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PETITIONER: K.C. P. EMPLOYEES’ ASSOCIATION, MADRAS

       Vs.

RESPONDENT: MANAGEMENT OF K. C. P. LTD., MADRAS

DATE OF JUDGMENT24/01/1978

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. SINGH, JASWANT

CITATION:  1978 AIR  474            1978 SCR  (2) 608  1978 SCC  (2)  42  CITATOR INFO :  R          1982 SC  78  (8)

ACT: Payment  of  Bonus  Act  (Act  21),  1965,  s.  3,   proviso to--Applicability of.

HEADNOTE: Management-respondent  is a public limited company  carrying on three business adventures viz., manufacture of sugar,  of cement   and  of  heavy  engineering  machinery,  at   three different  places.   In  respect  of  the  workers  of,  the engineering  unit known as Central Workshops and  which  was financially  ill,  the management demurred  the  payment  of bonus under the Act for the years 1964-65 and 1965-66 on the ground that the central workshop was a separate  undertaking to  which the proviso to Section 3 applied and  consequently the  claim for bonus on the basis of a single  establishment within  the  meaning of the main s. 3  was  untenable.   The Labour  Tribunal, however, upheld the claim of  the  workmen for  both  the  years.   When  the  said  two  awards   were challenged by a writ petition, a single Judge of Madras High Court  upheld the award for 1964-65.  In further  appeal  by the management, the Division Bench set aside both the awards for 1964-65 and 1965-66 and directed the Tribunal to correct certain errors. Dismissing the appeals by special leave with directions  for expediting  and completing the lis within three months,  the Court HELD : 1. In Industrial law, interpreted and applied in  the perspective  of Part IV of the Constitution, the benefit  of reasonable doubt on law and facts, if there be such  doubt, must go to the weaker section, labour. [610 B-C] 2.In the instant case : (a) Proviso to s. 3 is attracted. Separate  balance  sheet and profit and loss  accounts  have been  prepared  and maintained in the past  and  during  the relevant years of accounting also and (b) The High Court  is right  in directing the Tribunal to re-enquire, rectify  the balance sheets and profit and loss accounts for the years in question  taking  due note of the requirements of  the  Act. [609 G-H, 610 A] Alloy Steel Project v. The Workmen, [1971] 3 SCR 620  (ratio inapplicable)

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JUDGMENT: CIVIL  APPELLATE JURISDICTION : Civil Appeal Nos.  2142-2143 of 1970. Appeal  from  the Judgment and Order dated 3-9-1970  of  the Madras  High  Court in Writ Appeals Nos’ 350/68  and  76  of 1969. M. K. Ramamurthi, M. P. Dhar and Vineet Kumar for the Appel- lant. V.   M. Tarkunde and Naunit Lal for Respondent No. 1. B.   P. Singh for Respondent No. 2. For  Respondent No. 3 in CA 2142 and RR 3-6 in C.A.  2143/70 ex-parte. The Judgment of the Court was delivered by KRISHNA   IYER,  J.-Affirming  judgments  need   not   speak elaborately,  and so, in these two appeals where we  do  not disagree  with  the High Court, only a  brief  statement  of reasons is called for. The   subject  matter  is  a  bonus  dispute   between   the management respondent and the workmen union revolving  round the applicability 609 of  the  proviso to Section 3 of the Payment of  Bonus  Act, 1965  (hereinafter  referred to as the Act)  for  the  years 1964-65 and 1965-66.  A thumbnail sketch of the facts : The  K. C. P. Limited, a public limited company, carries  on three  business adventures, viz., ’manufacture of sugar,  of cement  and of heavy engineering machinery.   The  concerned factories  are in three different places in South India  and employ workmen on different terms in three different  units. We are directly concerned with the engineering unit known at the Central Workshops run at Tiruvottiyur, Madras.  When the Payment  of Bonus Act, 1965 came into force the  workmen  of this unit, which was financially faring ill unlike the other two  sister  units, demanded bonus on the footing  that  the three   different  undertakings  must  be  treated  as   one composite  establishment  and on the basis  of  the  overall profits, bonus must be reckoned as provided in the Act.  The respondent demurred on the ground that the Central  workshop was a separate undertaking to which the proviso to Section 3 applied and consequently the claim for bonus on the basis of a   single  establishment  was   untenably   over-ambitious. Although the concerned unit was perhaps a losing proposition for  the  relevant years, (we do not know for  certain)  the Tribunal upheld the claim of the workmen for both the years, but the two awards were challenged, by Writ Petition, in the High  Court.  The award relating to 1964-65 was upheld by  a Single Judge of the High Court who took the view that  since all  the  three  units,  though  divergent  and  located  in different  places,  were  owned by  the  same  company  and, therefore,  without more, were covered by the main  part  of Section  3  and  the  proviso  stood  repelled.   Two  other questions, which had engaged the attention of the  Tribunal, were scantily dealt with, the findings, if one may call them so,  being  adverse  to the workmen.   The  management  duly carried  an  appeal before a Division Bench  of  that  Court which also called up and heard the Writ Petition against the award  relating to the year 1965-66.  Both the  awards  were set  aside,  the holdings on the  substantial  points  being adverse to the workmen.  However, certain follow-up  inquiry had to be done by the Tribunal to correct errors, for  which limited  purpose  there was a direction by the  High  Court. The  matter stood at that stage and the two appeals in  this

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Court  are aimed against the decision of the Division  Bench of the High Court. The  first point that appealed to the learned Single  Judge, but  failed  before the Division Bench,  has  admittedly  no merit  in  the light of this Court’s direct  ruling  on  the point. The  second  point urged by Shri M. K. Ramamurthy  that  the Central Workshop has had no ’separate, viable  balance-sheet and   profit   and  loss  accounts  in  respect   of’   that undertaking,  and  that such is the finding of fact  by  the Tribunal,  does not appeal to us.  Nor is there life in  the third  limb of this argument that the respondent has  failed to  show that the Workshop has not been treated as  part  of the  common establishment for the purpose of computation  of bonus.   We  agree  with the  appellate  judgment  that  the proviso is attracted.  Separate balancesheet and profit  and loss accounts have been prepared and maintained in the  past and during the relevant years of accounting also, although 610 there  is  much force in the contention that they  have  not been’  properly  maintained.   Some  items  which  may  help enhance  the bonus have, perhaps, been omitted and the  High Court  is  right in directing the  Tribunal  to  re-enquire, rectify the balance-sheets and profit and loss accounts  for the  years in  question taking due note of the  requirements of  the  Act as mentioned in the judgment  of  the  Division Bench  vis-a-vis  Central Workshop.  We  are  in  respectful agreement  with the decision in Alloy Steel Project  v.  The Workmen(1)  but  do  not regard the ratio of  that  case  as applicable to the present case on the facts. In   Industrial   Law,  interpreted  and  applied   in   the perspective  of Part IV of the Constitution, the benefit  of reasonable  doubt on law and facts, if there be such  doubt, must  go to the weaker section, labour.  The  Tribunal  will dispose  of the case making this compassionate approach  but without over-stepping the proved facts, correct the balance- sheets and profit and loss accounts of the Central  Workshop to  the  extent justified by the Act and  the  evidence  and finish the lis within three months of receipt of this order. The appeals are dismissed.  No costs. S.R. Appeals dismissed. (1) [1971] (3) S.C R. 629. 611