LexINDIAN LINK CHAIN MANUFACTURES LTD. versus THEIR WORKMEN
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790 INDIAN LINK CHAIN MANUFACTURES LTD. v. THEIR WORKMEN September 17, 1971 [C. A. VAIDIALINGAM AND P. JAGANMOHAN REDDY, JJ.] "'-, , Payment of _Bonus Act,' 1965, ss. 2(p) rmd 19(2)-'Sett/ement' when Jerminated. Industrial Dispute-'Settlemenl when terminated--Consolidated wages fi.xed ·by Tribunal without linking dearness allowance with living wage and 1vithout granting adjustments-Propriety-Honus-Figures of depreciation and development rebate whether to be taken from income-tax assessment order or balance sheet-For determining return on reserves figures of re- serves at beginning of year should Qe taken ... -Gratuity-Financial capacity -How to be calculated when 1-vage Consolidated without indicating ho1v tnuch relates t-o dearness allowance--Scherhe .wi)ether fair and reason- able. A B c The appellant was registered as a public limited company in or about 1956_and commenced production in·or about 1958. It employed approxi- D matCly 170 persons of whom 156 \Vere daily rated workers-the latter being respondents in the present appeal. In respect of certain demands raised by the workmen in 1962 there were conciliation proceedings in the course of which the parties arrived at an amicable settlement on Ap'lil 5, 1963. Thereby they settled 1"nter a/ia Demand No. 1 relating to wage scales and Demand No. 2 relating to Dearness Allowance. The partieS also agreed to discuss, the existing production bonus scheme and to finalise the same by the end of June 1963. The settlement was signed on E behalf of the parties and by the Conciliation Officer. .However subse- quently there were again disputes between the workmen and the employers and these were referred by the State Government to the Industrial,Tribu- nal on December 27, 1965 under s. lO(A) (d) <If the Industrial Disputes Act, 1947. Both the parties being dissatisfied with the Award of the Tribunal filed appeals by special leave in this Court. The questions that fell for consideration were : (i) \vhether in view of the absence of a notice of termination as contemplated in s. 19(2) of the Act the settlement F dated A. ugust 5, 1963 continued to subsist and consequently ~hether the reference of the dispute to the Tribunal Was incompetent, Q)? whether the tribunal was wrong in fixing consolidated wages without linking dear- ness allowance with cost of living Or granting adjustments in the wage scale; (iii) whether in the matter of determining available surplu.5 the Tribunal was justified in .taking the figures of depreciation allowance and development rebate from the balance sheet and not from the income-tax assessment orders in which the figures were higher; (iv)~ whether for the G purpose of determining the return on reserves tbe figures at the end of .• the year or the beginning o'f the year had to be taken;, (v) whether the· Tribunal was right in its conclusion that the financial position of the com- pany justified the framing of a scheme of gratuity; (vi) whether in vie\~ of the fact that the Tribunal had prescribed a cons.olidated wage withou~ indicating what portion of the wage was the basic wa"ge and what portion the dearness allowance, the payment of gratuity based on an average of the basic wages of an employee exclusive of dearness allowance was im- H possible to implement; (vii) \Vhether the gratuity scheme was incongruous because thOse who retired were given larger benefits than those \vho were retrenched. INDIAN LINK CHAIN LTD. V. WORKMEN (Jaganmohan Reddy, J.) 79I HELD : (i) Reading s. 19 with the definition of 'settlement' in s. 2(p) of the Industrial Disputes Act it would appeal' that a settlement will ensure for the duration of the period for which it has been agreed to between the parties and if no period is agreed upon, for a period of six months from the date on which the memorandum of settlement of dispute is signed by the parties and where it is put an end to by a notice in \Vriting it will continue to be operative until the expiry of two months from the date of which the notice is given. It would appear that even where an agreement is for a fixed period it will not continue to be binding for the duratien of the period of settlement hut thereafter also until it is terminated by a notice in writing and even then it will continue for a period of two months from the date of such notice. While no doubt it is true that a notice must be in writing, such a notice can be inferred from co
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