Summarize the following court judgment. Appeal No. 2128 of 1969. Appeal by special leave from the Award dated July 19	 1969 of the Ninth Industrial Tribunal	 West Bengal	 Calcutta in case No. VIII 396 of 1968. C. K. Daphtarv. Santosh Chatterjee and D. N. Mukherjee	 for the appellant. section C. Gupta	 Manju Gupta and section C. Agarwala	 for the respondents. The Judgment of the Court was delivered by Bhargava	 J. The appellant	 Messrs Alloy Steel Project	 is an undertaking owned	 controlled and managed by a Government Company	 viz.	 Messrs Hindustan Steel Ltd. Alloy Steel Project was started in the year 1961 and it went into production in the year 1964 65. No profit was earned at least right up to the year '1967 68. The workmen	 however	 claimed bonus at the minimum rate prescribed under the Payment of Bonus Act No. 21 of 1965 (hereinafter referred to as "the Act") in respect of the year 1965 631 1966 on ' the plea that this Alloy Steel Project was a / part of the Hindustan Steel Ltd. and could not be treated as a new establishment for purposes of section 16 of the Act. Hindustan Steel Ltd. was itself an establishment which had been in existence for a long period and had been even earning profits	 so that exemption could not be granted to this Company in respect of payment of bonus under section 16 of the Act. This claim of the workmen was resisted	 by the Company on the plea that Alloy Steel Project was a separate establishment in respect of which separate balance sheets and profit and loss accounts were maintained	 so that no bonus was payable until either this Project itself earned profits	 or from the sixth accounting year following the year 1964 65 when this Project went into production. The dispute between the work men and the Company. could not be resolved amicably and	 consequently	 a reference was made under the which came up before the Ninth Industrial Tribunal	 West Bengal. The Tribunal held that Alloy Steel Project could not be treated as a separate establishment because	 under the Act	 a Company is itself an establishment	 so that all units of a Company like Hindustan Steel Ltd. will constitute one establishment. Since this Project had not been earning any profits the Tribunal directed payment of bonus at the minimum rate of 4 per cent of wages prescribed by the Act. Aggrieved by this award of the Tribunal	 the Company has come up in this appeal to this Court by special leave	 though the name of the appellant is shown as Alloy Steel Project	 because it was under this name that the reference was dealt with by the Tribunal. The main basis of the decision of the Tribunal is that 'the word establishment ' has been used in this Act to indicate a "Company" as called in common parlance. " It was on this view that the Tribunal further Proceeded to consider whether this Alloy Steel Project could be held to be an establishment separate from Hindustan Steel Ltd.	 or it had to be treated as a part of the parent establishment	 viz.	 Hindustan Steel Ltd. In this approach	 it is clear that the Tribunal committed an obvious error	 as it ignored the indications which are manifest from the language used in the Act. In section 2	 sub section (15) and (16)	 establishments have been divided into two classes and their meaning has been defined. In clause (16)	 "establishment in public sector ' is defined as meaning an establishment owned	 controlled or managed by (a) a Government company as defined in section 617 of the ; (b) a corporation in which not less than forty per cent of its capital is held (whether singly or taken together) by 632 (i) the Government; or (ii) the Reserve Bank of India; or (iii) a corporation owned by the Government or ' the Reserve Bank of India. In clause (15) of section 2	 "establishment in private sector" is defined to mean any establishment other than an establishment in public sector. Thus	 between these two clauses	 all establishments are covered. If an establishment is in public sector	 it is covered by the definition in clause (16). If the establishment is not in public sector	 it will be covered by the definition of "establishment in private sector" in clause (15). The significant words are those contained in clause (16) which show that an establishment in a public sector hag to be owned	 controlled or managed by a Government company	 or by a corporation of the nature described in that clause. Obviously	 therefore	 an establishment in a private sector would be one which is owned	 controlled or managed by a person or body other than a Government company or a corpora tion of the nature described in clause (16). In this view	 an establishment cannot be identified with a company. It would be absurd to say that a company is owned	 controlled or managed by a Government company or a corporation. Obviously	 the word "establishment" is intended to indicate something different from a company as defined in the . This is further clarify by the provisions of sub section (3) of section I which lays down the applicability of the Act. The Act has been made applicable to every factory and every other establishment in which twenty or more persons are employed on any day during an accounting year. Supposing a company has a factory in one premises and has another workshop entirely distinct and separate from that factory	 in which the number of persons employed is less than 20. The Act itself will apply to the factory	 but will not apply to the other establishment in which the number of employees is less than 20. This applicability of the Act will be independent of the other provisions of the Act. Learned counsel for the respondent workmen relied on section 3 of the Act to urge that even the establishment employing less than 20 persons will be a part of the parent establishment consisting of the factory. Section 3 is as follows : "3. Where an establishment consists of different departments or undertakings or has branches	 whether situated in the same place or in different places	 all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act 633. Provided that where for any accounting year a separate balance sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch	 then	 such department or undertaking or branch shall be treated as a separate establishment for the purpose of computation of bonus under this Act for that year	 unless such department or undertaking or branch was	 immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus. " It is to be noted that the principal part of section 3 lays down that different departments or undertakings or branches of an establishment are to be treated as part of the same establishment only for the purpose of computation of bonus under the Act. They cannot be treated as part of one establishment for purposes of subsection (3) of section 1 of the Act. In fact	 section 3 cannot be	 resorted to at all when the Act itself is inapplicable in view of the provision contained in section 1	 sub section It is	 thus	 quite clear that the Tribunal went entirely wrong in holding that simply because Alloy Steel Project is owned	 controlled and managed by Hindustan Steel Ltd.	 it has to be treated as a part of Hindustan Steel Ltd. which is itself an establishment. Hindustan Steel Ltd. cannot be described as an establishment. The facts appearing on the record show that Hindustan Steel Ltd. has a number of. establishments. These include Alloy Steel Project besides the Head Office	 Rourkela Steel Plant	 Bhilai Steel Plant	 Durgapur Steel Plant	 Coal Washeries Project and Bokaro Steel Project. The Company	 Hindustan Steel Ltd.	 cannot be equated with any one of these units. They are all separate undertakings	 departments or branches owned	 controlled and managed by one single Company and	 consequently	. the point raised has to be decided on the basis whether	 under the proviso to section 3 the Alloy Steel Project is to be treated as a separate establishment	 or is to be treated as part of the main establishment owned by Hindustan Steel Ltd. Learned counsel for the respondent workmen	 however	 advanced a new argument which was not put forward before the Tribunal. His submission was that	 if an establishment of a Company consists of a number of departments	 undertakings or branches	 the principal part of section 3 will apply and all such departments	 undertakings or branches must be treated as parts of one single establishment for purposes of computation of bonus under the Act	 but the proviso to section 3 will not apply in such a case. According to him	 the proviso to section 3 will apply to establishments consisting of different departments	 undertakings or branches which are owned	 controlled or managed by persons other 634 than companies. This argument was based on the reasoning that	 in order to calculate available surplus for distribution of bonus in the case of a company the Act lays down in section	 6 (d) read with the Third Schedule that the deductions to be made from net _profits will also include dividends payable on 	 preference share 	capital	 and 8.5 per cent of its paid up equity share	 capital as at the commencement of the accounting year. This provision cannot be given effect to in respect of separate units of a Company	 .because the paid up capital or the preference share capital is not 	allocated between different units. In the case of the present Company	 viz.	 Hindustan Steel Ltd.	 the entire paid up capital is shown in the accounts of the Head Office. The money needed for working of the various units	 including the Alloy Steel Project	 is shown as remittance received from the Head Office and not as. paid up capital of the Alloy Steel Project etc. The result is that	 if Alloy :Steel Project or other units of the Hindustan Steel Ltd. are treated as separate establishments and available surplus is calculated separately for each unit	 there will be no deduction @ 8.5 per cent 	of the paid up equity share capital as envisaged by section	 6(d) 	and the Third Schedule of the Act. We do not think that there is any force in this argument. First	 it would be a strange method of construction of language to hold that the establishment referred to in the main part of section 3 will include all different departments	 undertakings and "branches of a company	 while it will not do so in the proviso to 'the same section. Such different meanings in the same section in respect of the same words or expression cannot be accepted. Secondly	 it seems to us that no difficulty of the nature pointed out by learned counsel can arise in calculating available surplus. 'Wherever the Act lays down that certain deductions are to be made	 it is obvious that those deductions will only be effective if	 in fact	 circumstances do exist justifying such deductions. In the 'Third Schedule itself	 the first ' deduction envisaged is dividend payable on preference share capital. A number of companies do not have preference share capital. In such cases	 clearly	 no 	occasion would arise for making such a deduction. Very similar is the position with regard to certain other deductions which are permissible under the Second Schedule which principally lays down the method of calculation of available surplus. There is	 therefore	 no reason for interpreting the proviso to section 3 in the manner urged by learned counsel simply because	 in the case of separate departments	 undertakings or branches of the establishment of a company	 it may not be possible to make a deduction @ 8.5 per cent of the paid up equity share capital. In the present case	 there is very clear evidence that	 though the Company	 Hindustan Steel Ltd.	 has a number of undertakings	 635 Separate accounts are kept for each separate undertaking. The annual reports for three years were produced before the Tribunal. They clearly indicate that separate balance sheet was prepared for each unit and separate profit and loss account was worked out for each unit	 except that	 for the Head Office	 though a separate balance sheet was prepared	 the profit and loss was worked out on the basis of the consolidated accounts. The Tribunal	 in support of its view that Alloy Steel Project is a part of the establishment constituted by the Company	 Hindustan Steel Ltd.	 relied on the circumstance that a consolidated balance sheet is prepared for the Company in respect of all its units and after such consolidation	 profit and loss is also worked out for all the establishments together so as to find out the actual profit and loss earned or incurred by the Company itself. From this	 the tribunal sought to infer that there were no separate accounts in respect of each unit as are required to be maintained before they can be treated as separate establishments under the proviso to section 3. The Tribunal has obviously gone wrong in ignoring the fact that separate balance sheets and profit and loss accounts are in fact maintained for each separate unit and the consolidated accounts are prepared only for the purpose of complying with the requirements of the companies Act. The does lay down the requirement that a consolidated balance sheet and profit and loss account for all the units of the Company must be prepared and	 for	 that purpose	 quarterly statements of accounts have to be sent by each unit to the Head Office. There is	 however	 no provision even in the containing a prohibition to maintenance of separate balance sheets and separate profit and loss statements for each unit for purposes of the Act. That accounts are separately maintained for each unit is not only established from the various annual reports filed before the Tribunal and the evidence of	 the Company 's witness Umapada Chakraborty	 but is also admitted by Suprakash Kanjilal	 the only witness examined on behalf of the workmen. The latter also admitted that separate bonus calculation is made in respect of each unit and bonus was declared separately in each unit. No bonus was	 however	 declared in respect of the Alloy Steel Project. That declaration was not made because of the claim that Alloy Steel Project was exempt from payment of bonus under section 16 of the Act. Section 16 runs as follows: "16. (1) Where an establishment is newly set up	 whether before or after the commencement of this Act	 	the employees of such establishment shall be entitled to be paid bonus under this Act only (a) from the accounting year in which the employer derives profit from such establishment; or 918Sup CI/71 636 (b) from the sixth accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services	 as the case may be	 from such establishment	 whichever is earlier Provided that in the case of any such establishment the employees thereof shall not	 save as otherwise provided in section 33	 be entitled to be paid bonus under this Act in respect of any accounting year prior to the accounting year commencing on any day in the year 1964. Explanation I. For the purpose of this section	 an establishment shall not be deemed to be newly set up merely by reason of a change in its location	 management	 name or ownership. Explanation II. For the purpose of clause (a)	 an employer shall not be deemed to have derived profit in any accounting year unless (a) he has made provision for that year 's depreciation to which he is entitled under the Income tax Act or	 as the case may be	 under the agricultural income tax law; and (b) the arrears of such depreciation and losses incurred by him in respect of the establishment for the previous accounting years have been fully set off against his profits. Explanation III. For the purpose of clause (b)	 sale of the goods produced or manufactured during the course of the trial run of any factory or of the prospecting stage of any mine or an oil field shall not be taken into consideration and where any question arises with regard to such production or manufacture	 the decision of the appropriate Government	 made after giving the parties a reasonable opportunity of representing the case	 shall be final and shall not be called in question by any court or other authority. (2) The provisions of sub section (1) shall	 so far as may be	 apply to new departments or undertakings or branches set up by existing establishments 6 3 7 Provided that if an employer in relation to an existing establishment consisting of different departments or undertakings or branches (whether or not in the same industry) set up	 at different periods has	 before the 29th May	 1965	 been paying bonus_to the employees of all such departments or undertakings or branches irrespective of the date on which such departments or undertakings or branches were set up	 on the basis of the consolidated profits computed in respect of all such departments or undertakings or branches	 then	 such employer shall be liable to pay bonus in accordance with the provisions of this Act to the employees of all such departments or undertakings or branches (whether set up before or after that date) on the basis of consolidated profits computed as aforesaid. " Sub section (1) of section 16 grants exemption from payment of bonus to establishments newly set up for a period of six years	 following the accounting year in which the goods produced or manufactured are sold for the first time and	 in the alternative	 up	 to the year when the new establishment results in profit	 whichever is earlier. If the Alloy Steel Project is treated as an establishment newly set up for purposes of section 16(1)	 the exemption claimed would be fully justified. Section 16(2) of the Act makes it clear that the provisions of sub section (1) are to apply even to new departments	 undertakings or branches set up by existing establishments. Consequently	 even if Alloy Steel Project is treated as a new undertaking set up by the existing establishments of Hindustan Steel Ltd.	 the exemption under section 16(1) would be avail able to it. The proviso to sub section (2) of section 16 also does not stand in the way of this claim	 because there is no evidence at all that in any year	 after Alloy Steel Project was set up bonus was paid to the employees of all the units on the basis of consolidated profits of all such units. The only exception has been in the case	 of workmen of the Head Office where no separate profit and loss was worked out and the bonus was paid on the basis of the consolidated Profits of all the units belonging to Hindustan Steel Ltd. That	 of course	 was fully justified	 because the Head Office was working for all the units	 though as a separate unit. It was in the accounts of the Head Office that the entire paid up capital was credited and advances were made by the Head Office to the various units out of this capital or out of loans taken by the Head Office. In the case of the Head Office	 therefore	 the calculation of bonus on the basis of consolidated accounts was Justified; but that does not affect the principle to be applied to the separate units for which separate accounts	 separate balance sheets and separate profit and loss statements are maintained. The proviso to sub 638 section (2) of section 16 only comes in the way it bonus is paid in any year to the employees of all the units on the basis of consolidated accounts. That has never been done in the case of the Hindustan Steel Ltd. Consequently	 the Alloy Steel Project should have been treated as a separate establishment newly set up in the year 1961. It went into production in 1964 65 and did not	 earn any profits at all till 1967 68. Therefore	 no bonus was payable	 to	 the workmen of this undertaking for the year 1965 66 in view 	of the provisions of section 16(1) of the Act. The appeal is allowed	 the order of the Tribunal is set aside	 and the reference of the dispute is answered accordingly. In the circumstances of this case	 we direct parties to bear their own 	costs of the appeal. G.C. Appeal allowed.

The Alloy Steel Project was an undertaking controlled and managed by a government company	 namely	 the Hindustan Steel Ltd. Alloy Steel was started in 1961 and went into production in 1964 65. No profit was earned up to 1967 68. The workmen claimed bonus at the minimum rate prescribed under the Payment of Bonus Act	 21 of 1965 in respect of the year 1965 66. On behalf of the Alloy Steel Project exemption from payment of bonus was claimed under section 16(1) of the Act on the ground that it was a new establishment and had not made profits. The Industrial Tribunal to which reference was made held that Alloy Steel could not be treated as a separate establishment because under the Act a company is itself an establishment so that all units of a company like Hindustan Steel Ltd. will constitute one establishment. However	 since Alloy Steel had not been earning profits the Tribunal directed payment of bonus at the minimum rate of 4% of wages as prescribed by the Act. Aggrieved by this Award of the Tribunal the company appealed. HELD : The Tribunal erred in holding the word 'establishment ' to be synonymous with 'company '. In doing so it ignored the indications which are manifest from the language of the Act. The significant words are those contained in section 2(16) which show that an establishment in a public sector has to be owned	 controlled or managed by a Government company or by a corporation of the nature described in the clause. Obviously therefore an 'establishment in private sector ' defined in section 2(15) to mean an establishment not in the public sector would be one which is owned	 controlled or managed by a person or body other than a Government company or a corporation of the nature described in section 2(16). In this view an establishment cannot be identified with a company. It would be absurd to say that a company is owned	 controlled or managed by a Government company or corporation Obviously	 the word 'establishment ' is intended to indicate something different from a company as defined in the Companies Act. [631 F 632 D] (ii) Alloy Steel was a separate establishment by virtue of the proviso to section 3 of the Act because for each of the undertakings of Hindustan Steel Ltd. including Alloy Steel separate accounts were kept though for the purpose of compliance with the provisions of the Companies Act a consolidated balance sheet and profit and loss account were also prepared. There was no substance in the contention that the proviso to section 3 applies only to departments undertaking or branches controlled and managed by persons 630 other than companies. It would be a strange method of construction of language to hold that the establishment referred to in the main part of section 3 will include all different departments undertakings and branches of a company	 while it will not do so in the proviso to the same section. There is no reason for interpreting the proviso to section 3 in this manner simply because in the case of separate departments	 undertakings or branches of the establishment of a company	 it may not be possible to make a deduction @ 8.5% of the paid up equity share capital. [635 C D; 633 G 634 H] (iii) Sub Section (1) of section 16 grants exemption from payment of bonus to establishments newly set up for a period of six years following 	the accounting year in which the goods produced or manufactured are sold for the first time and	 in the alternative; upto the year when the new establishment results in profit	 whichever is earlier. If the Alloy Steel Project was treated as an establishment newly set up for the purposes of section 16(1) the exemption claimed would be fully justified. Section 16(2) of the Act makes it clear that the provisions of sub section (1) are to apply even to new departments	 undertakings	 or branches set up by existing establishment. Consequently	 even if Alloy Steel Project was treated as a new undertaking set up by the existing establishments of Hindustan Steel Ltd. the exemption under section 16(1) would be available to it. [637 D E] The proviso to Sub section (2) of section 16 only comes in the way if bonus is paid in any year to the employees of all the units on the basis of the consolidated accounts. That had never been done in the case of the Hindustan Steel Ltd. Consequently the Alloy Steel Project should have been treated as a separate establishment newly set up in the year 1961. 	 It went into production in 1964 65 and did not earn any profits at all till 1967 68. Therefore no bonus was payable to the workmen of this undertaking for the year 1965 66 in view of the provisions of section 16(1) of the Act. [638 A B]