Case: Hamilton and Company Private, Limited Vs. Its Workmen

This is an appeal by special leave against the order of the fourth industrial tribunal, West Bengal. There was a dispute between the appellant and its workmen on the question of bonus for the year 1959. The appellant had paid one months wages as bonus for the year 1959, but the respondents demanded two months further wages as bonus on the ground that large profits had been made by the appellant in the year in question. Consequently a reference was made by the Government of West Bengal the tribunal for decision of the question whether any additional bonus, if so, what was payable to the respondents. The tribunal found that there was sufficient available surplus to justify payment of additional bonus amounting to two months basic wages and ordered accordingly. The present appeal is from this decision of the tribunal.

Court's reasoning:
In that case it was apparently held that amounts earned as interest on investments must be treated as unrelated to the employees efforts and as such employees could not claim any shares in such income; and therefore income by was of interest on investments made from reserves must be deducted from gross profits for the purpose of ascertaining available surplus. If this means that even income from investments which have arisen out of the profits earned in the past and are part of the normal manner in which business is carried on, has to be excluded as extraneous income, we must hold it to be incorrect in view of the decision in Tata Oil Mills case [1959II L.L.J. 250] (vide supra)It is not disputed on behalf of the appellant that if the income from that house in New Delhi is taken into account for the purpose of bonus, the order of the tribunal awarding further two months basic wages as bonus cannot be assailed.