FIRESTONE TYRE EMPLOYEES UNION Vs. S A PATIL

JUDGEMENT

(1.) THIS writ petition challenges an Award of the Industrial Tribunal , Maharashtra, Bombay, made in Reference (IT) No. 149 of 1979, by which the demand for the maximum bonus of 20% for the accounting year 1976-77 was rejected.

(2.) THE petitioner is a registered trade union of the workmen employed in the second respondent-factory at Sewree. The second respondent is a company which manufactures tyres, tubes and allied products.

(3.) THE second respondent declared and paid the minimum bonus of 8. 33% of the annual earning/salary during the accounting year 1976-77. The petitioner, being dissatisfied therewith, raised an industrial dispute that all the workmen should be unconditionally paid bonus at the rate of 20% of their annual earing/salary for the said accounting year. Failing a settlement between the parties, and consequent upon the failure of the conciliation proceedings, the appropriate Government referred the said demand for adjudication of the Industrial Tribunal. The parties filed their respective calculations of bonus, including the running account of the set on and set off, as required under section 15 of the Payment of Bonus Act, 1965. (here in after referred to as "the Act" ). The balance sheet and profit and loss account for the relevant accounting year were also placed on record. The principal contention of the Petitioner-union before the Tribunal was that the second respondent had revalued its assets twice, once in the year 1961 and, again, in the year 1971, and consequent upon such revaluation, a reserve equivalent to the excess amount was created in the balance-sheet of the company. In the bonus calculations submitted before the Tribunal, an amount of Rs. 10,82,000/- equivalent to 6% of the Reserves and Surplus at the beginning of the accounting year, was claimed as the legitimate deduction under section 6 (d) read with item 1 (iii) of the Third Schedule of the Act. This was objected to by the petitioner-union on the ground that the reserve was a fictious book entry, which did not represent any additional moneys value or asset in the hands of the second respondent-company during the relevant accounting year, and, therefore, it ought not to be legitimately treated as a reserve and that the return at 6% under Item 1 (iii) of the Third Schedule read with section 6 of the Act, should be disallowed. In support of this contention, the petitioner-union produced the certificate of a practising Chartered Accountant, one H. V. Trivedi. The said Trivedi was also examined before the Tribunal.