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

2. The appellants are a partnership ; firm, registered underthe Indian Partnership Act, 1932, and have their office at 46, Veer Nariman Road, Fort, Bombay 1. The firm carries on business in the name of Messrs. Tulsidas Khimji, and for the relevant year ended October 31, 1958, the partners were (1) Shri Karsondas Tulsidas (2) Shri Ranchoddas Gokuldas (3) Shri Narandas Tulsidas (4) Shri Moolsingh Karsondas (5) Shri Shantu Karsondas and (6) Shri Narendra Ranchhodas. They are closely related to one another. The first two partners aforesaid have been associated with the firm for about 40 years, the third for about 35 years, the fourth for about 15 years, the fifth for about 8 years and the 6th for about 5-6 years. At all material times, the six partners had been working for and in the interest of the firm, which carried on different kinds of business, namely, (1) Clearing and forwarding agents, (2) Godown Keepers, (3) Insurance Agents and (4) Cotton Supervisors and Controllers. For carrying on these different kinds of business, they maintained four different and distinct departments. The respondents are workmen employed under the firm. The question referred to the Tribunal was "quantum of bonus payable to workmen for the year ended October 31, 1958". A number of issues were raised before the Tribunal, of which it is only necessary to notice the 4th and the 5th issues, which are as underWhether the claim under reference should be restricted to a claim for profit-sharing bonus or customary bonus or on basis of implied terms of contract?5. Whether it is open to the workmen to claim bonus on the basis of surplus profits, and at the same time claim bonus on the ground of custom and practice or implied terms and conditions of service ?, or whether the workmen should elect the basis on which they claimThe union of the workmen had claimed profit-sharing bonus at the rate of 6 months wages (inclusive of Dearness Allowance) and traditional or customary bonus at a rate, which is not clear but which may be said to be either three months or one months wages, plus dearness allowance, on the occasion of the Dewali festival. The difficulty in clearly stating the case for the workmen is that they were not clear in their own minds as to whether they were claiming the customary or traditional bonus as one of the implied terms of their employment or for the special festival occasion of Dewali. It was not even clear whether the claim for 6 months wages, inclusive of dearness allowance, was the total claim for bonus or was in addition to the traditional or customary bonus, either implied or as festival bonus on the occasion of Dewali. That accounts for the form of the issues set forth above. The appellants conceded only one months basic wages as bonus which had already been paid, and contested the claim for traditional or customary bonus either as an implied term of contract of service or as a festival bonus. As there was some confusion about the claim of the respondents, the Tribunal after referring to a number of documents and oral statements, came to the conclusion that the respondents had claimed by way of maximum bonus, 6 months wages on a profit-sharing basis, and that the minimum was the claim for customary or traditional bonus of three months basic wages and one months dearness allowance on Issue No. 4 the Tribunal decided that those were alternative claims, and that it was not necessary for the workmen to elect any one of the alternatives. The Tribunal pointed out that till the decision of this Court in the case of Graham Trading Co. (India) Ltd. v. Its Workmen, 1960-1 SCR 107  : (AIR 1959 SC 1151  ) a clear distinction was not made in respect of claim for bonus as an-implied term or condition of service and as a customary or traditional bonus, and the respective tests to determine them. The Tribunal, therefore, held that the workmen were entitled to claim bonus on each of the three alternative bases, namely, (1) Profit-sharing bonus, (2) bonus as an implied term of service and (3) customary or traditional bonus on the occasion of Dewali. The Tribunal pointed out that the appellants had already paid to its workmen bonus equivalent to one months basic wages, which amounted to Rs. 20,780/-. In Order to determine the question of the first kind of bonus, namely, profit-sharing bonus, the Tribunal had to determine the available surplus. In order to do that, it had to grant certain seductions from the gross profits. The appellants claimed deductions under a number of heads, but we are concerned only with two out of them, namely; (1) whether the appellants claim for deduction of 51 per cent out of the gross profits on account of income-tax was justified, and (2) what should be the amount of remuneration for the six partners, in respect of which also deduction may be granted. The Tribunal decided that the amount of tax payable by the firm, as such, should be deducted and not as claimed by the appellant, on that basis, the Tribunal found that the amount deductible on account of income-tax would come to a little over 5 per cent of the total amount of the gross profits. As regards the remunerations of the partners, the Tribunal fixed a lump sum of twenty thousand rupees, on a basis which is not easily discernible from the award, and may be said to be more or less conjectural. After making provision for the prior charges on the amount of the residuary surplus, the Tribunal came to the conclusion that a bonus equivalent to 1/4th of total basic wages earned by the workmen during the year under reference, i.e. the year ended October 31, 1958, would be justified. It then turned to the question of the alternative claim of the workmen to three months basic wages, plus one months dearness allowance, either as an implied term of conditions of service or as customary or traditional bonus, on a consideration of the decisions of this Court and other decisions of High Courts and Tribunals, it came to the conclusion that though the respondents may not have succeeded in establishing their claim on the basis of implied terms of contract they had succeeded in proving their claim for traditional or customary bonus at a uniform rate of one months basic wages plus dearness allowance. In the result, the Tribunal awarded to the workmen bonus equivalent to 1/4th of the total basic wages, less the amount of bonus equivalent to one months wages already paid for the year under reference, on the same terms and conditions as had been prescribed in the award in respect of the previous year ended October 31, 1957.4. Against this award, the firm has come up in appeal.

Reasoning:
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.