Case: Bharat Containers Private Limited Vs. Engineering Worker'S Union

( 2 ) THE dispute was referred for adjudication to the Industrial Tribunal, Bombay between the petitioner M/s. Bharat Containers Pvt. Ltd. and its workmen. By a letter dated 2. 12. 1986 the Union served the Charter of demands on the management. Having failed to reach any settlement by the conciliation, the matter was ultimately referred to the Tribunal under the provisions of the Industrial Disputes Act. After hearing the parties and recording the necessary evidence the learned Member of the Industrial Tribunal by the impugned award was pleased to grant demand No. 1 (scales of wages), demand No. 2 (adjustment and service increment) and demand No. 3 (dearness allowance) with retrospective effect from 1. 12. 1986. The demand No. 5 (leave benefits of special pay), demand No. 7 (leave travel allowance), demand No. 9 (uniform and washing allowance), demand No. 10, (Milk and milk allowance) and demand No. 11 (medical allowance) are granted under the said award with effect from 1. 6. 1993. The demand No. 1a (classification) being not pressed was not granted. Demand No. 4 (personal pay), demand No. 6 (discrimination in payment of special pay,) demand No. 8 (House rent allowance), demand No. 12 (education allowance) demand No. 13 (gratuity) and demand No. 14 (leave provision) were rejected by the3 ) WE have heard Shri M. V. Bhatt, learned counsel appearing for the petitioner company and Shri P. M. Patel learned counsel for thewith the assistance of the learned counsel for both sides, we have gone through the impugned award and also the relevant material specifically brought to our notice by the respective counsel.

Court's reasoning:
( 6 ) AFTER hearing the counsel and after having gone through theaward and also after scrutinising the material on record, we are of the opinion that the petitioner has not made out any case for interference on any aspect of the matter in thisdo not find anything wrong in this finding of the Tribunal, on the basis of the material and documents onourselves have gone through the balance sheet relied upon by both parties and from the statement showing the financial position of the company filed by the Union at Exh.it is clear that the company has been making consistently gross profits during the years 1978 till 1992. It is difficult to appreciate and accept the submission of Mr. Bhatt that the gross profits have to be calculated after deducting the huge amounts of depreciation. In fact in the aforesaid case of Management of Shri Chalthan Vibhag Khan Udyog Sahakari Mandali Ltd. and the earlier decision of the Apex Court, it is clearly held that the depreciation has to be included while calculating gross profits. Undoubtedly in paragraph 23 in Management of Shri Chalthan Vibhag Khan Udyog Mandali Ltd. case the Apex Court has observed that the decisions of the Apex Court referred to therein were given in particular facts of the case and may not be understood as laying down that under no circumstances deduction for depreciation, reserves etc. would be made. The Apex Court has further observed in the said paragraph that it cannot be taken as a hard and fast rule that provision for depreciation, provision for development, rebate, tax liabilities should never be allowed. However, it is also relevant to notice that in paragraph 24 of the very judgment the Apex Court has observed that an employer claiming depreciation allowance is only entitled to the actual or probable depreciation of the machinery, tools, etc. for the period due to wear and tear. The depreciation cannot be computed on any natural basis or on the profit and loss account furnished by thesuch we are of the clear opinion that the learned Member of the Industrial Tribunal was absolutely justified in calculating the gross profits without deducting the huge amount of alleged depreciation shown by the company. The learned member of the Tribunal in our opinion, has correctly relied upon the fact that the material on record showed that the initial capital of the company in the year 1959 was Rs. 1,75,000/which capital has been increased to Rs. 25,95,000/in the year 1984. The learned Member of the Tribunal has also referred to the increase in the subscribed capital and gross assets of the company. It is observed by the learned Member of the Tribunal that the gross block for the yearthe reserves and surplus is Rs. 22,17,093/and the turn over of the company is Rs.. He has also observed that the assets during the year92 is to the extent of Rs.. Although there is some justification in the criticism of Shri Bhatt regarding learned Judges observation regarding benefits drawn by the directors is concerned, in our opinion in the facts and circumstances of the case and on the basis of the material on record that will not make any difference at all to the ultimate conclusions reached by the learned Member of the Tribunal. The learned Member in fact came to the finding that he cannot avoid to mention that the company is inclined to magnify the alleged weak financial position of the company. The learned Member also referred to the vital admission given by the Managing Director that the company has invested large amount of Rs. 80,52,000/for the purchase of new machineries, which in the opinion of the learned Member is indicative of the prosperity of the company. Shri Bhatt contended that as a matter of fact this should have been held as liability in as much as the machinery was purchased by obtaining loans from the banks, for which company was liable to pay substantial amount by way of interest. We are not impressed by this submission at all. Obviously the company would be investing lacs of rupees in new machineries only with the resultant increase in the production and increase in the profits. On the basis of the material on record the learned Member of the Tribunal was more than justified in coming to the conclusion that the company seems to be a prosperous one and has very bright future. As stated earlier no evidence at all having been adduced by the company about the actual extent of depreciation or wear and tear of the machinery concerned, the learned Member was absolutely right in totally ignoring the huge amount of depreciation shown in the balance sheet of the company. The learned Member also referred to rosy picture drawn about the companys future by the statement of the directors in the report. May be that Mr. Bhatt is right in submitting that, that should hardly be a material evidence to judge the financial position of the company. However, in our opinion in the facts and circumstances of the case, the said observation of the learned Member of the Tribunal does not make any difference at all, to the ultimate finding recorded by the learned Member of the Tribunal regarding the financial capacity of the12 ) COMING to the different demands granted by the learned Member of the Tribunal, on the basis of the material on record, learned Member was justified in granting demand No. 1 i.e., scales of wages and making them operative from the date of demand i. e. , 1. 12. 1986. So is the case of grant of adjustment and service increment at the rate of one increment for every 5 years of service with effect from 1. 12. 1986, subject to the maximum of three increments. So far as the dearness allowance is concerned, it requires to be noticed that the demand of the Union was at the rate of Rs. 4 per 10 points above index No. 650 in place of the existing scheme of Rs. 2. 60 for 10 points. The rate of neutralisation provided after 650 points is also at a low rate of Rs. 2. 60 for every 10 points rise was fixed in the award dated 5. 8. 1970 and since then there had been no upward revision in that scheme. The learned Member has observed that the company has expanded its business activities and paying capacity of the company has increasedquantum of production has also increased and under the circumstance the refusal by the company to pay dearness allowance for 649 points mounts to injustice. The workers are required to pay full price rise to purchase essential commodities and they cannot be denied neutralisation by way of dearness allowance for the remaining index numbers. After taking into consideration various rulings of the Apex Court and the material on record the learned Member of the Tribunal has ultimately granted dearness allowance at the rate of Rs. 3. 25 per 10 points above index No. 650. We do not find anything improper or incorrect in the aforesaid grant of dearness allowance. All the other demands in our opinion are minor from the point of view of the additional financial burden and have been rightly dealt with by the learned Member of the Tribunal. We must here repeat that the main plank of the argument of Shri Bhatt on behalf of the company was regarding alleged financial incapacity of the company and so far as the individual demands are concerned, there was hardly anything which he could bring to our notice requiring interference in writ jurisdiction of this Court.