Case: Workmen of National Tobacco Company, Limited Vs. National Tobacco Company, Limited

our opinion, the argument of the appellants is well-founded and must be accepted as correct. It is well-established that the onus is on an employer to prove the claim to rehabilitation by leading positive and reliable evidence. [See Associated Cement Companies, Ltd. (Dwarka Cement Works, Dwarka and Bombay), and others v. Their workmen (1959 - I L.L.J. 644).] The employer has to prove the price of the plant and machinery, its age, the period during which it requires replacement, the cost of replacement, the amount standing in the depreciation and reserve fund, and to what extent the funds at his disposal would meet the cost of replacement. If the employer fails to lead satisfactory evidence on these points, the claim for rehabilitation must be rejected. In the present case, the company has not adduced satisfactory evidence before the tribunal for determining the multipliers or divisors for calculating rehabilitation charges. Two witnesses were examined on behalf of the company, viz., Sri Ajit Kumar Mitra, accountant, O.P.W. 1, and Sri A. M. Sen, ex-general factory manager, O.P.W. 2. Sri Ajit Kumar Mitra admitted that he had no expert knowledge for determining either multipliers or divisors. His evidence was based partly on the recent price list of machineries and partly on the information obtained from Sri A. M. Sen, ex-general factory manager. Sri A. M. Sen, O.P.W. 2, conceded that he was not an engineer and that he had no particular facts or figures in his possession to show as to how the calculation was made. Sri A. M. Sen admitted that he had no diploma or degree in mechanical engineering. He had originally worked as a chemist in the company. He admitted there were mechanical, electrical and refrigerator engineers in the company. No evidence has been adduced on behalf of the company to explain why a mechanical engineer was not examined for determining either multipliers or divisors for calculating the rehabilitation charges. The tribunal has subjected the evidence of O.P.Ws. 1 and 2 to much criticism and has, in substance, rejected their evidence on this point. The tribunal has thereafter determined the multipliers and divisors on its own calculation and by a process of guess-work. In our opinion, therefore, the findings of the tribunal are vitiated because of total lack of evidence to support them. It is manifest that the company has failed to produce positive and reliable evidence on the question of rehabilitation and the amount of extra rehabilitation charges, viz., Rs. 7, 30, 931, allowed by the tribunal must be therefore added back to the total available surplus mentioned in the award. We, therefore, determined the amount of available surplus to be Rs. 14, 32, 460 plus Rs. 7, 30, 931 equal to Rs. 21, 63, 391. The monthly remuneration paid to the employees during the year 1960 was Rs. 5, 56, 456 and taking into account all the circumstances of the case we consider that the workmen can legitimately claim two months wages as bonus. We, therefore, direct that the company should pay to the workmen for the year 1960, two-twelfths of the annual wages as bonus. There is no evidence adduced before the tribunal to show as to what is the total amount of basis wages paid to the workmen. The evidence only indicates the payment of the consolidated wages. We accordingly direct that bonus be calculated, in the particular circumstances of this case, on the basis of consolidated wages. In making the direction that two-twelfths of the annual wages should be paid as a bonus, we have borne in mind the fact that the respondent will get rebate of Income-tax on the additional amount of bonus which he has been ordered to pay.We should make it clear that it will be open to the company to adduce better evidence with regard to its claim for rehabilitation for the year 1961 or any other succeeding year and the quantum of bonus determined in the present case for the year 1960 will not be treated as a binding precedent for succeeding years.4. Sri Chari, on behalf of the appellants, stressed another point in the course of the argument. It was submitted that in the distribution of the available surplus the tribunal has not granted a fair and equitable share to the workmen. Sri Chari pointed out that the wage-structure of the company has not reached the standard of living wage. It was pointed out by the learned counsel that the company had declared 16 per cent. dividend on its ordinary shares. Reference was also made to the circumstance that the company has built up substantial reserve to the extent of over a crore of rupees which is composed of general reserve and reserve for capital expenditure. In our opinion, there is substance in the argument advanced by Sri Chari. It is true that no inflexible rule can be laid down as regards the distribution of the available surplus but taking all the relevant factors into consideration as pointed out in Associated Cement Companies, Ltd. (Dwarka Cement Works), and others v. Their workmen [1959 - I L.L.J. 644] (vide supra) we are of opinion that the workmen are entitled to about half the available surplus as calculated above. In the absence of any exceptionable circumstance it would normally not be unreasonable if the distribution of available surplus is made in such a manner as to leave to the employer and industry on the one hand, and the workmen, on the other hand, approximately equal benefits. We are, therefore, directing in this case that the company should pay to the workmen for the year 1960 about Rs. 11, 12, 000 and odd equivalent to two-twelfths annual wages calculated on the basis of consolidated wages.For the reasons already given we direct that the award of the industrial tribunal shall be modified and the workmen should be paid two-twelfths of the annual wages as bonus for the year 1960 and the calculation of bonus should be made on the basis of consolidated wages.5.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In our opinion, the argument of the appellants isand must be accepted as correct. It isthat the onus is on an employer to prove the claim to rehabilitation by leading positive and reliable evidence. [See Associated Cement Companies, Ltd. (Dwarka Cement Works, Dwarka and Bombay), and others v. Their workmen (1959I L.L.J. 644).] The employer has to prove the price of the plant and machinery, its age, the period during which it requires replacement, the cost of replacement, the amount standing in the depreciation and reserve fund, and to what extent the funds at his disposal would meet the cost of replacement. If the employer fails to lead satisfactory evidence on these points, the claim for rehabilitation must be rejected. In the present case, the company has not adduced satisfactory evidence before the tribunal for determining the multipliers or divisors for calculating rehabilitationour opinion, therefore, the findings of the tribunal are vitiated because of total lack of evidence to support them. It is manifest that the company has failed to produce positive and reliable evidence on the question of rehabilitation and the amount of extra rehabilitation charges, viz., Rs. 7, 30, 931, allowed by the tribunal must be therefore added back to the total available surplus mentioned in the award. We, therefore, determined the amount of available surplus to be Rs. 14, 32, 460 plus Rs. 7, 30, 931 equal to Rs. 21, 63, 391. The monthly remuneration paid to the employees during the year 1960 was Rs. 5, 56, 456 and taking into account all the circumstances of the case we consider that the workmen can legitimately claim two months wages as bonus. We, therefore, direct that the company should pay to the workmen for the year 1960,of the annual wages as bonus. There is no evidence adduced before the tribunal to show as to what is the total amount of basis wages paid to the workmen. The evidence only indicates the payment of the consolidated wages. We accordingly direct that bonus be calculated, in the particular circumstances of this case, on the basis of consolidatedshould make it clear that it will be open to the company to adduce better evidence with regard to its claim for rehabilitation for the year 1961 or any other succeeding year and the quantum of bonus determined in the present case for the year 1960 will not be treated as a binding precedent for succeedingour opinion, there is substance in the argument advanced by Sri Chari. It is true that no inflexible rule can be laid down as regards the distribution of the available surplus but taking all the relevant factors into consideration as pointed out in Associated Cement Companies, Ltd. (Dwarka Cement Works), and others v. Their workmen [1959I L.L.J. 644] (vide supra) we are of opinion that the workmen are entitled to about half the available surplus as calculated above. In the absence of any exceptionable circumstance it would normally not be unreasonable if the distribution of available surplus is made in such a manner as to leave to the employer and industry on the one hand, and the workmen, on the other hand, approximately equal benefits. We are, therefore, directing in this case that the company should pay to the workmen for the year 1960 about Rs. 11, 12, 000 and odd equivalent toannual wages calculated on the basis of consolidated wages.For the reasons already given we direct that the award of the industrial tribunal shall be modified and the workmen should be paidof the annual wages as bonus for the year 1960 and the calculation of bonus should be made on the basis of consolidated wages.