Case: M/S. Tulsidas Khimji Vs. Their Workmen

SC 886) in which also the judgment of the Court was delivered by Wanchoo J. The appeal before this Court was by special leave from an award of the Industrial Tribunal and the case of the appellants -the employees was that they were entitled to a bonus irrespective of profit on a scale which they set out. The Tribunal negatived the case of the employees to bonus on all the three grounds upon which bonus was payable, viz., profits bonus, as an implied condition of service and thirdly as customary bonus. Dealing with the question of the Subordinate staff, the learned Judge said:"This payment of one months basic wage as bonus at puja appears to have continued uninterrupted from the time it started in 1942 or thereabout upto the time the dispute arose in 1954. The payment was invariably of one months basic wage and it appears that it was paid even in a year of loss."31. On this ground the appeal was allowed in regard to this item. Lastly, Toklai Experimental Station v. Its Workmen, Civil Appeals Nos. 459 and 460 of 1960, D/- 24-11-1961: (AIR 1962 SC 1340 ), the judgment was pronounced by Gajendragadkar J. (who incidentally was a member of the Bench which decided each of the three earlier cases). Dealing with Puja bonus the learned Judge observed:"Customary puja bonus undoubtedly prevails in many industries in Bengal but there are certain tests which have to be applied in determining the validity of the claim. The amount by way of puja bonus, it must be shown, has been consistently paid by the employer to his employees from year to year at [he same rate, that it has been paid even in years of loss and that it has no relation to the profit made by the employer during the relevant year. The course of conduct spreading over a reasonably long period between the employer and the employees in the matter of payment of puja bonus is of considerable importance in dealing with the claim of customary puja bonus (vice 1960-1 SCR 107) :(AIR 1959 SC 1151 )."32. The question now for consideration is whether on those authorities, reasonably construed it is or it is not a necessary condition for the establishment of a claim to customary bonus that it has been paid in a year of loss. The extracts that I have made from the judgment of this Court in the Graham Trading Co.s case, 1960-1 SCR 107 : (AIR 1959 SC 1151 ) where it is referred to as the third condition and the specific reference to loss in the three other decisions, particularly bearing in mind the fact that the same members of the Court had taken part in these several decisions, and Gajendragadkar J. took part in all the four, I feel unable to hold that the learned Judge did not intend this to be an essential condition. In the Graham case, 1960-1 SCR 107 : (AIR 1959 SC 1151 ) the reason for the insistence of this condition is stated, viz., that it is only a payment during a year when there is loss that would negative the payment being a bounty. In these circumstances I do not consider it possible to construe these judgments as laying down that payment during a year of loss, was merely a relevant circumstance and not a necessary condition. If, as I have pointed out earlier, what the Court is now called on to do is only to construe these decisions, and not consider the question afresh I feel compelled to hold that in these several decisions this Court did lay down that this was a sine qua non for making good the claim.33. It was suggested during the course of the argument that there was no difference between a loss of one rupee for the year and a profit of a similar sum and that if the decisions were literally understood it would lead to an unreasonable result, for whereas the claim would be excluded in the even of a loss-even though the same be nominal, event the existence of a nominal profit would enable the claim to be established. I agree that we are not construing a statute and that in the context in which the condition has been laid down, viz., that it should negative the payment being by way of bounty, the expression loss should be understood in the sense of an inadequacy of profit which would not justify the payment of that bonus. But where the profits are adequate to enable the payment of the bonus, it appears to me that these decisions clearly lay down that the right to customary bonus is not established; for, as explained in the Graham Trading Co. case, 1960-1 SCR 107 : (AIR 1959 SC 1151 ), the payment being by way of bounty would not then be excluded. In this connection it has to be borne in mind that when the right to customary bonus is held to be established, the workmen are entitled to it in future years even in an year of loss and a fortiori so in a year when the profits are inadequate to justify that payment. In these circumstances it stands to reason that there must be an earlier year in which payment has been made in such circumstances as to serve as a precedent for the future i.e., to establish the custom for payment in later years. As in the present case it is admitted that there has been an adequacy of profits to just the payment of one months bonus during Diwali during; all the earlier years the declaration granted by the Tribunal is without justification and the finding in that regard has to be set aside.34. The result therefore is that I would allow the appeal in part, reduce the profit bonus to basic wages for two months including the one months basic wage as bonus already paid, and delete the declaration as to customary bonusORDERSinha, J.35

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]In this connection, it has been found by the Tribunal that the claim of the partners that they devoted their whole time to the business of this firm only, is not correct, and that the individual partners, on their own account, and certainly as partners of another firm, have been carrying on their other business activities. It has also to be borne in mind that the partners have not been able to adduce any reliable data to determine the amount of time and energy which they devote to the business of the firm in question. It is equally true that the sum of Rs. 20,000/- fixed by the Tribunal, under this head, amounting roughly to 10% of the gross profits is more or loss conjectural. We know that the sum of Rs. 4,60,000/- represents roughly the wage bill for the year in question. Comparing the sum allowed by way of remuneration to the partners to this figure, it appears to us that the amount fixed by the Tribunal errs on the side of inadequacy. But this Court is not in a position to come to any definite conclusion of its own on the record as it stands, assuming that it is open to this Court to record a finding, which is more or less one of fact, in disagreement with the finding of the Tribunal. It must be added that this Court does not function as a regular Court of Appeal from the Tribunal. Its function is merely to see that the law is being properly administered, in accordance with well-settled rules of natural justice. Hence, we would not embark upon a fruitless task of determining a figure which will not have any substratum of solid facts and figures to support ourpage 129 of volume I of the paper book, there is a statement of the profits of the firm between the years 1943-44 and 1957-58, and at page 157 of the reasons of the Tribunal in volume II appears a tabular statement of the bonus paid for the corresponding period of years, which has consistently been equivalent to three months basic wages, which is the bonus allowed in respect of the year in question also. This was so in spite of the fact that the profits have fluctuated considerably from year to year. Even after payment of the bonus as directed by the Tribunal, and making allowance for the higher amount of income-tax as determined by us, the appellants are left with a substantial amount by way of their share of the profits. It would thus appear that the Tribunal has not been too generous to the workmen when it allowed a consolidated bonus of three months basic wages minus the amount already paid toour opinion, therefore, the Tribunal was fully justified in finding that the traditional or customary bonus had been established in this case, notwithstanding that it had not been show, as it could not have been shown, that it was paid in a year of loss on behalf of the respondents an attempt was made to shown that such a bonus could be granted as an implied term of contract of service. But as such a case has not been made in the statement of the case in this Court, we did not allow that case to be made out at the time of the arguments. We must make it clear that this Court has to be very strict in enforcing the rules of pleading, as laid down in the rules of this Court bearing on the question of statement of case of the parties. These rules have been laid down with a view to help the Court in narrowing down the controversies between the parties and also for the purpose of giving notice to the other side that a particular question will be raised, and. that that party should be ready to meet that particular point. This Court would not ordinarily permit any laxity in the matter of pleadings in this Court, and litigants and their legal advisers must take not of what we have said so often in the course of arguments in a number of cases coming before us recently.