K. N. WANCHOO J.:- - (1.) THE following Judgment of the court was delivered by
(2.) THESE are three appeals by special leave from the same decision of the Labour Appellate tribunal of India and will be dealt with together. The first two appeals (Nos. 450 & 451) are by Messrs. Titaghur Paper Mills Co. Ltd., and the third (No. 514) by its workmen. Titaghur Paper Mills Co., Ltd. (hereinafter called company) own two paper mills one at Titaghur (hereinafter called Mill No. 1) and the other at Kankinarah (hereinafter called Mill No. 2). It appears that there had been a dispute between the company and its workmen in 1948, which was referred to the adjudication of a tribunal. That was disposed of by the tribunal on 5/11/1949. Among the matters then referred was the question of profit bonus for the years 1945-46 and 1946-47. When that matter was under the consideration of the tribunal, the company put forward a scheme of production bonus on the basis of a minimum production of 30,000.00 tons of paper in a year in the two mills together. The basis of the scheme was that the workmen would get 13 days' basic wage (this being equivalent to half of one month's basic wage) by way of bonus on a production of 30,000.00 tons for both mills. Thereafter the workmen were to get an additional one day's basic wage for every 460 tons produced upto a maximum of 36,000.00 tons when the production bonus would come up to 26 days' basic wage (which would be equivalent to one month's basic wage including weekly holidays). The company in putting forward the scheme said that `as an admittedly rough basis for such a scheme something on the following lines might, we think, be equitable`. It then gave the scheme mentioned above. The tribunal dealing with the question of profit bonus for the years 1945-46 and 1946- 47 observed that the scheme of production bonus put forward by the company had been accepted by the union as satisfactory and for the purpose of that proceeding it accepted the scheme as a measure for awarding profit bonus for the years 194546 and 1946-47. The actual bonus worked out to 17 days' basic wage for 1945-46 and 19 days' basic wage for 1946-47 ; (see award of Sri M. C. Banerji, in the publication of government of West Bengal, Labour Department, I Awards made by the tribunals for the quarter ending December, 1949 `, pp. 130_ 150). It further appears that the detailed scheme was later communicated to the union in July 1950 and as the principle had already been accepted by the union before Sri Banerji the scheme was put in operation from 1/04/1949, and production bonus has all along been paid in accordance with it after that date. Disputes, however, arose between the company and its workmen in 1953. The workmen of Mill No. 2 were the first to raise a dispute in August 1953, in which inter alia they demanded profit bonus for the years 1950-51 and 1951-52 and also prayed for certain changes in the production bonus scheme. The workmen of Mill No. 1 also raised a dispute and presented a charter of demands to the company in October 1953. They also demanded profit bonus for the two years mentioned above and revision of the production bonus scheme. These disputes were referred by the government of West Bengal to the Fifth Industrial tribunal, West Bengal. There were two references, one relating to each mill. They were heard separately by the Industrial tribunal which gave two separate awards rejecting all the demands made by the workmen. Consequently, two appeals were preferred by the workmen before the Labour Appellate tribunal. There the two appeals were heard together at the request of the parties and disposed of by the tribunal by the same judgment on 31/07/1956. The Fifth Industrial tribunal rejected the claim of the workmen for revision of the production bonus scheme and for grant of profit bonus for the years 1950-51 and 1951-52. It was of opinion that the claim for profit bonus for the two years was not maintainable as the workmen had been given production bonus and that met the profit bonus claim of the workmen for the two years and all claims for profit bonus for these two years must be taken to have been fully satisfied. The question of delay in making the profit bonus claim was also raised; but the Fifth Industrial tribunal was of the view that the profit bonus claim could not be defeated merely on the ground of delay. As to the revision of production bonus scheme, it held that scheme had been accepted by the union and no reason had been shown why the rate of one day's basic wage as production bonus for every increase of 460 tons over 30,000.00 tons should be disturbed. It was also of the view that increased production was not due to increased efforts on the part of the workmen but was due mainly to increase in labour strength as well as installation of new machinery. On appeal the Labour Appellate tribunal rejected the claim for profit bonus for the year 1950-51 on the ground that it was made too late. It, however, disagreed with the view of the Fifth Industrial tribunal that the production bonus scheme fully satisfied the claim of the workmen for profit bonus and therefore DO profit bonus should be given even for the year 1951-52, with regard to which it %-as of opinion that the claim was not belated. It, therefore, went into the figures of profits and arrived at the available surplus in accordance with the formula known as the full bench Formula evolved in The Mill-Owners' Association, Bombay v. The Rashtriya Mill Mazdoor Sangh, Bombay(1). Having arrived at the available surplus it granted one month's profit bonus in addition to what. the workmen were entitled to under the production bonus scheme as revised by it. As to the production bonus scheme, it was of the view that there were reasons for revising it and therefore revised (1) [1950] it, providing for 112 days' basic wage for each increase of 460 tons over 30,000.00 tons up to the limit of 36,000.00 tons and two days' basic wage for each increase of 460 tons in excess of 36,000.00 tons. It may be mentioned, however, that the change in the production bonus scheme was not made retrospective and would therefore come into force from after the judgment of the Labour Appellate tribunal. The appeals of the workmen were therefore allowed in these two respects, which have led to the two appeals by the company be-fore us. The workmen through their union have also filed an appeal against those portions of the decision of the Labour Appellate tribunal which rejected their demands.
(3.) IN the two appeals by the company two matters relating to (i) production bonus and (ii) profit bonus have been raised before us. We shall first take up these two matters and then come to the appeal by the workmen. The main contentions on behalf of the company with respect to the production bonus scheme are threefold, namely, (1)The Industrial tribunal has no jurisdiction to go into the question of production bonus scheme at all, for such a scheme by its very nature can only be a matter of agreement between the employer and the employees and cannot be imposed by a tribunal; (2)Even where a production bonus scheme is in force, its terms cannot be varied by a tribunal and any variation can only be the outcome of an agreement between the employer and the employees, because initiation or introduction of such a scheme is what may be called a I management function'; and (3) Even if an industrial tribunal has the power to vary the production bonus scheme, no material was placed on the record in this case on the basis of which the tribunal could order a variation in the scheme in force in the company. As to the award of profit bonus for the year 1951-52 the attack was two-fold, namely, (4)It was not open to a tribunal to award both production bonus and profit bonus and in any case it could not be done in the present case as the production bonus here was nothing more than profit bonus; and (5) Even if both production bonus and profit bonus could be awarded, there was no available surplus in this case out of which profit bonus for that year could be paid. ;