LexJARDINE HENDERSON LTD. versus THE WORKMEN AND ANOTHER
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1962 Jlorch 5, ' 582 SUPREME COURT REPORTS [I 962] SUPP. .JARDINE HENDERSON LTD. ?!. THE WORKMEN AND ANOTHEii (P. B. GA.JENl)J\AGADKAR, A. K. SARKAR, and K. N. 'VAN CHOO, ,J,J.) lnduJtrial Dispute-Bon u•-A vaila/ile Surpl u.•-Determi· natio!'.of-C/0.<ing Bonus- Implied tum uf agreement or ctnidtt1on of seri-1r:e-Custo1nary bonu..•L ~fhe appellant is a company carr} ing on business in Calcutta an<l ha<l bcP.n paying a bonus callc<l closing bonus to its v.·orkmcn at the. rate of one month's pay from 1948 to 1957, but as the profits of the appellant considerably fell in 1958, the quantun1 of closing bonus was reduced to half a month's pay; consequently, a reference \Vas made to the tribu- nal for dccision 1 \\'hcthcr the management ,,·as jui;tified in reducing the qaantum of closing bonus to half a month's pay in 1958. The workmen claimed that closing bon,.s had been paid at a uniforrn rate from 1918 to 1957 an<l had beco1nc an implied condition of service between the workmen and appel- lant: in the alternative, the claim was that the payment ha<l acquire.cl the character of customary honus aud \Vas not depen- dent upon profits earned. by the appelLmt. The tribunal held, that the payment of closing bonus had not become an implied condition of service and also held, that the bonus cou1cl not be hclc..I to be a cu~tomary bonus. It held that there "·as s11fficient available surplus to \varrant payment of one month's pay as profits bonus and ordered thas half a n1onth's bac:ic salary, be further paid as profit bonus to the \\·ork1nen for the year in disputr. Held, that the fact that a company declares dividend ~·t morr. or less than six percentum is no reason for changing the rate of interest allr)\\•e<l under the Full Bench formula on paid-up capital. . field, further that custornary Uonus is ahvays connected v.•ith some festival. As closing bonus is not r.onnectcd with anv festival it cannot he trt":ated as customary bonus of the ki~d dealt \Vith the Graham's case. Graham Tra./ing Co. J,td. v. lts workmen, (l!IGO) IS .. C. 11. 107, R. }.T. F,lia .. and Co. Ltd. Emplnytr.'s lJnio1i v. IJ. iV. J~"lia.ll and Co. Limited. ( 1%0) 3 S. C. R. 382 and As.<ix:iated Cement Com7vmies Lt<l· v. It.• Irorkmw, (1959) S. C.R. 925, refer- red to. In tbe present case during the whole of the period from 1948 to 1957 when closing bonus was paid there was no loss .,. 3 S.C.R. SUPREME COURT REPORTS 583 incurred by the appellant. Further the bonus was paid only after the trading results of the year were known. Ii eld, that taking all circumstances into account it appears that closing bonus had been paid on the basis of the trading results of the previous year and depended upon the profits earned in the previous year, and it could not be held, that one month's pay as closing bonus was payable as an implied con- dition of se.rvice irrespective of profit made by the appellant. M/B. lsphani Ltd. Ciflcutta] v. 18phani Employees Union (1960) I S. C. R. 24, referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 359 of 1961. Appeal by special leave from the award dated April 18, 1960, of the Third Industrial, Tribunal \Vest Bengal, in case No. VIII-153 of 1959. B. Sen, Sukumar Ghose and B. N. Ghosh, for the appellant. · D. N. Mukhe1;jee, for the respondent No.I. 1962. March 5. The Judgment of the court was delivered by WANCHOO, J:-This appeal by special leave arises out of a question of bonus referred by the Government of West Bengal to the Third Industrial Tribunal. The appellant is a company carrying on business in Calcutta and the dispute relates to closing bonus for the year 1958. It appears that the appellant had beon paying a bonus which was called closing bonus. to its workmen at the rate of one month's pay from 1948 to 1957. In 1958, how- ever, as the profits. of the appellant fell consider- ably, the quantum of closing bonus was reduced to half a month's p<J.y. In consequence a dispute was raised by the respondents workmen represented by two unions and their claim was that they should have been paid one month's bonus as usual. Consequent- ly reference was made to the tribunal and the ques- tion for decision was whether the management was 1962 Jardin• HmtUrson Ltd. v. The Workmen Wanchoo J, 1962 .!~Jint 'Htndtrso11 Ltd. v. The W1trknun Wanclioo J. 584 SUPREME COURT REPORTS [1962) SUPP. justified in reducing the quantum of closing bonus
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