Appeal No 402 of 1958
Appeal by special leave from the Award dated January 29 1957 of the Industrial Tribunal Bihar at Patna in Reference No 7 of 1956
Sukumar Ghose for the appellant
M K Ramamurthi R K Garg A N Nag and Suresh Aggarwal for the respondents
section P Varma for the intervener State of Bihar
March 9
The Judgment of the Court was delivered by WANCHOO J
This is an appeal by special leave against the award of the Industrial Tribunal Patna
The appellant is a Sugar Mill in District Saran in the State of Bihar
One Ramkrishna Prasad was appointed as clerk in this mill in 1933
Gradually he worked his way up and was drawing Rs 140 per month in October 1952
The mill created a new post of store in charge about that time as the work in the Stores Department of the Mill had increased
On October 4 1952 Babulal Parekh was appointed to this new post on a consolidated salary of Rs 180 per menses
A letter of appointment was issued to him on that date and he was told that he would be on probation for one year
He was also asked by another letter to take charge immediately
He took charge on October 7 1952
On November 28 1952 an order was passed by the mill distributing the duties between the various clerks employed in the Stores Department and it was stated therein that all the staff of the Stores Department would work as subordinate to Babulal Parekh
On December 2 1952 another order was passed by which Ramkrishna Prasad was ordered to hand over the keys of the stores to Babulal Parekh
Thereafter Ramkrishna Prasad made a representation against his being made subordinate to the stores in charge
This representation was rejected
A dispute was then raised by the union and a reference was made by the Government of Bihar on May 9 1956 in which the 216 following three matters were referred to the tribunal 1Whether the status of workman Sri Ramkrishna Prasad Store keeper and the nature of the job performed by him has been changed to his prejudice with the appointment of a separate store in charge 2Whether in view of the satisfactory performance of duties of store keeper for the last 20 years by the above named workman it was at all necessary to appoint a separate store in charge over him with higher emoluments and whether Shri Ramkrishna Prasad is entitled to be appointed to the post of store in charge and 3Whether the claim of the above named workman for promotion to higher grades has been overlooked by the management and if so what relief the workman is entitled to
When the matter came up before the tribunal the main contention on behalf of the mill was that it was exclusively the management function to decide its labour strength both qualitatively and quantitatively and that so far as Ramkrishna Prasad was concerned his position had not been prejudicially affected by the creation of the new post of a store in charge
The workmen on the other hand contended that Babulal Parekh was first appointed as a mere clerk under Ramkrishna Prasad to begin with and it was only on November 28 1952 that he was promoted over the head of Ramkrishna Prasad as a store in charge thus superseding Ramkrishna Prasad
This stand of the workmen was controverted by the mill and its case was that Babulal Parekh was from the very beginning appointed as store in charge
The tribunal came to the conclusion after a consideration of the evidence produced that Babulal was first appointed as an ordinary clerk in the Stores Department and was subsequently made a store incharge
It held that this caused reasonable heart burning to Ramkrishna Prasad
The tribunal was conscious of the principle that promotion to a higher post was the exclusive function of the management and should not ordinarily be interfered with
But 217 in spite of that it was of the view that this was a fit case for interference but on other considerations which were not specified in the order by the tribunal it held that it would not interfere with the arrangement made by the mill it instead granted an increment of Rs 30 per month from the date of its order to Ramkrishna Prasad to meet the ends of justice
It is this order which is being challenged before us
Two points have been urged before us on behalf of the appellant
In the first place it is urged that the reference was incompetent as sugar was a controlled industry and only the Central Government could have made the reference and not the State Government
Secondly it is urged that the order of the tribunal granting an increment of Rs 30 per month to Ramkrishna Prasad was patently perverse and that there was no change in the status or emoluments of Ramkrishna Prasad by the creation of the new post and the employment of Babulal Parekh on it
So far as the question of the competence of the reference is concerned we are of opinion that there is no force in it A similar question was raised before this Court in The Bijoy Cotton Mills Ltd vs Their Workmen and Another 1 and it was held there on the language of section 2a1 of the  that before that provision could apply to a controlled industry there must be a notification by the Central Government for the purposes of section 2a1 of the 
Section 2a1 is in these terms  I Appropriate Government  means in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government or by a railway company or concerning any such controlled industry as maybe specified in this behalf by the Central Government or in relation to an industrial dispute concerning a banking or an insurance company a mine an oil field or a major port the Central Government
 The argument is that as sugar is a controlled industry under the Schedule to the Industries Development and Regulation Act No 65 of 1951 the appropriate 1 1960 2 SCR 982 28 218 Government for the purposes of section 2a1 with reference to the sugar Industry is the Central Government
Reliance is placed on the words  concerning any such controlled industry as may be specified in this behalf by the Central Government  appearing in section 2 a1
It is true that sugar is a controlled industry under the Industries Development and Regulation Act 1951 but that in our opinion does not conclude the matter
In order that the appropriate government under section 2a1 may be the Central Government for a controlled industry it is necessary that such controlled industry should be specified by the Central Government for the purposes of section 2a1
This in our opinion is obvious from the words  controlled industry as may be specified in this behalf by the Central Government  appearing in section 2a1
It is not enough that an industry should be a controlled industry to attract this provision of section 2a1  it is further necessary that it should be specified in this behalf namely for the purposes of section 2a1 as a controlled industry by the Central Government before the Central Government can become the appropriate government within the meaning of section 2a1
We may in this connection refer to Firebricks and Potteries Ltd etc
vs Firebricks and Potteries Ltd Workers Union Ltd 1 where the same view has been taken
We are of opinion that is the correct meaning of these words appearing in section 2a1 as already held in The Bijoy Cotton Mills Ltd 2 
The objection that the reference was not competent therefore fails
We next come to the contention raised on behalf of the mill that there was in fact no prejudice whatsoever so far as the status and emoluments of Ramkrishna Prasad were concerned by the creation of the new post and the appointment of Babulal Parekh on it and that the tribunal was not justified in any case in granting an increment of Rs 30 per menses to Ramkrishna Prasad
The main consideration which influenced the tribunal in passing the order which it did was that in the view of the tribunal Ramkrishna Prasad was superseded by Babulal Parekh who was first appointed as a clerk under him
This view of 1 ILR 1955 MYS
2  219 the tribunal in our opinion is patently erroneous
The appointment order dated October 4 1952 clearly shows that Babulal Parekh was appointed as store inches from the very beginning at Rs 180 per month
The tribunal referred to certain entries in the attendance register to hold that Babulal Parekh worked as clerk to begin with
It appears from the attendance register for the months of October November and December that Babulal Parekh was marked present from October 7 to November 9
Thereafter from November 11 to the end of December he signed the attendance register
The statement of Cbaudhari Labour Welfare Officer of the mill was that the practice in the mill was that officers used to be marked present in the attendance register while clerks used to sign it themselves
The tribunal has concluded from the fact that Babulal
Parekh signed the register in November that he must have been a clerk to begin with
The tribunal however completely overlooked that from October 7 to November 9 Babulal Parekh was marked present which would show that he was not a clerk
The tribunal also overlooked that even from November 28 to the end of December when Babulal Parekh admittedly was not a clerk but store in charge he still signed the register though he should have been marked present
Chaudhari was unable to explain how this happened but he was hardly the person to explain this
It is however clear from this confusion that no importance can be attached to whether Babulal Parekh was marked present in the register or signed it
The real thing which determined the status of Babulal Parekh was the appointment order dated October 4 1952 which the tribunal has accepted as correct
A question was certainly put to Chaudhari at the end of his cross examination that he had manufactured the statements put in by him only the night before but he denied it
We cannot accept the suggestion on behalf of the respondents that the appointment order was ante dated for no such suggestion was made to Chaudhari and the tribunal itself does not find so
It is clear therefore that the finding of the tribunal that Babulal Parekh was appointed as 220 clerk under Ramkrishna Prasad to begin with is patently perverse and it must be held that Babulal Parekh was from the very beginning working as store in charge
Now in so far as Ramkrishna Prasad was concerned his work and emoluments remained the same after the appointment of Babulal Parekh
If a higher post was created in the Stores Department because of the increase in work Ramkrishna Prasad could not claim promotion to it merely because he was working as a store keeper before
There is of course no question of supersession in this case and therefore there is no reasonable cause for any heart burning
As the learned tribunal itself points out  promotion to higher post was the exclusive function of the management  and if a new post is created and a new man appointed as in this case it cannot be said that Ramkrishna Prasad s status was in any way prejudicially affected
It is also remarkable that after saying all that it could in favour of Ramkrishna Prasad the tribunal did not interfere with the arrangement made by the mill for reasons which were not specified by it in the order
As such there was no reason for granting an increment of Rs 30 per mensem to Ramkrishna Prasad for even the workmen did not claim that he was entitled to any compensation in the shape of an increment in his pay because of the appointment of Babulal Parekh
The order of the tribunal therefore is patently unsupportable and must be set aside
We therefore allow the appeal and set aside the order of the tribunal and hold that no relief is due to Ramkrishna Prasad
In the circumstances we pass no order as to costs
Appeal allowed


Summary:
Can the Full Bench formula for calculation of bonus apply to a claim of bonus made by workmen engaged in electricity con cerns and undertakings  That was the question raised for decision in this appeal
A Special Bench of the Labour Appellate Tribunal held in the affirmative and the correctness of its decision was challenged in this appeal
It was contended on behalf of the appellant company that the Electricity Supply Act 1948 54 Of 1948 was a self contained code intended to regulate the business and affairs of electricity concerns and that Act and not the formula applied to a claim of bonus by the workmen in an electricity concern
1 1933  201
69 Held that the Special Bench had taken a correct view of the matter and its decision must be upheld
It is evident from the provisions of the Electricity Supply Act 1948 and its schedules that the respective fields of operation of the Act and of the principles of industrial adjudication are wholly different and so there can be no conflict between them and their relevance and validity in their own spheres are beyond question
While the Full Bench formula seeks to ensure social justice to workmen by apportioning a share of the profits to them and thus minimise the gap between the actual and the living wages the Act does not provide for wages at all
But it is improper to suggest on that basis that the workmen in electricty undertakings can be denied social justice
just as the relevant industrial principles have to be applied for framing a wage structure for such workmen so also must the problem of bonus be solved in a like manner
The working sheet prepared under the method of accounting required by the Act can be no basis for calculation of the amount of bonus since it is not possible to ascertain the gross profit therefrom and the Full Bench Formula has to be applied on the basis of the profit and loss account which a company has to keep under the Companies Act
Bayoda Boyough Municipality vs Its Workmen
1957 SCR 33 referred to
Moreover the intention of the Legislature in enacting cl
vi of paragraph 172b of Sixth Schedule to the Act clearly was to include a claim of bonus is within the expenses covered by it and it was to set at rest any possible doubt on that score that cl
xiii was added by a subsequent amendment