VAIDIALINGAM - (1.) THIS appeal, by special leave, is directed against the Award dated 26/10/1967 of the National Industrial Tribunal, Calcutta in Reference No. NIT-3 of 1967, holding that for the accounting year 1965-66, the quantum of bonus payable by the appellant to its workmen is 20 per cent of the effective salaries or wages with a further direction to set on a sum of Rs.1,46,252.00.
(2.) THE appellant, India Cable Company Ltd. (hereinafter to be referred as the Company) occupies a very prominent position in the Cable Industry of India having its Head Office at Calcutta and its factory at Jamshedpur. It has branches in Bombay, Madras, New Delhi, Kanpur, Ahmedabad and Bangalore. In addition to insulated cables, the Company manufactures aluminium rods, radio aerials, fuse wires and other products. Its paid-up capital is rupees 2,48,65,450. It employed workmen numbering over 5,000. THE gross effective salaries and wages of its employees for the relevant accounting year amoutns to Rs.1,05,32,880. Its accounting year is from 1st April to 31st March of the succeeding year. For the accounting year 1964-65 the Company declared and paid bonus at 20 per cent to all employees in accordance with the provisions of the Payment of Bonus Act, 1965 (hereinafter to be referred as the Act). For the year in question 1965-66, it calculated a sum of Rs.23,68,785 as available surplus. This amount was arrived at by the Company after calculating direct tax without deducting the provision for payment of bonus payable to its workmen. A sum of Rs.14,21,271 being 60 per cent of the said available surplus was declared as bonus for the year 1965-66. This amount represented 13.51 per cent of the wage bill. The workmen were dissatisfied with this offer of bonus at 13.51 per cent, and demanded payment of bonus at the maximum rate of 20 per cent as provided in the Act. In consequence they raised a dispute with the Company. In view of the agreement dated 24/11/1966, between the parties to refer the claim for additional bonus for adjudication to a Tribunal, the workmen received the bonus at the rate of 13.51 per cent offered by the Company. The Central Government by order dated 23/06/1967 referred for adjudication to the National Industrial Tribunal, Calcutta, the following dispute: "What should be the quantum of bonus payable to the workmen of the Indian Cable Company Limited, Calcutta, for the accounting year 1965-66?" The unions contended before the Tribunal that the computation of allocable surplus by the Company has not been properly made in accordance with the Act and that several items shown in the profit and loss account as expenditure have to be added back to arrive at the actual gross profits. The unions further alleged that the Company has spent large amounts for payment of liability for future years with a view to reduce the available and allocable surplus, which in conseqeunce has resulted in the reduction of percentage of bonus. The Company on the other hand, maintained that it has kept proper accounts which have been audited by a reputed firm of auditors Messrs lovelock and Lewes and that the computation of allocable surplus has been properly arrived at having due regard to the provisions of the Act. The Company denied the allegations of the unions that enormous expenditure has been shown with a view to reduce the quantum of bonus. On the other hand, the Company pleaded that all items of expenditure were justified and those items are deductible in considering the claim for bonus.
(3.) AT this stage it may be mentioned that the unions served interrogatories requiring information on various matters and there is no controversy that the Company furnished all the informations that were called for. Before the Tribunal the Company required various deductions to be made from the net profits shown in its profit and loss account. On the other hand, the unions requires various items to be added back. The Tribunal accepted the contentions of both the parties with regard to certain items. We will in due course refer to the items which are in dispute before us at the instance of both the Company and the unions. The Tribunal computed the available surplus at Rs.37,54,713.00 60 per cent of this amount being Rs.22,52,828 was fixed as allocable surplus. The Tribunal held that a sum of Rs.21,06,576 being bonus at 20 per cent of the gross effective salaries and wages was payable for the year in question and it directed the surplus amount of Rs.1,46,252 to be set on. As the bonus at the rate of 13.51 per cent had already been declared and paid by the Company, the Tribunal directed the payment of the balance 6.49 per cent within the period mentioned in the award. One aspect which has to be noted is that in calculating the available surplus, the Tribunal, before calculating the notional direct tax, deducted the bonus payable for the accounting year in question.;