Case: The Indian Oxygen &amp; Acetylene Co.,Private Ltd., Bombay Vs. Its Workmen &amp; Another

calculations have been made which are open to objection. Before dealing with these objections it may be stated generally that when Mr. Saigal and Mr. Basak gave evidence they were not asked any definite or precise questions on which the objections urged before us are based.It is desirable that in enquiries of this kind, when experts give evidence on behalf of the employer, workmen should cross-examine them on all points which they propose to urge against the employers claim in regard to rehabilitation. However, we would like to deal with the merits of the said contentions in the light of such evidence as is available on the record. 15. The first contention is that the assets which have spent their lives and are thus exhausted should not be continued in making calculations under the weightage method. This objection applies to such assets as lease-hold buildings, cars and trucks.We are inclined to think that the method adopted by the appellant in making its calculations gives a more correct picture of the assets actually in use and the rehabilitation cost claimed in respect of them.If in the relevant year the asset is in existence and use, a claim for its rehabilitation would not become inadmissible.The same argument is put in another form and it is urged that where an asset which has come to an end is taken into account it would be wrong to take into account in the same year a new asset which has come into existence. The suggestion is that by this method a double claim for rehabilitation creeps into the calculation. We are not satisfied that even this argument is well-founded. Let us examine this argument by reference to one item. The lease-hold buildings of the appellant include two buildings known as D. A, and Oxygen respectively at Bombay (Ex. C. 19). As on 30-9-1953, the estimated life of these buildings from 1-10-1953 is shown to be one year and the annual provision claimed for rehabilitating them is shown as Rs. 97,468 and Rs. 30,590 respectively. These claims have not been made in the subsequent year. In the same year two new buildings called D, A. and Oxygen respectively which were erected in 1952 have been included and the annual provision for rehabilitation in respect of them is made at Rs. 6,474 and 6,972 respectively. Now, if the respondents argument is accepted and the calculations made in regard to the new buildings were excluded from the statements, the appellant would apparently be entitled to claim a somewhat higher amount. It may be mentioned that in working out the figures for rehabilitation in respect of new buildings Ex. C. 11 has included this item of Rs. 13,000 and odd the larger item of Rs. 4,56,316 mentioned against uncovered requirement for rehabilitation and replacement in the year, whereas in deducting Rs. 2,31,700 by way of normal depreciation for the said year an amount of Rs. 22,000 and odd has been taken to be the normal depreciation in respect of the new buildings; that is to say, as against a claim of Rs. 13,000 and odd made for rehabilitation in respect of the said two buildings in Ex. C. 19 a deduction by way of normal depreciation has been allowed to the extent of Rs. 22,000 and odd. Therefore it does not appear on the evidence as it stands, that the method adopted by the appellant in making its calculations has introduced any serious infirmity or has given a distorted or inflated claim about the provision for rehabilitation. 16. In this connection it is relevant to refer to the fact that the calculations made by the appellant are based upon an item-wise study of its plant and machinery, and such a method, it is conceded, is bound to lead to more satisfactory results. Air. Basak produced Exs. C. 1 to C. 16 which contained all the relevant calculations and he stated in cross-examination that as a matter of business practice a businessman has to think of replacing his machines even thought they may have been bought in the relevant year. Of course, in considering the claim for rehabilitation in respect of such an item the multiplier would normally be 1 and the divisor would represent the total future life of the said machines. In regard to the exhausted assets the witness stated that if they are not included in the schedule the final result on Exs. C. 11 and C. 12 would be incorrect because in these statements the total depreciation provided up to the opening of the year has been deducted and this sum includes proportionate depreciation also on the assets referred to. He has also added that the total value of all fixed assets shown in Exs. C. 11 and C. 12 "have got to agree with the values shown in the balance-sheets"; and he claimed that his method of calculating weighted average of the remaining life of assets is the most correct that can be employed." Similarly Mr. Saigal was cross-examined about the Bangalore plant which had been installed in 1946. He stated that theoretically it should have a life till 1968 but in effect the plant had become so unreliable that they had to instal new one and to, keep the old one as a standby. According to this witness actually the life of the machinery enumerated in Ex. C. 20 works out to less than 22 years but for simplicity in accounting he had taken the figure to be 22. As we have already mentioned the tribunal took the view that the evidence given by the appellants witnesses in the present proceedings was satisfactory and we do not think that any material has been brought out in cross-examination which would justify the respondents contention that the tribunal had not properly appreciated the said evidence. In the result we hold that the respondents have failed to show that any of the conclusions reached by the tribunal in making its calculations under its alternative finding are wrong.

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

Explanation:
1[ds]This question has been considered by us at length in the case of Associated Cement Companies Ltd., Bombay v. Their Workmen, Civil Appeals Nos. 459 and 460 of 1957, D/- 5-5-1959: (AIR 1959 SC 967 ), andwe have held that in dealing with claims for bonus industrial tribunals must give effect to the formula. We have also indicated how the calculations under the formula should be made in such disputes. In view of the said decision we must hold that the tribunal was in error in not granting to the appellant its claim for rehabilitationThis is shown by the calculations made by it under Ex. TB. Thus it would be clear that on the alternative finding made by the tribunal the appellant would be entitled to succeed and the award under appeal would have to be set asideIt appears that the tribunal was inclined to take the view that once an allowance is made to the employer by way of rehabilitation of plant and machinery, it is not open to the tribunal to enquire what he had done with the said amount.In the A. C. C.s case, AIR 1959 SC 967 ), we have held that if an amount for rehabilitation is allowed to an employer and it appears that during the relevant year the said amount was available to him then in subsequent years the said amount will have to be taken into account unless it is shown that in the meanwhile it had been used for the purpose of rehabilitation.So we would accept the respondents contention that the appellant is bound to take into consideration the amount, previously, allowed to it by way of rehabilitationIt is now well settled that the employer is not entitled to claim a prior charge under the formula for any item of expansion but the awards previously passed between the appellant and its workmen seem to have allowed for a claim for expansion as a prior charge, and that fact cannot be ignored in dealing with the respondents present contention11. But apart from this aspect of the matter, it is clear that the appellant has brought into account one-half of its general reserve as on 30-9-1953 and 30-9-1954 respectively, and these amounts are Rs. 5,51,363 and Rs. 3,95,376: In view of this fact it is difficult to accept the argument that the amounts allowed to the appellant by way of rehabilitation in the previous-years had not been brought into account. We would like to add that this point had not been taken before the tribunal, and may be could not be taken before it, because the tribunal has held that the employer could not be called upon to bring into account the said amountNow, if the respondents argument is accepted and the calculations made in regard to the new buildings were excluded from the statements, the appellant would apparently be entitled to claim a somewhat higher amount. It may be mentioned that in working out the figures for rehabilitation in respect of new buildings Ex. C. 11 has included this item of Rs. 13,000 and odd the larger item of Rs. 4,56,316 mentioned against uncovered requirement for rehabilitation and replacement in the year, whereas in deducting Rs. 2,31,700 by way of normal depreciation for the said year an amount of Rs. 22,000 and odd has been taken to be the normal depreciation in respect of the new buildings; that is to say, as against a claim of Rs. 13,000 and odd made for rehabilitation in respect of the said two buildings in Ex. C. 19 a deduction by way of normal depreciation has been allowed to the extent of Rs. 22,000 and odd. Therefore it does not appear on the evidence as it stands, that the method adopted by the appellant in making its calculations has introduced any serious infirmity or has given a distorted or inflated claim about the provision for rehabilitationtribunal took the view that the evidence given by the appellants witnesses in the present proceedings was satisfactory and we do not think that any material has been brought out in cross-examination which would justify the respondents contention that the tribunal had not properly appreciated the said evidence. In the result we hold that the respondents have failed to show that any of the conclusions reached by the tribunal in making its calculations under its alternative finding are wrong.