EMPLOYERS OF AZAM JAHI MILLS LIMITED Vs. WORKMEN

JUDGEMENT

(1.) This is an appeal against an award dated December 21, 1963 in Industrial Dispute No. 28 of 1963 of the Industrial Tribunal, Andhra Pradesh, Hyderabad on special leave granted by this Court.

(2.) The dispute which was referred to the Industrial Tribunal related to the question of payment of bonus for the years 1960-61 and 1961-62 demanded by the workers of Aam Jahi Mills, Warrangal. The Tribunal found that there was an available surplus for the first year but none for the second. It directed payment of bonus of one week's wages to all the workmen over and above the two week's bonus which the employers had agreed to pay irrespective of any profits made by the company. In appeal before us, the appellants contend that as there was no available surplus if properly quantified, the question of payment of bonus in addition to that for the two weeks already agreed upon, does not arise. It is to be noted that the parties had entered into a settlement on February 22, 1960 which was to be operative for a period of five years commencing on October 1, 1958 and ending on September 30, 1963. By that settlement, it was provided that the claim for bonus would only arise if there should be an available surplus after making a provision for all the prior charges including a fair return on paid-up capital and on reserves utilised towards the working capital in terms of the Full Bench formula laid down by the Labour Appellate Tribunal in Mill-Owners' Association vs. Rashtriya Mills Muzdoor Sangh, Bombay. The agreement also provided that prior charges would include (a) statutory depreciation and development rebate, (b) taxes, (c) reserve for rehabilitation, replacement and modernisation of Block as calculated by the Industrial Court (basic year 1947) and (d) a fair return at 6 per cent on paid up capital in cash or otherwise including bonus shares and 2 per cent on reserves employed as working capital. It was also a term of the agreement that the amount of the total gross profits of the mill for the year shall be the amount of profits as disclosed in published balance sheets of the company without making a provision for depreciation and for bonus, but after deducting from it the amount of extraneous income (like interest from investments, rent from property) which is unrelated to the efforts of the workers. With regard to statutory depreciation and development rebate, the parties agreed that if in any year the total of these two exceed the amount of' reserve for rehabilitation, the full amount statutory depreciation and development rebate would be adopted as a prior charge and no extra provision would be made for rehabilitation in that year. Further, in terms of the agreement the workers would be entitled to an amount equivalent to 1/24th of the basic wages if the mill had an available surplus of profits after providing for all prior charges on the basis of the Full Bench formula as described above, up to an amount equivalent to 25 per cent of the total basic wages earned during the year.

(3.) The contention of the appellants before us is that in working out the available surplus the Tribunal went beyond the Full Bench formula and the settlement between the parties. Our task was considerably lightened by counsel for the appellants handing over a table showing the figures for the working out of the Full Bench formula, as found by the Tribunal compared to those propounded by the Management and the workers. There is no dispute that the net profit as disclosed by the balance sheet for the year 1960-61 was Rs. 9,03,378. The only difference between the management and the Tribunal with regard to the calculation of gross profits relates to the figures Rs. 5,39,963 for gratuity and retrenchment compensation paid by the company during the year in question. According to the Tribunal, this sum should be spread over five years while according to the company, this sum should not be included at all as it had to be paid out of the profits of the company during the relevant year.