HIGH COURT OF CALCUTTA
B. N. Banerjee
LEONARD BIERMANS WORKERS UNION - Appellant
Versus
SECOND INDUSTRIAL TRIBUNAL - Respondent
Civil Revn. 4415 Of 1960
Decided On : JULY 06, 1961
INDUSTRIAL DISPUTES - GRATUITY - ADMISSIBILITY OF BALANCE SHEETS - RELIANCE ON BALANCE SHEETS - COMPANY'S FINANCIAL POSITION - INTRODUCTION OF GRATUITY SCHEME - FACTORS TO BE CONSIDERED.
Fact of the Case:
A dispute arose between Messrs. Leonard Biermann (the company) and their workers over the introduction of a gratuity scheme. The Industrial Tribunal rejected the workers' claim, finding the company was running at a loss and could not bear the burden of gratuity. The workers challenged the award, arguing that the Balance Sheets relied upon by the Tribunal were inadmissible or unreliable.
Finding of the Court:
The court held that the Balance Sheets and Profit and Loss Accounts were admissible in evidence before the Tribunal and could be relied upon if correctly prepared. However, the burden was on the company to prove the correctness of the statements made therein, especially if there were materials or circumstances to doubt their authenticity.
Issues: 1. Admissibility of Balance Sheets in Industrial Tribunal Proceedings 2. Reliance on Balance Sheets to Determine Company's Financial Position 3. Introduction of Gratuity Scheme: Factors to be Considered
Ratio Decidendi: 1. Industrial Tribunals are quasi-judicial bodies and are not strictly bound by the Indian Evidence Act. They can rely on oral or documentary evidence that may not be strictly admissible under the Act. 2. Balance Sheets and Profit and Loss Accounts are admissible in evidence before Industrial Tribunals and can be relied upon if correctly prepared. However, the company has the burden to prove the correctness of the statements made therein, especially if there are reasons to doubt their authenticity. 3. In considering the introduction of a gratuity scheme, the Tribunal must assess the company's financial position and its ability to build up a gratuity fund over time. If the company is consistently sustaining losses, it may not be able to bear the burden of gratuity and the Tribunal may reject the claim.
Final Decision: The court discharged the Rule, upholding the Tribunal's decision to reject the workers' claim for gratuity. However, the court clarified that the workers could renew their claim when the company's financial position improved.
( 1 ) AN industrial dispute between Messrs. Leonard Biermann (hereinafter referred to as the company) and their workers was referred to the Second Industrial Tribunal, by an order dated August 5, 1959. The scope of the dispute was the demand by the workers for introduction of a scheme for payment of gratuity. The Tribunal came to the conclusion that the company was running at a loss for the last few years and was not in a position to hear the burden of gratuity. In that view of the matter the workers' claim for gratuity was rejected find the Tribunal passed an award accordingly. The award was published, under Section 17 of the Industrial Disputes Act 1947, under a notification, dated July 23, 1960.
( 2 ) THE propriety of the award is being disputed in this Rule, at the instance of the Workers' Union.
( 3 ) A single point was argued for my consideration in this Rule. It was contended that the Balance Sheets of the company, on the basis of which, the Tribunal came to the conclusion about the financial incompetency of the company, were inadmissible in evidence, alternatively that they did not contain true statements about the economic position of the company and should not have been relied upon, particularly after the company had failed to produce their books of account on the basis whereof the Balance Sheets-were purported to have been prepared.
( 4 ) IT is necessary for me at this stage to refer to certain orders made by the Tribunal relating to production and inspection of documents. On December 2, 1959, the Workers' Union filed an application for a direction on the company to produce the following books and documents, on the plea that the Balance Sheets Bled along with the Written Statement did not show the correct financial position of the company, namely, (1) Ledgers, (2) Cash Books, (3) Journals, (4) Sale Registers, (5) Production Registers, (6) Stock Books, (7) Import Registers (8) Income-tax clearance Certificates, all of the years 1953 to 1959.
( 5 ) ON the aforesaid application the Tribunal passed the following order, on December 12, 1959:"the company objects to the production of books of account to the Tribunal. I do not think that the books are necessary. The company should produce the audited balance sheets at the rime of hearing and allow inspection of
any books of account called for by the Union's Lawyer in their office On such dates as may be convenient to both the parties".
( 6 ) THEREAFTER, the Workers' Union filed an application before the Tribunal complaining that the Company did not make inspection of the documents possible by their lawyer. Paragraph 7 of the application is set out below:"that on 5-1-60 Sri Chatterjee went to inspect the book along with two other members of the Union but the Manager objected to the very presence of those members of the Union on the floor of his Office on the alleged ground that they were retrenched persons and as such inspection was not possible because the Advocate could not get any assistance from the Union members". On the aforesaid allegation the Workers' Union prayed for production of the books and documents, called for by the Workers' Union, before the Tribunal.
( 7 ) THE Company filed an objection to the prayer made by the Workers' Union, the material-portion of which is set out below:"that with regard to the allegations contained in paragraph 7 of the Union's application it is submitted that on 5-1-60 Mr. T. P. Chatterjee, Advocate, came for the inspection cf Books along with two Ex-employees of your petitioner, who were retrenched in the month of September, 1959 and as such your petitioners objected in showing the Company's books to the two outsiders. Your petitioner was quite willing to show the Books to the learned Advocate for he Union but the learned Advocate for the Union left without making any inspection".
( 8 ) ON February 27, 1960, the Tribunal recorded the following order on the application for production:"heard the lawyers. The
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