PETITIONER: K.C. P. EMPLOYEES' ASSOCIATION, MADRAS Vs. RESPONDENT: MANAGEMENT OF K. C. P. LTD., MADRAS DATE OF JUDGMENT24/01/1978 BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. SINGH, JASWANT CITATION: 1978 AIR 474 1978 SCR (2) 608 1978 SCC (2) 42 CITATOR INFO : R 1982 SC 78 (8) ACT: Payment of Bonus Act (Act 21), 1965, s. 3, proviso to--Applicability of. HEADNOTE: Management-respondent is a public limited company carrying on three business adventures viz., manufacture of sugar, of cement and of heavy engineering machinery, at three different places. In respect of the workers of, the engineering unit known as Central Workshops and which was financially ill, the management demurred the payment of bonus under the Act for the years 1964-65 and 1965-66 on the ground that the central workshop was a separate undertaking to which the proviso to Section 3 applied and consequently the claim for bonus on the basis of a single establishment within the meaning of the main s. 3 was untenable. The Labour Tribunal, however, upheld the claim of the workmen for both the years. When the said two awards were challenged by a writ petition, a single Judge of Madras High Court upheld the award for 1964-65. In further appeal by the management, the Division Bench set aside both the awards for 1964-65 and 1965-66 and directed the Tribunal to correct certain errors. Dismissing the appeals by special leave with directions for expediting and completing the lis within three months, the Court HELD : 1. In Industrial law, interpreted and applied in the perspective of Part IV of the Constitution, the benefit of reasonable doubt on law and facts, if there be such doubt, must go to the weaker section, labour. [610 B-C] 2.In the instant case : (a) Proviso to s. 3 is attracted. Separate balance sheet and profit and loss accounts have been prepared and maintained in the past and during the relevant years of accounting also and (b) The High Court is right in directing the Tribunal to re-enquire, rectify the balance sheets and profit and loss accounts for the years in question taking due note of the requirements of the Act. [609 G-H, 610 A] Alloy Steel Project v. The Workmen, [1971] 3 SCR 620 (ratio inapplicable) JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2142-2143
of 1970.
Appeal from the Judgment and Order dated 3-9-1970 of the
Madras High Court in Writ Appeals Nos’ 350/68 and 76 of
1969.
M. K. Ramamurthi, M. P. Dhar and Vineet Kumar for the Appel-
lant.
V. M. Tarkunde and Naunit Lal for Respondent No. 1.
B. P. Singh for Respondent No. 2.
For Respondent No. 3 in CA 2142 and RR 3-6 in C.A. 2143/70
ex-parte.
The Judgment of the Court was delivered by
KRISHNA IYER, J.-Affirming judgments need not speak
elaborately, and so, in these two appeals where we do not
disagree with the High Court, only a brief statement of
reasons is called for.
The subject matter is a bonus dispute between the
management respondent and the workmen union revolving round
the applicability
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of the proviso to Section 3 of the Payment of Bonus Act,
1965 (hereinafter referred to as the Act) for the years
1964-65 and 1965-66. A thumbnail sketch of the facts :
The K. C. P. Limited, a public limited company, carries on
three business adventures, viz., ‘manufacture of sugar, of
cement and of heavy engineering machinery. The concerned
factories are in three different places in South India and
employ workmen on different terms in three different units.
We are directly concerned with the engineering unit known at
the Central Workshops run at Tiruvottiyur, Madras. When the
Payment of Bonus Act, 1965 came into force the workmen of
this unit, which was financially faring ill unlike the other
two sister units, demanded bonus on the footing that the
three different undertakings must be treated as one
composite establishment and on the basis of the overall
profits, bonus must be reckoned as provided in the Act. The
respondent demurred on the ground that the Central workshop
was a separate undertaking to which the proviso to Section 3
applied and consequently the claim for bonus on the basis of
a single establishment was untenably over-ambitious.
Although the concerned unit was perhaps a losing proposition
for the relevant years, (we do not know for certain) the
Tribunal upheld the claim of the workmen for both the years,
but the two awards were challenged, by Writ Petition, in the
High Court. The award relating to 1964-65 was upheld by a
Single Judge of the High Court who took the view that since
all the three units, though divergent and located in
different places, were owned by the same company and,
therefore, without more, were covered by the main part of
Section 3 and the proviso stood repelled. Two other
questions, which had engaged the attention of the Tribunal,
were scantily dealt with, the findings, if one may call them
so, being adverse to the workmen. The management duly
carried an appeal before a Division Bench of that Court
which also called up and heard the Writ Petition against the
award relating to the year 1965-66. Both the awards were
set aside, the holdings on the substantial points being
adverse to the workmen. However, certain follow-up inquiry
had to be done by the Tribunal to correct errors, for which
limited purpose there was a direction by the High Court.
The matter stood at that stage and the two appeals in this
Court are aimed against the decision of the Division Bench
of the High Court.
The first point that appealed to the learned Single Judge,
but failed before the Division Bench, has admittedly no
merit in the light of this Court’s direct ruling on the
point.
The second point urged by Shri M. K. Ramamurthy that the
Central Workshop has had no ‘separate, viable balance-sheet
and profit and loss accounts in respect of’ that
undertaking, and that such is the finding of fact by the
Tribunal, does not appeal to us. Nor is there life in the
third limb of this argument that the respondent has failed
to show that the Workshop has not been treated as part of
the common establishment for the purpose of computation of
bonus. We agree with the appellate judgment that the
proviso is attracted. Separate balancesheet and profit and
loss accounts have been prepared and maintained in the past
and during the relevant years of accounting also, although
610
there is much force in the contention that they have not
been’ properly maintained. Some items which may help
enhance the bonus have, perhaps, been omitted and the High
Court is right in directing the Tribunal to re-enquire,
rectify the balance-sheets and profit and loss accounts for the years in
question taking due note of the requirements
of the Act as mentioned in the judgment of the Division
Bench vis-a-vis Central Workshop. We are in respectful
agreement with the decision in Alloy Steel Project v. The
Workmen(1) but do not regard the ratio of that case as
applicable to the present case on the facts.
In Industrial Law, interpreted and applied in the
perspective of Part IV of the Constitution, the benefit of
reasonable doubt on law and facts, if there be such doubt,
must go to the weaker section, labour. The Tribunal will
dispose of the case making this compassionate approach but
without over-stepping the proved facts, correct the balance-
sheets and profit and loss accounts of the Central Workshop
to the extent justified by the Act and the evidence and
finish the lis within three months of receipt of this order.
The appeals are dismissed. No costs.
S.R.
Appeals dismissed.
(1) [1971] (3) S.C R. 629.
611