DHARANGADHARA CHEMICAL NATIONAL WORKERS UNION Vs. INDUSTRIAL TRIBUNAL

JUDGEMENT

(1.) THE petitioners are the workmen employed in Dhrangadhra Chemical Works Ltd. , Sahupuram, Tirunelveli District. The company is registered under she Companies Act and has its bead office at Dhrangadhra in Gujarat State but has got its caustic soda unit at Sahupuram. The workmen were paid 4% minimum bonus as provided under the Payment of Bonus Act, 1965. They contended that they were entitled to additional bonus for the year 1967-68. This claim of the petitioner-workmen was referred for adjudication to the Industrial Tribunal, Madras, by the Government in G. O. R. No, 428/labour dated 2nd March, 1970. The Tribunal by its award dated 31st May, 1974, in Industrial Dispute No. 20 of 1970 held that the petitioners were not entitled to any additional bonus. It is to quash this award of the Industrial Tribunal this writ petition has been filed.

(2.) THE controversy between the parties lies within a very narrow compass. Section 3 of the Payment of Bonus Act. 1965. along with the proviso is as follows: Where an establishment consists of different departments or undertakings or has branches, whether situated in the same Dharangadhara Chemical National Workers' Union vs. Industrialtribunal and Ors. (08. 05. . . Page 2 of 4 gadhara Chemical National Workers' Union vs. Industrialtribunal and Ors. (08. 05. . . Page 2 of 4 place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act: Provided that where for any accounting year a separate balance sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then, such department or undertaking or branch shall be treated as a separate establishment for the purpose of computation of bonus under this Act for that year, unless such department or undertaking or branch was, immediately before the commencement of that accounting year, treated as part of the establishment for the purpose of computation of bonus.

(3.) THE parties proceeded on the basis that the caustic soda unit at Sahupuram falls within the proviso to Section 3 of the Act and therefore, they treated it as a separate establishment for the purpose of computation of bonus under this Act, for the year in question. The balance sheet and profit and loss account prepared for the relevant year in question allocated the share capital, reserves and the common liabilities of the company, The contention of the petitioners was that this unit as such did not have a separate share capital and therefore, deductions provided under Section 6 (d) read with the Third Schedule ought not to be made. The Tribunal rejected this contention. As a matter of fact, the Tribunal relied on a Bench decision of this Court in K. C. P. Ltd. v. K. C. P. Employees' Association, Madras, reported in 1969-II L. L. J. 817. This decisgion directly covers the point in controversy. In that case, the company K. C. P. Ltd. , owned a sugar factory, a confectionery, a distillery at Vuyyuru. a cement factory at Macherla and Central Workshop at Tiruvottiyur engaged in manufacture of heavy machinery. The question that came to be considered by the Bench was whether the Central Workshop at Tiruyottiyur could be treated as a separate establishment under the proviso to Section 3, The Bench held that it could be so treated. The Bench pointed out: Further, if the main part of the section, as we think, embraces Dharangadhara Chemical National Workers' Union vs. Industrialtribunal and Ors. (08. 05. . . Page 3 of 4 gadhara Chemical National Workers' Union vs. Industrialtribunal and Ors. (08. 05. . . Page 3 of 4 all eatablishments comprehensively, including companies, cooperative societies, corporations, partnerships and private ownership, it is obvious to us "such department, undertaking or branch" in the proviso to the section must be related to the main establishment, whether a company or not. There is nothing in the schedules to the Act, more particularly the section and Schedule III. which compels a different construction of the proviso. So far as the share structure and common items of asset and liability of the establishment are concerned, it will have a bearing on the computation of the gross profits of its department undertaking, or branch. That is a matter for proportionate allocation in the light of the relevant figures and considerations exhibited by the relative balance sheet and profit and loss account of the establishment, as well as of the separate balance sheet and profit and loss account prepared and maintained in respect of any such department, undertaking or branch. In our view, therefore, the proviso to S 3 does include a department, undertaking or a branch of an establishment which is a company, and in respect of which a separate balance sheet and profit and loss account are prepared and maintained. Such a department, undertaking, or branch shall be treated as a separate establishment for purposes of computations of the bonus under the Act.