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PETITIONER: WORKMEN OF JOINT STEAMERCOMPANIES

       Vs.

RESPONDENT: JOINT STEAMER COMPANIES

DATE OF JUDGMENT: 29/04/1963

BENCH: GUPTA, K.C. DAS BENCH: GUPTA, K.C. DAS GAJENDRAGADKAR, P.B. WANCHOO, K.N.

CITATION:  1963 AIR 1710            1964 SCR  (3) 456

ACT:        Industrial dispute-Bonus-Industry operating in India and  Pakistan, if, form one integrated industrial  activity- Tests-Full Bench Formula-Aplicability to a part only of  the total  operations-Inspection of documents by workmen if  and when acceesible-Industrial Disputes Act, 1947 (14 of  1947), s.21.

HEADNOTE:      The  respondent  complies were  carrying  on  transport business in the eastern part of the country in  co-operation with each other, which continued even after the partition of India.  The main traffic of the company in the years 1949 to 1952  was as before, namely, (a) traffic within  India;  (b) traffic with’  457 Pakistan  and (c) traffic between India and  Pakistan.   The major  portion  of the large fleet of vessels in  which  the companies  carried on their business remained in common  use for   traffic  origaniting  in  Pakistan  and  for   traffic originating in West Bengal and Assam, so that no appreciable part  of  the  fleet  could  be  classed  as  being  in  use specifically  in  one  country or the  other.   The  workmen claimed  bonus  for all the four years and the  dispute  was referred  to the Industrial Tribunal.  The  workmen’s  claim was rejected by the Tribunal and the order was confirmed  by the Labour Appellate Tribunal.  On appeal by special  leave, the  main controversy between the parties in this Court  was whether,  the  Full Bench Formula has to be applied  on  the basis of the overall results of the companies operations  in India and Pakistan or on the results of the operaeions india only.  The appellants main contention was that assuming that the  operation  in India and Pakistan formed  parts  of  one integrated industrial activity, a way should still he  found for separating the two sets of operations for the purpose of the application of the Full Bench Formula.      Held  that in the present case, on applying  the  tests laid  down  by  this  Court, the  operations  of  a  company carrying on transport business between two different  places cannot  be said to be carried on as different  and  distinct industrial activities at these two places.

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    Associated  Cement Companies v. Their  workmen,  [1959] S. C. R.  925;  A.  C. C. Ltd., v. Their Workmen,  1960  (1) L.L.J.  1; Pratap Press v. Their Workmen, 1960 (1)  L.  L.J. 497; The Management of Pakshiraja Studio v. Their’  Workmen, 1961  (3)  F. L. R. 369; Fine Knitting Co. Ltd. v. I.  C.  & Ors.,  1962 (1) L. L. J. 275 and D. O. M. Chemical Works  v. Its Work -men, 1962 (1) L. L. J. 388, referred to.      Held further, that in the present case on the materials on  record,  this court was not in a position to  apply  the Full Bench Formula to a part only of the total operations of the companies in India and Pakistan and the Labour Appellate Tribunal  was  right in rejecting the  workmen’s  claim  for bonus for the years 1949 to 1952.       Subject  to the protection of s. 21 of the  Industrial Disputes   Act   and   in  the  absence   of   any   special circumstances,  the  Tribunal, in  its  judicial  discretion would  ordinarily  be justified in asking the  employees  to give  to  the  workmen reasonable  access  to  all  relevant papers. 458      In the present case however, even if the account  books were  made available to the workmen, it would be  impossible on  the materials on record to arrive at proper figures  for the different items involved in the Full Bench Formula.  The appeals therefore, must be dismissed.

JUDGMENT:      CIVIL  APPELLATE JURISDICTION : Civil Appeals Nos.  811 and 812 of 1962.      Appeals  by special leave from the judgment  and  order dated   May  31, 1956 of the Lahour  Appellate  Tribunal  of India at Calcutta in Appeals Nos.  Cal. 225 and 224 of 1955.      N.   C.  Chatterjee  and  P.  K.  Mukherjee,  for   the appellants.      A.   V. Viswanatha Sastri, S. C. Mazumdar and    B. N. Ghosh, for respondents Nos.  I and 2.      1963.   April  29.   The  jugment  of  the  Court   was delivered by      DAS  GUPTA  J.-These  two  appeals  raise  a   somewhat difficult  problem as regards the grant of bonus to  workmen of an industry operating not only in India but also  outside this country.  The appellants are the workmen of two Steamer Companies,  the Indian General Navigation and  Railway  Co., Ltd., and the Rivers Steam Navigation Co., Ltd., which  have for  many years been operating jointly and are  conveniently referred  to as ’Joint Steamer Companies".  Disputes  having arisen  between  these companies and their  workmen  on  the question  of bonus for the years 1949, 1950, 1951 and  1952, they  were referred by the Government of West Bengal to  the Industrial  Tribunal, by two separate orders  of  reference, one  in respect of the dispute for bonus for the years  1949 and  1950  and the other in respect of the  years  1951  and 1952.  459      The  Tribunal disposed of these two references  by  one common  judgment and rejected the workmen’s claim for  bonus for  all  the  four  years.  This  order  of  rejection  was confirmed  by  the  Labour  Appellate  Tribunal,  though  on different  grounds.   It  is against this  decision  of  the Labour Appellate Tribunal that these appeals have been filed on special leave granted by this Court.      The  respondent companies were established more than  a century  ago and for more than half a century  before  India

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was partitioned, they were carrying on transport business in the  eastern part of the country in co-operation  with  each other   Their business of transporting goods and  passengers is carried on in 600 or 700 vessels plying on the Ganags and the Brahmaputra rivers and their tributaries.  This business continued  even after the partition of India as a result  of which a portion of the State of Pakistan intervened  between Assam  and the remainder of India.  The main traffic of  the company in the years with which we are concerned, viz., 1949 to  1952  has  been as before, namely,  (a)  traffic  within India; (b) traffic within Pakistan, and (c) traffic  between India  and  Pakistan.   The headquarters  of  the  Companies remained  as before at Calcutta.  The major portion  of  the large  fleet  of vesels in which the  companies  carried  on their   business   remained  in  common  use   for   traffic originating in Pakistan and for traffic originating in  East Bengal  and Assam, so that no appreciable part of the  fleet could be classed as being in use specifically in one country or the other.      The  workmen’s claim for bonus was substantially  based on  the  contention that large profits were  earned  by  the companies  on  their  operations in India.   To  these,  the workmen  contented,  they had contributed and so  they  were entitled to bonus. 460      In  resisting this claim the companies  submitted  that the  transport business which they carried on in  India  and Pakistan was one single, integrated, industrial  undertaking and  the  overall result of the entire business  had  to  be considered  in deciding the question of bonus  According  to them,  if the principles for ascertaining profit bonus  that are  embodied  in what is known as the Full  Bench  Formula, finally  crystallized  by this Court  in  Associated  Cement Companies’  Case (1), be applied, it will be found  that  no available  surplus  for distribution of bonus  remains.   In support of this case the companies submitted charts  Showing their  version  of the calculation of available  surplus  in accordance with the Full Bench Formula.      The  workmen’s  Counsel conceded before  the  Appellate Tribunal  that they had no case for bonus if that claim  had to  be  applied  to available surplus on the  basis  of  the profits of the companies derived from the entire business in India  and  Pakistan.  Their contention was  that  the  Full Bench  Formula  had to be applied on the  basis  of  profits derived  in West Bengal or at any rate on the basis  of  the profits derived in India to the exclusion of Pakistan  which is a foreign country.      The   Appellate   Tribunal  accepted   the   Companies’ contentions and accordingly rejected the workmen’s claim for bonus.      As before the Appellate Tribunal, so before this  Court the  main controversy between the parties has centred  round the  question  whether  the Full Bench  Formula  has  to  be applied  on  the  basis  of  the  overall  results  of   the Companies’  operations  in  India and  Pakistan  or  on  the results  of  the  operations in India only.   If  all  these operations  are  carried  on  as  parts  of  one  integrated industrial   activity   there   would   ordinarily   be   no justification for (1)  [1959] S. C. R, 925.  461 deciding  the question of bonus on the operations  in  India only.  The question whether different operations carried  on by the same employer form one integrated industrial activity or not has often been considered by industrial adjudication.

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This Court has also had to deal with the question on several occasions  and  has  in a series of  decisions  indicated  a number  of  tests which are of assistance in  deciding.  it. Integrality  of  functions;  inter-dependence  of   finance; community of control and management; community of  man-power and  of  recruitment  and discipline  in  respect  of  them; whether the employer himself has treated the different parts as  forming  part of one unit or not-these are some  of  the many  tests  that  have been laid down.  It  has  also  been emphasised  that  the  application of  one  single  test  in preference to the other has to be generally avoided and  the weightage  to be given to the different tests  applied  will depend  on the circumstances of each case and the nature  of the industrial activity. A.C.C. Ltd., v. Their Workmen  (1); Pratap  Press  v.  Their Workmen (2  );  The  Management  of Pakshiraja  Studio v. Their Workmen (8); Fine Knitting  Co., Ltd.,  v. I.C. (4); D. C. M. Chemical Works v.  Its  Workmen (5).      Cases  often occur where the same employer  carries  on the  same  industrial activity at different places  and  the question  arises whether the units at the  different  places are one and the same or distinct and separate.  Thus,  where the  same  company engaged Fain the  manufacture  of  cement starts two different factories at two places, A and B,  they may  well  be distinct and separate, so that the  claim  for bonus of the workmen of the Factory at A will be decided  on the  results  of  the Factory working at A and  not  on  the combined result of the working of the two factories at A and B. If of these two places, one is in India, and the other in a foreign country, that will make no difference; for it will still be (1) 1960 (1) L. L.  1.  (2) 1960 ( 1) L. L. J 497, (3) 1916 (3) F. L.R. 369. (4) 1962 (1) L.L.J. 275, (5) 1962 (1)L.L.J.388 462 possible  to  ascertain the different items for  the  appli- cation of the Full Bench Formula.      It is difficult to see however how the operations of  a company carrying on transport business between two different places  can  be  said  to be carried  on  as  different  and distinct  industrial activities at these two places.  It  is unnecessary  to  discuss in detail the  application  of  the tests  mentioned above for deciding whether  the  companies’ operations  in Pakistan and their operations in  India  form two  different  units  of industrial activity  or  they  are really one as Mr.Chatterjee, who appeared before us for  the appellants,  did not  seriously contend that they  form  two different  units.  It was however strenuously  contended  by Mr.  Chatterjee that assuming that the operations  in  India and   Pakistan  form  part  of  one  integrated   industrial activity, a way should still be found for separating the two sets of operations for the purpose of the application of the Full Bench Formula.  The bulk of the companies’  operations, Mr.  Chatterjee, contends, is carried on in india.   As  the companies’  own witness admits, 61.4% of the total  receipts was  in India. It appears reasonable to think also that  the greater  part of the traffic was from one point  to  another point in India.  The workmen contend that a proper  scrutiny of the companies’ accounts would show that these  operations where  the traffic originated in India and  the  destination was  also  in  a part of  India,  resulted  in  considerable profits  to the companies, and it will be unjust  that  they should be denied a share of the profits in the form of bonus merely because other operations carried on by the companies, whether within Pakistan or between India and Pakistan resul-

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ted  in loss.  It is suggested that conditions  in  Pakistan are so very different from conditions in India that it would be denial of justice to the workmen in India to tie them  to whatever happened in Pakistan.  We find it impossible to say that there is not much force in these submissions.  We might have been  463 prepared therefore to consider whether it would be  possible to  evolve some principles for the application of  the  Full Bench  Formula  to these peculiar conditions,  if  we  could derive  assistance  for  the same on the  materials  on  the record.   The  evidence  that has been  given  in  the  case however  affords us little assistance in the  matter.   This becomes painfully clear when we try to apply the Full  Bench Formula to the facts of the case.      At  the  threshold of the task, we are faced  with  the difficulty of ascertaining the profits of the companies  for what  is  called its "’Indian  operations".   Assuming  that wherever  the  traffic originates in India the  receipts  in freights  and  fares  for such traffic  should  be  held  to constitute the receipts for the Indian operations, even such an   approximation  cannot  possibly  be  applied   to   the allocation  of the expenditure.  For the same  vessel  which carries  traffic originating say, in Calcutta in India to  a destination  in India. say, Dibrugarh in Assam, would  often carry traffic also from Calcutta to some points in  Pakistan and from points in Pakistan to some points in Assam.   There is  no indication in the evidence we have got on the  record to  show  how in these circumstances the  total  expenditure incurred   should   be  allocated  between   purely   Indian operations of the traffic and the rest.      Mr. Chatterjee drew our attention to a notification  of the  Government of India dated December 10, 1947 which  gave effect  to  an  agreement  between  the  Government  of  the Dominion  of  India and the Government of  the  Dominion  of Pakistan for the avoidance of double taxation of income, and suggested  that the principles laid down in  this  agreement for calculating what proportion of the total income each  of the  Dominion  would  be entitled to charge  in  respect  of concerns, which do business both in India and Pakistan,  may be coveniently applied for 464 ascertaining the profits, for the Indian operations, for the purpose of the Full Bench Formula.      It  is difficult to see how this agreement between  the two Governments for the specific purpose of action under the Income-tax  Act  can  furnish a just  or  proper  basis  for computation of profits for the purpose of Full Bench Formula for bonus.      Assuming, however, that some guidance is available from what  is stated in this agreement as to the  calculation  of the  profits for the companies’ operations in India.,  other difficulties  in the way of applying the Full Bench  Formula still  remain.  How is one to calculate the paid-UP  capital on  which  interest  is  to  be  allowed?   Admittedly,   no demarcation  is made between vessels used in the  companies’ purely  Indian operations and vessels used for  the  traffic within Pakistan and for traffic between India and  Pakistan. As we have mentioned earlier, the same vessel may carry  and will   in  many  cases  actually  carry  cargo  for   Indian destinations as also for Pakistani destinations.  As far  as we can see from the evidence on the record there is no  easy way  of  ascertaining  what portion of  the  total  paid  up capital of the companies could be said to have been used for the purpose of the Indian operations.it is equally difficult

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to ascertain the extent of the working  capital   used   for their  Indian operations. Unless these difficulties  can  be removed  it is not possible to arrive at any figure for  the prior charges to be deducted on account of interest on paid- up capital and interest on working capital.  Equally  diffi- cult  is  the  assessment of the amount  necessary  for  re- habilitation.   By  far the major part of the  capital  that will  require  rehabilitation ’consists of  the  vessels  in which the goods and passengers are carried.  If it was known that  out of the total fleet of 600 or 700 vessels some  are car-marked  for  purely  Indian  operations,  it  might   be possible to find out what was required  465 for  their rehabilitation  Admittedly, however, there is  no such  earmarking.   Apart from the fact as  mentioned  above that an identical vessel is often used for carrying goods of the  purely  Indian  traffic as also goods  of  the  traffic within  Pakistan and the traffic between India and  Pakistan in  one  and the same trip, it also seems likely  that  some vessels  which  are at times confined  to  purely  Pakistani traffic  are  from  time  to  time  transferred  to   Indian ’traffic.   In these circumstances, it is not possible  with the  materials at our disposal to ascertain the  amount  for rehabilitation  of  the capital used for  Indian  operations only.      Learned  Counsel  for the appellant  was  conscious  of these  difficulties.   He appealed to us however to  try  to find  out some means for applying the Full Bench Formula  to the  companies’ Indian operations.  He himself has not  been able   to  suggest  any  solution  to  the  problem   except suggesting  that a way out may be found by apportioning  the income, expenditure, paid-up capital and working capital for the entire operations in India and Pakistan between those in India and those in Pakistan  Some of the difficulties in the way  of such apportionment have been indicated by us  above. We  must hot however be understood to say that the  task  is wholly impossible of achievement.  It may be that in another case  the  workmen may be able to adduce  such  evidence  by examining  expert witnesses, like actuaries, accountants  or others  that the tribunals may feel justified in  computing, in  respect  of  the Indian  business,  reasonably  accurate figures  for the different items of the Full Bench  Formula. All  we wish to say is that on the materials on the  present record  we  are not in a position to apply  the  Full  Bench Formula to a part only of the total operations of the compa- nies in India and Pakistan.      We  have  therefore  come to the  conclusion  that  the Labour Appellate Tribunal has rightly rejected 466 the workmen’s claim for bonus for the years, 1949, 1950,1951 and 1952.      Before we part with these appeals, we have to refer  to a  complaint vehemently pressed before us by Mr.  Chatterjee that  there  has  not been a fair  hearing  of  these  cases inasmuch  as the workmen or their representatives  were  not given  access to certain account books which they wanted  to consult.   We  think it necessary to examine  how  far  this complaint  is  justified as, in our opinion, even  if  these account  books were made available to the workmen, it  would be  impossible on the materials on the record to  arrive  at proper figures for the different items involved in the  Full Bench Formula.  We think it proper however to emphasise  the importance of both employers and workmen making available to industrial  adjudication  all  relevant  papers,   including account  books which are likely to assist a proper  decision

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of  the questions at issue.  The provisions of s. 21 of  the Industrial  Disputes.  Act afford ample  protection  against disclosure  of  information  which a party may  wish  to  be treated   as   confidential.    Where   workmen   or   their representatives  ask  for  inspection  of  such  papers  and account  books,  it should ordinarily be  possible  for  the employers to comply with the request, Subject however to the protection  of s. 21 of the Industrial Disputes  Act.   When any  such  prayer  is  made, the Tribunal  has  to  use  its judicial discretion in the matter and in the absence of any- special  circumstances  would  ordinarily  be  justified  in asking the employers to give to the workmen reasonable access to all relevant papers.      As  has  been  stated  above,  we  have  come  to   the conclusion that the Appellate Tribunal has rightly  rejected the workmen’s claim for bonus.  The appeals are  accordingly dismissed.  There will be no order as to costs.                                            Appeals dismissed  467