 to 1947. Towards the end of 1947 the factory was acquired as a going concern in 1947 by the company. After 1947 the factory is working continuously. Originally, the factory was producing canvas footwear, but after three, four years the company has started producing automobile components and other mechanical rubber goods. For producing the additional items, the company has made certain additions to the original plant during the period from 1948 to 1953. No dispute about bonus was ever raised before by the workmen, but it was stated by the manager in the course of his evidence that bonus was paid in some years. There is also no dispute that for the years 1954 and 1955 bonus at the rate of fifteen days' basic earnings has been paid to all the workmen. But the workmen have claimed higher bonus on the ground that during these two years the company has made substantial profits. It would appear from the statements submitted by the union that bonus equivalent to four months' basic earnings is claimed for both these years by the workmen.

3. The company has contended in its written statements in both the references that the company has not been making profits regularly, and that substantial provision for rehabilitation of the plant will have to be made in the next few years, as the plant acquired from the Bhavnagar State in 1947 is very old and requires to be replaced in the course of the next three to seven years. It is urged in the written statement that annual provision of Rs. 1.33 lakhs will have to be made for the replacement and rehabilitation of the plant and buildings. If this provision is made for both these years, it is urged, there will be no surplus left from which bonus can be paid to the workmen. In support of this contention the company has produced the report of Mr. Dalal about the present condition of the plant and about its estimated future life. On the basis of this report which is Ex. 15, the company has submitted statement Ex. 12 in which the machinery is divided into three groups:

(1) the machinery acquired from Bhavnagar State in 1947.

(2) additions made during 1948 to 1950.

(3) additions made during 1951 to 1953.

According to this statement, the company has claimed a provision of Rs. 2 lakhs annually for rehabilitation and replacement of the plant. The company has also produced the report of the architects Jamnadas and Bhide, in order to show the future life of the buildings and the amount required at current cost for replacing them. On the basis of this report the company has submitted the statement Ex. 11. On the basis of this statement the company claims an annual provision of Rs. 14,306 for replacement of buildings. A third statement Ex. 13 is submitted by the company in which Rs. 15,9