Case: Delhi Cloth &amp; General Mills Co. Ltd Vs. The Workmen &amp; Ors

:"The Unions agree to withdraw their disputes regarding payment of additional bonus for the years I960-61 1961-62 and 1962-63 unconditionally. Any further modification or change in the Bonus Commission formula will not affect these years."Clauses 5, 6 and 7 are not relevant.21. It is clear from the above that the agreement related entirely to the years I960-61, 196I-62, 1962-63 and 1963-64. There is no statement anywhere about the workers being bound to accept any figure of allocation with regard to the year 1964-6522. The only other document to which our attention was drawn bears the date 13th December 1965 and this also was executed by and between the same parties. The document is divided into two portions, the first being a short recital of the case and the second being the terms of settlement divided into eight paragraphs. The recitals of the case show that the bonus for the year ending 30th June 1964 was paid to the workmen of the two Textile Mills in accordance with the agreement dated 27th October 1964 between the Management and the Kapra Mazdoor Ekta Union representing the workmen and that the payment was made according to the Bonus Commission Formula as accepted and modified by the Government. Under the aforesaid agreement, it was agreed that in case any further alteration or modification in the Bonus Formula were made by the Government, the workers would be entitled to receive benefit of the same. The workers had accordingly raised a demand for additional bonus in terms of para. 3 of the Agreement, dated 27th October 1964. The Kapra Mazdoor Ekta Union and the Textile Mazdoor Sangh representing an overwhelming majority of the workmen of Delhi Cloth Mills and Swatantra Bharat Mills had moved the Conciliation Officer for settlement of this demand for additional bonus. After mutual negotiations with the help and assistance of the Conciliation Officer, the parties had agreed to settle the matter on the following terms and conditions. Then follow the terms of settlement. The first is to the effect that the workers reiterate and reaffirm the agreement dated 27th October 1964. The second clause is to the effect that the parties agree to calculate the quantum of bonus payable for the year ending 30th June 1964 on the basis of the Formula laid down under Ss. 6 and 7 of the Payment of Bonus Act, 1965, taking together the pooled profits of Delhi Cloth Mills and Swatantra Bharat Mills calculated on the basis. According to this, the total amount of bonus payable worked out to Rs. 30-25 lacs and the rate of bonus payable worked out to 10.43 per cent of the total earnings which was not based on any base year. According to Cl. 3. the company agreed to pay the additional balance amount of bonus due to the workmen at the rate of 3.10 per cent of the total earnings for the year ending 30th June 1964 within a period of three days. Clause 4 is not material. According to Cl. 5, as regards the amount of Rs. 2.90 lacs paid by the company in consideration of withdrawal of disputes for the years 1960-61, 1961-62 and 1962-63, it was agreed that the company would be entitled to adjust that amount of Rs. 2.90 lacs against the total amount of bonus payable to the workers for the year, in which the actual disbursement of such arrears, if any, might have to be made, subsequent to the year 1964-65, as a result of any award of the Court. Clause 6 runs as follows :"It is, further, agreed between the parties that the calculation of rate of bonus payable for the year 1964-65 will he made on the basis of formula laid down under Ss. 6 and 7 of the Payment of Bonus Act. This will, however, be done soon after the General Meeting of the shareholders of the Company in which the accounts for the aforesaid year will be passed by the share holders. The actual disbursement of the bonus for this year will commence after 15 days of the holding of the Annual General Meeting. In case a settlement in regard to rate of bonus is arrived at, the negotiations for it will start immediately."23. It will be noticed from the above that the entire settlement was with regard to the additional bonus for the year ending June 30, 1964 and only Cl. 6 had some relation to the bonus payable for the year 1964-65. With regard to that there really was no agreement excepting that the rate of bonus would be on the basis of the Formula laid down in Ss. 6 and 7 of the Payment of Bonus Act. Section 6 of the Payment of Bonus Act shows what sums are to be deducted from the gross profits as prior charges for the computation of the available surplus under S. 5 of the Act. Section 7 lays down that for the purpose of Cl. (c) of S. 6 any direct tax payable by the employer for any accounting year shall, subject to the provisions mentioned, be calculated at the rates applicable to the income of the employer for that year. Clause 6, therefore, only prescribes that the parties could proceed on the basis of the formula laid down in Ss. 6 and 7 of the Payment of Bonus Act. The last portion of Cl. 6 shows that the parties contemplated that they would be able to arrive at a settlement with regard to the rate of bonus for which negotiations were to start immediately. From this, it is impossible to spell out any agreement between the parties with respect to the bonus for the year 1964-65 or the allocation of capital and reserves of the company to the two units in calculating the bonus statement.24. In our view, therefore, the parties were not bound by any agreement with regard to issue No. 1 and the Tribunal will have to take evidence to come to a finding on that issue.

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

Explanation:
1[ds]9. From the above it therefore appears that while it is open to the appropriate Government to refer the dispute or any matter appearing to be connected therewith for adjudication, the Tribunal must confine its adjudication to the points of dispute referred and matters incidental thereto. In other words, the Tribunal is not free to enlarge the scope of the dispute referred to it but must confine its attention to the points specifically mentioned and anything which is incidental thereto.In our opinion there was enough material on the record in that case to show that the company, had been trying, for some time past to transfer its business elsewhere and the action of the appellant which followed the strike on April 27, 1959 was in fact a closure and not aThe facts of that case were very special and the decision must be limited to those special facts.In the case before us, there is no such difficulty. The third and the fourth terms of reference in the instant case are founded on the basis that there was a strike at the Delhi Cloth Mills and astrike at the Swatantra Bharat Mills and that there was adeclared by the management of the Delhi Cloth Mills on 24th February l966. On the order of reference, it was not competent to the workmen to contend before the Tribunal that there was no strike at all; equally, it was not open to the management to argue that there was nodeclared by it. The parties would be allowed by their respective statement of cases to place before the Tribunal such facts and contentions as would explain their conduct or their stand, but they could not be allowed to argue that the order of reference was wrongly worded and that the very basis of the order of reference was open to challenge. The cases discussed go to show that it is open to the parties to show that the dispute referred was not an industrial dispute at all and it is certainly open to them to bring out before the Tribunal the ramifications of the dispute. But they cannot be allowed to challenge the very basis of the issue set forth in the order of reference.On behalf of the respondents, Mr. Chari put before us four propositions which according to him the Tribunal had to consider before coming to a decision on these two issues. They were: (i) The fact that there was a recital of dispute in the order of reference did not show that the Government had come to a decision on the dispute; (ii) The order of reference only limited the Tribunals jurisdiction in that it was not competent to go beyond the heads or points of dispute; (iii) Not every recital of fact mentioned in the order of Government was irrebutable; and (iv) In order to fix the ambit of the dispute it was necessary to refer to the pleadings of theparties No exception can be taken to the first two points The correctness of the third proposition would depend on the language of the recital.In our opinion, the Tribunal must, in any event, look to the pleadings of the parties to find out the exact nature of the dispute, because in most cases the order of reference is so cryptic that it is impossible to cull out therefrom the various points about which the parties were at variance leading to the trouble. In this case, the order of reference was based on the report of the Conciliation Officer and it was certainly open to the Management to show that the dispute which had been referred was not an industrial dispute at all so as to attract jurisdiction under the Industrial Disputes Act. But the parties cannot be allowed to go a stage further and contend that the foundation of the dispute mentioned in the order of reference wasand that the true dispute was something else. Under S. l0 (4) of the Act it is not competent to the Tribunal to entertain such a question.19. In our opinion, therefore, the Tribunal had to examine issues 3 and 4 on the basis that there was a strike at the D.C.M. unit and astrike at Swatantra Bharat Mills and that there was adeclared with regard to the former as stated in the third term of reference. It was for the Tribunal to examine the evidence only on the question as to whether the strikes were justified and legal. It then had to come to its decision as to whether the workman were entitled to the wages for the period of thein the Delhi Cloth Mills and for the period of thestrike at the Swatantra Bharat Mills.We have therefore to refer to the documents to which our attention was drawn to see whether there was such an agreement. The first issue relates to the allocation of capital and reserves of the company to the two units, viz., Delhi Cloth Mills, and Swatantra Bharat Mills for calculating the bonus table for the accounting year ending 30th June 1965.It is clear from the above that the agreement related entirely to the years63 andThere is no statement anywhere about the workers being bound to accept any figure of allocation with regard to the yearIt will be noticed from the above that the entire settlement was with regard to the additional bonus for the year ending June 30, 1964 and only Cl. 6 had some relation to the bonus payable for the yearWith regard to that there really was no agreement excepting that the rate of bonus would be on the basis of the Formula laid down in Ss. 6 and 7 of the Payment of Bonus Act. Section 6 of the Payment of Bonus Act shows what sums are to be deducted from the gross profits as prior charges for the computation of the available surplus under S. 5 of the Act. Section 7 lays down that for the purpose of Cl. (c) of S. 6 any direct tax payable by the employer for any accounting year shall, subject to the provisions mentioned, be calculated at the rates applicable to the income of the employer for that year. Clause 6, therefore, only prescribes that the parties could proceed on the basis of the formula laid down in Ss. 6 and 7 of the Payment of Bonus Act. The last portion of Cl. 6 shows that the parties contemplated that they would be able to arrive at a settlement with regard to the rate of bonus for which negotiations were to start immediately. From this, it is impossible to spell out any agreement between the parties with respect to the bonus for the yearor the allocation of capital and reserves of the company to the two units in calculating the bonus statement.24. In our view, therefore, the parties were not bound by any agreement with regard to issue No. 1 and the Tribunal will have to take evidence to come to a finding on that issue.