In the case of family concerns, the tribunal need not allow excessive remuneration to the persons in management for the purposes of the bonus formula.

ORDER :

1. This is a reference by the Government of Bombay under S. 10(2) of the Industrial Disputes Act, 1947, for the adjudication of a dispute between International Tyre Service (Private), Ltd., Bombay, and the workmen (excluding clerical staff) employed under it at Bombay over the following demand :-

"Every workmen should be paid adequate and unconditional bonus for each of the financial years 1958 and 1959 subject to a minimum of three months' wages for each of the years."

The reference was made by Government on the joining application of the company and the Engineering and General Employees' Union Bombay.

2. In the statement of claim filed on behalf of the workmen by the union it is stated that the company has a long standing of 28 years. Prior to 1948 it was a partnership concern. The company deals in tyre repairs, servicing of tyres, vulcanizing, tube repairing, etc. It has up-to-date machinery and its financial position is sound.

3. The company has in its written statement stated that details given by the union about the history of the company are incorrect. It has denied that its financial position is sound, and has submitted that, according to the bonus formula as approved by the decisions of the Supreme Court, there is no available surplus to permit any bonus for either of the years 1958 or 1959.

4. There was a dispute between the company and the workmen with regard to wage-scales, gratuity, etc., [Reference (I.T.) No. 398 of 1958]. In that award made on 29 February, 1960, the learned tribunal, Sri I. G. Thakore, has stated that this company is about ten years' standing, that in comparison with other concerns of its type the company is equipped with up-to-date machinery, that it pays consolidate wages to its workmen, the minimum being Rs. 75 and the maximum Rs. 140. The learned tribunal fixed wage-scales for the unskilled, semi-skilled and skilled workers. He directed that the existing workmen should be adjusted in these wage-scales by giving the workmen who were drawing Rs. 120 or more per month an addition of Rs. 5, and to those drawing less than Rs. 120 per month, an addition of Rs. 3. A gratuity scheme was awarded, but it was directed that on the introduction of a provident fund scheme the gratuity scheme would automatically stand terminated.

5. The company has submitted its audited balance sheets and profits and loss accounts for the two years with a request that they be kept confidential. I shall therefore not be giving any figures in this award.

6. Both the parties have filed their calculations. According to the calculations filed by the Union at Exs. U. 1 and U. 2 there is enough surplus to justify payment of two months' consolidated wages as bonus. According to the company's calculations at Exs. C. 3 and C. 4 there is a deficit and no available surplus to justify payments of any bonus. It might be mentioned here that the company voluntarily paid bonus equal to one month's consolidated salary to the clerical staff for both the years.

7. The difference in the calculations made by the company and the union is largely to the effect that the union has in its calculations not included an item of expenditure in the balance sheet for both the years which comprises commission to the managing director. This is a private limited company, and the only shareholders are the three brothers who are all directors. The managing director Sri Surhid Chandra Chaudri has filed and affidavit in the course of which he has stated that he has about 35 years' experience in the business of repairing tyres and selling new tyres. He began his business career as a manual worker and served International Tyres and Motors, Ltd., at Calcutta and Bombay for about eleven years. In 1931 he started his own independent business and thereafter his two brothers joined him in business. He carried on business as sole proprietor up to 1947, and his two brothers continued to serve with him. In 1947 he converted the proprietary concern into a private limited co