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

2. The appellant is a private limited company incorporated in 1935 and it has its head office at Calcutta. Its business is to manufacture and sell oxygen and acetylene. It is a subsidiary" of the British Oxygen Co. Ltd. It sells its products to the hospitals and nursing homes and in large quantities to industrial concerns for welding, cutting and blasting operations. It voluntarily paid bonus equal to two months basic wages for both the years in dispute; but the respondents were not satisfied with the said payment and they made a claim for 1/3 of their total earnings for the two respective years. That is how the dispute arose between the parties3. It appears in evidence that all the shares of the appellant (excepting two or three held by nominee share-holders) are held by the British Oxygen Co. Ltd. Evidence also shows that the appellant has been prospering and has been expanding at a rapid rate. It has capitalised its reserves in 1940, 1941, 1942, 1945, 1946, 1947and1949 with the result that the major portion of its capital is made up of bonus shares. It has made good profits for the year ending 30-9-1953 as well as for the year ending 30-9-1954. There is also no doubt that a large gap exists between the actual wages paid by it to its workmen and the living wage. It is on these allegations that the respondents made a claim for bonus of 1/3 of their total earnings4. The appellant pleaded that it was paying good wages to the respondents and that under the formula the respondents were not entitled to claim any additional bonus for the relevant years. In fact, according to the appellant, if the formula was properly worked the bonus already voluntarily paid by it to the respondents could not have been claimed by them5. The tribunal has, however, rejected the appellants case and has directed it to pay to the respondents bonus at the rate of 1/4 of the annual basic wages for l952-53 and 1/3 of the said wages for 1953-54 (less the bonus already paid for these years). It has also directed that in calculating the amount of bonus overtime and dearnness and other allowances should be excluded. This award has been made subject to the two conditions specified by it. It is the correctness of this award that is challenged by the appellant before us.

Reasoning:
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.